LoGB Speech

The Leader of Government Business,the Hon. McKeeva Bush, recently spoke to the locally organised BUSINESS OUTLOOK FORUM on post-Ivan recovery. Last week, Spirit carried excerpts from that speech and promised more details this week on aspects of recovery of tourism and finance, with a focus on strategies to refresh and revitalise aspects of our products. Below, Mr. Bush outlines his perspectives and plans in this reconstruction period, as Cayman recovers from its worst natural disaster in known history:

Tourism

“Tourism is our most important economic sector. It contributes over 50% of GDP and supports over a quarter of our workforce - providing around 7,000 jobs. Our last full year, 2003-4, was strong … exceed[ing] our performance of the previous year. Tourists spend over $600 million a year in Cayman.

Our offering is sophisticated and well developed. Our ambition continues to be to develop a thriving and sustainable tourism sector that provides a distinct, high-quality experience. We have a very appealing island: safe and secure, with friendly people, excellent services and a beautiful environment. This gives us an exclusive image, and an affluent and loyal market….

I believe there is a good air of optimism in the sector, and activity is picking up. This season will see our recovery effort swing into full force. We will come back better and stronger. We will need to demolish, rebuild and raise standards.

I look forward to the opening of the Ritz Carlton on Seven Mile Beach. We cautiously anticipate a very strong 2005-6 season, with new products, services, a higher quality offer and a renewed confidence.

There are also significant medium-term initiatives, including:

Delivering high quality new and replacement facilities.
A sophisticated marketing plan, which will focus on niche markets, for example, the conference market.
The exploitation of our local distinctiveness … and the diversification of our offering.
The drafting of tourism development plans for the Sister Islands, including appropriate incentives to promote eco-tourism projects.
The development of new offerings, building on diving and ‘adventure holidays’, including exploring cultural and heritage opportunities as well as walking and cycling trails.
Improved facilities at Owen Roberts and the cruise terminal in George Town.

Financial Services

The next pillar of our economy is the international financial sector.

The performance of the sector during and after Ivan was exceptional. The industry did not miss a beat … effective continuity plans saw [our] firms temporarily operating from other jurisdictions, while retaining senior-level staff on-island.

I believe that operational costs since Ivan may have increased at the margins, but the sector continues to perform strongly, and I will be looking to ensure that these costs are offset by service improvement and a better flow of information to the business sector, and will, in any event, prove transitory.

Let me take a moment to explain why I think we shall remain a major global player in this sector, and continue to punch above our weight on the world stage.

Our industry is sophisticated and innovative. It remains so because we attract the best and brightest people from around the world.

Listen to these three examples.

First, we have over 40 of the world’s 50 top banks. Over the past four years, bank deposits and inter-bank bookings have increased from $630 billion to over one trillion dollars.

Second, we have almost half of the total world mutual and hedge fund market: almost 6,000 funds are supervised in Cayman.

Third, we remain the domicile of choice for captive insurance, with over US$22 billion in assets.

The reason we have thrived as an international financial centre is a consequence of Government, regulators and the private sector working closely together — to balance sound regulation and flexibility.

We will continue this approach of modern and evolving legislation, rigorous law enforcement and international co-operation … [and] I am confident we will remain a leader in the global financial community.

Inward Investment

Having spoken about tourism and financial services, I want to say a few words about another policy initiative I consider to be important … diversifying our economy.

In 2003 I launched the Investment Bureau … [Its] aim is to help drive economic growth, deliver diversification, create jobs and ease access to foreign markets.

The Bureau aims to provide a ‘one-stop shop,’ assisting potential investors by pulling together all the necessary contacts, resources and bureaucratic channels to simplify and accelerate the investment approval process. It will help business cut through ‘red tape’ — and roll out the ‘red carpet’ to investors in our Islands.

As part of our ambition to diversify we will develop a vibrant and knowledge — based economy. We shall aim to encourage e-business and other technology-related companies to operate from within the Cayman Islands. The Investment Bureau will be the key facilitator in the investment process, assisting in marketing and attracting investment, but also in retaining it. I want it to constantly challenge Government and the private sector to ensure we remain highly efficient, business-friendly and always one step ahead of our competitors.

In March I shall be leading a group of civil servants and private sector partners to Hong Kong to formally launch the Bureau’s office there.…I shall also be visiting the Emirates, an emerging, and increasingly important, financial centre … to meet with senior government, regulatory and business figures to brief them on the Cayman Islands and to explore synergies. Such co-operation could include, but not be limited to, opportunities for transshipment and oil refining. My Government has always undertaken to support sustainable development, and in this regard we are concerned about Cayman’s dependence on very expensive fuel sources. This would obviously have to be explored with due regard to environmental protection and other concerns.”