Stats reveal economic woes

| 16/11/2009

(CNS):  Everything from work permits to house sales suffered a serious decline in the Cayman Islands during the first half of 2009 according to the Economic and Statistics Office. The Semi Annual Report released on Friday reveals just how badly the global economic crisis affected the local economy from January to June this year. New company registrationfell by 46.2%, imports declined by 13%, the total value of property transfers slumped by 43.3%, bank and trust company registrations fell by 3.9% and mutual funds licenses dropped by 2.1%. Tourism was also in the doldrums with air arrivals falling by 13.3%, while cruise passengers decreased by 6.1%.

Stock exchange listings contracted by 16.1% and stock market capitalization for specialist debt also fell. Total value of building permits plummeted by 17.0% to $175.6 million. Many of the government’s revenue generating areas were severely affected including work permits which fell by 7.6%, largely on account of declines in construction, financial services and tourism related services, the ESO said. The total value of work permits plummeted by 17%, the highest reduction in terms of value was in managerial and administrative permits but the highest number of permits lost were in the construction industry.

One area of increase was credit to the private sector from the commercial banks, which grew by 21.7% as Cayman’s local businesses became more indebted and as the cost of borrowing declined. The fear of recession, however, made some people put away cash. While there was a reduction in non-resident bank deposits, the banking sector’s total assets grew by 14.7% as the net domestic assets expanded with Caymanians clearly keen to hold on to what they could as they saw fiscal storm clouds gathering.

Overall, the ESO said it now expects that Cayman’s economic outlook for 2009 is a contraction of almost 6%. “The overall growth for 2009 is now projected at -5.8% as recessionary conditions in source markets impact the domestic economy,” the ESO report revealed.

One of the most notable impacts the worldwide economic crisis had on the Cayman economy was the decline in the number of new company registrations, which fell by a record 46.2% compared to this time last year. “The fall was spread across all types of registration which may be associated with the unprecedented shrinking of business activity among the advanced economies,” the report stated.

The statistics reveal just how hard hit government revenue was by the economic crisis in a relatively short and sudden period of time. The report reveals that, as government expenditure grew by 10.4% its total revenue contracted by 13.7%. This also confirms that during the period the government had asked the civil service to cut expenditure by 6%, public sector spending was increasing by more than 10% Personnel costs in the civil service expanded to $123.4 million, more than 8.3% compared to a year ago, despite a 3.8% reduction in the number of personnel in the civil service to 3,756 as at end of June 2009.

To make matters worse, despite the recessionary indicators, while the overall consumer price index fell by 0.3% food prices still increased. The average price of food items went up by 5% as all food categories, except dairy products and fats increased in price. The highest increases were recorded for fruits and vegetables (16.2%), sugar products (8.4%) and bread and cereal (7.4%). Household equipment, personal goods and services, education and medical services all went up.

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  1. Anonymous says:

    There is more to it than meets your eye. The author (like their country) is hurting. There are many reasons for it – but we all would be better served by trying to read between the lines and understanding, then taking the easy route and telling the author to shut up.


    For example – are you saying it is OK for Social services to hand out cheques to persons driving $40K cars – because the author thinks it should stop – and I think they may have a point.

    • Anonymous says:

      I think the person was referring to the open threats against McKeeva and his wife and the general message of hate espoused in the e-mail.

      Should we also listen to groups like the KKK and Hezbollah?  I am sure their members are hurting and represent a segment of their societies as well.

      • Anonymous says:

        Actually, KKK members are almost certainly not hurting from anything but in-breeding – they are racist pigs and cannot be reasoned with. Hezbollah are largely bastard terrorists BUT derive their membership and support from real or perceived injustices upon them. I would never reason with the KKK,  but Hezbollah might be worth sitting down with (at least once) before I write them off forever and bomb their villages. They might tell me about Druze (Christian) militia machine – gunning  their innocent mothers, wives, and children in refugee camps, into which they had been initially forced by some zionists using a 3,000 year and badly translated old book as some kind of registered land system.I might then at least understand that in the same position, I might "go postal" and see if I can persuade them that the Gandi/Mandella way of dealing with their issues would be better.

        Oh, and if you are a disabled Caymanian that needs and are told that Social Services cannot help you because of a funding crunch, struggle to survive off a single rental unit left to you, and receive payments from your Mercedes driving foreign national tenant by way of social services check, do you think your rhetoric may become a little "vile", although I accept, not enough to threaten to harm anyone.


  2. Annoymous says:

    You know this report speaks nothing new, as if we are living in 1932 Cayman, beating mosquitos and walking around with a fire pan.  This is a world wide recession, and what that means is EVERYONE & EVERYWHERE is affected by it, so to sensationalize something that is occurring in every corner of the globle and make it read as if because we are not approving more work permits, and PR’s we are heading for an economic burn-up on the return!!! RUBBISH I tell ya, it is ALL F_&*King rubbish and simply another way to deploy more ammunition against the ‘Caymanian Way of Life’.

    For the PRemier to claim that he has opened the doors to this country for everyone to come and bring their wife, kids, dog, cat, goat etc…I wonder if he has ever once stopped and realized that him ONE CANNOT OPEN THAT DOOR ALONE!!!! It takes every Caymanian to do it (even the ones who oppose you)……. Including the unborn ones!!! 

    So leave us the hell alone, and let us get by how we have always done.  I say close down Social Services for anyone under 60yrs of age.  No more subsidizing families who show up with a social services cheque to rent my apartment in mercedes benz’s!!!!! THat is a crying shame, and they were Caymanian with their little Immigration Letters to prove it.

    In 6 months this Govt. has done nothing but put a FOR SALE SIGN up and SELLING us off like traders on a stock market floor!!  

    Well here this Mr.  & Ms. Premier, you all better stop before you put both feet in your mouth.  & one last thing why in God’s green earth do we have to protect unna??? Who are we protecting you from……must be yourselves, because no one wanted to harm you all before, who is going to harm you all now unless you are up to stuff that will SET THE PEOPLE OFF!!

     I hate that I am a born Caymanian, because the ruling Govt. makes me hate my own nationality, and that is a shame, and makes me shameful of them.


    • For Rant says:

      I woudn’t rent from you.  I couldn’t afford your damage you deposit.  Why don’t you be quiet.  X%f!F  oops that was the code

    • Anonymous says:

      This is just vile and I hope that no one justifies it with a response. 

      CNS shouldn’t even allow this type of post full of hatred and threats.

      • Anonymous says:

        Another Dictator, wanting to tell people how they shoulf feel. Well this Government is truly making REAL Caymanians ashamed to admit to being Caymanian as Cayman does not belong to US (True Caymanians) anymore. OH by the way, tell McKeeva it don’t belong to him either as Cayman belongs to all the people he sold-out his birthright to!

  3. Anonymous says:

    The key to increasing tourism is to drop prices.

    I noted very few people in condos on SMB last January.

    I note that prices have not changed very much this January for those same condos.

    If price doesn’t match the realities of supply and demand (I.e. high supply and low demand), then business does not happen at all.

    This is anecdotal, and not supported by any data other than my subjective walk down SMB.

    However, I think I am correct.


    • Peter Milburn says:

      Interesting thoughts and I agree with them.I also think that our airline prices are way off as well and we need to get away from the "traditional"we can put up the prices mentality just because its getting colder up north.We need to get away from that way of thinking and and try a new approach.Cheaper flights including taxes will fill the planes.Once the people are here they will spend money,BUT the condos etc.must also take part in this or it will not work.Filling the planes at half the price is better in the long run and lower costs of staying on island will certainly be better than no guests or at least not as many.I just had some folks cancel their planned trip to the island because of  rise in airfare and condos that were also raising their prices.Lets at least try as nothing tried is nothing gained.Isnt it better to have a bird in hand rather than two in the bush as the saying goes.If CAL drops their prices the other airlines will follow suit as they have done through most of the other Caribbean islands.

  4. whodatis says:

    Yesterday (Sunday) afternoon I went out to the fish-fry in Bodden Town next to the Texaco gas station.

    I happened across some tourists who I noticed almost crashed their car as they veered off the main road to stop in and indulge a bit.

    They were having a blast – said they were here since Wednesday and this was the first time they were surrounded by so many Caymanians!

    They were staying on SMB and though they said their hotel was lovely, they also remarked on how there appeared to be such a lack of locals in their Caymanian experience thus far.

    I of course took the time to break down the current situation to them, and the conversation moved on to suggesting things to do, places to eat and answering many other questions.

    By the end we had a very enlightening conversation – and I guess this was simply because we created a situation where tourists (visitors) and a true, born and bred local had the opportunity to truly connect with each other.

    People, we are Caymanian – contrary to what the powers that be may try to portray, WE are a VITAL part of our tourism industry and we are NOT living up to our full potential nor truly realising our untapped wealth.

    Look around, what do you see? Lots of expats buying old or Ivan-damaged / destroyed properties (coastal and inland), fixing them up and renting them out as Caymanian catered Bed & Breakfast type of accommodations – this is the BEST way to truly experience a new country as a tourist or visitor. That was just one example of how we as Caymanians can do more to boost our country.

    There is so much more than can be done – we as a people are really underminding ourselves when we place the destiny of our country’s future solely ni the hands of multi-millionaire hotel developers!

    Look at the few cultural hot-spots that do exist during the middle of the day – tourists are flocking there in droves (Think folks – do we not stop off at the jerk-stands in Jamaica to sample some real Jamaican cuisine?!) – there is a lot more than can be done guys – believe you me, there is life in "brand Cayman" yet – and that "life" is you and I!

    Watch this space …

    • Cultural hot-spots says:

      Can you really describe a demonstration of rope moking as a "hot-spot"?

      • Anonymous says:

        Call it what you will, that sort of experience is why tourists travel to other countries.  I had guests recently and our "tour" consisted of stopping at Buddy’s in BT for some delicious tarts and jams (highly recommended), stopping to talk to Miss Nell and to buy a thatched basket from her, lunch at Miss Vivene’s in East End, an afternoon relaxing at Rum Point, then back to town and some of the world’s best Chef John’s ribs and chicken for supper.  I don’t know if any of those qualifies as a "hot spot" but it was a darn fine trip for me as well as my guests. 

  5. Anonymous says:

    So, at a time when the economy was experiencing all these woes, the PPM and its band of merry men were lying to the Caymanian people about "progress" and "operational deficits" that would convert at year end into a surplus.

    Shame on you Kurt.

    • Anonymous says:

      Kurt & the PPM had to deal with cleaning up the udp mess, the after effects of Ivan, $20 million per year to udp’s turtle farm to keep it in operation, more destruction caused by a few terrible hurricanes, & to top it all off they had to contend with one of the worst recessions ever! I think the PPM did very well considering! Thank GOD for the PPM! Now, after 6 months at the helm, the udp has done nothing, things are worse, times are tougher, the udp continues to waste money as always, they continue to help the rich foreigners, & they continue to travel! "So, at a time when the economy is experiencing all these woes" the udp and it’s band of yes boys continue to lie to the Caymanian people about "progress" and "operational deficits"!!! When will it all end? The blame game is a very easy one, but how long can the udp & their lackies continue to try & fool the people by blaming the previous administration? It cannot go on forever! The honeymoon is over, & the udp is causing more havoc & pain than the PPM ever did! Life in Cayman is tougher than ever now, & all we can hear out of the udp is "blame the PPM"!


  6. True says:

    It may also mean more Caymaninas are taking over the jobs of the permit holders

  7. Anonymous says:

    Thank God for "The Nationalists and Protections (aka "mediocre mafia" and the "squeaky wheels") and their frontman, Ezzard Miller".  Yes, thank God we have them, otherwise persons like yourself would have full reign in this our country! We need more Ezzard Millers out there to stand up for Caymanians rights, particularly in the work force.  It is a shame how Caymanians are being treated and taken advantage of, which treatment many endure every day.

    Of course your suggested "discount rebate" would suit very well and allow the overused excuse of not being able to find "suitable" Caymanians to continue to be used. If "suitable" Caymanians cannot be found then penalties to the company would fall away and business would continue as usual wouldn’t it?  As always, you people try to be so clever and blatantly try to treat us all as fools.

  8. Anonymous says:

    The decline in work permits in professional /skilled positions does not mean that the numbers in those positions have decreased (or at least by not nearly as much as indivcated). Every time a professional applies for PR, is Working by Operation of Law, marries a Caymanian, or obtains Status, they stop holding a Work Permit. The ESO may or may not be taking this into account – but those who interpret these figures to say there has been an equal  contraction in the numbers of people working in financial services, are mistaken.   

    • Anonymous says:

      Thanks to the person who commented Mon, 11/16/2009 – 07:57. I am glad that you pointed out some of the reasons for the decline in the professional categories of work permits. "Every time a professional applies for PR, is Working by Operation of Law, marries a Caymanian, or obtains Status, they stop holding a Work Permit." The ESO needs to give full statistics on the increase in those categories as well so that an accurate picture can be arrived had statistically.

      • Anonymous says:

        This is true.  One also has to take into account that work permit holders are now being replaced by abled Caymanians.

        • Boom boom says:

          LOL! Tell us another one!

          • O'Really says:

            Well it’s about as likely as a significant part of the professional work permit reduction being due to changes in category, rather than jobs lost. 

  9. Harry says:

    Cut the civil service.

  10. Anonymous says:

    Will people once and for all stop about how badly the economic crisis is affecting Cayman.  The problem with Cayman is the 50% increase in Civil Servants over the past 5 years.  That increase has added $200 million dollars to government’s annual recurrent expenses, exactly the deficit ($700 million expenditure vs $500 million income).

    Likewise, I can’t help but notice, it seems there must be somewhere in the range of a 50-100% increase in the number of government vehicles over the last 5 years too.

    The real crunch comes in June 2010 when the next budget shows also a $200 million deficit and the country is maxed out in borrowings.



    • Anonymous says:

      "50% increase in the civil service in the last five years".

      What utter nonsense. You need to think, or do some basic math (or do PROPER research) before making such silly statements.

      • Anonymous says:

        OK, so do you have actual figures and sources for them, or are you just shooting off your mouth?

        • Anonymous says:

          Yes Ihave figures-you can get them from the Portfolio of the Civil Service like I did. The figures are as they say in the public domain.

          • Anonymous says:

            Thanks for that. So the increase from 2003 to 2008 was 23.7%

            I did not see numbers for the period after July 2008, so what happened in the last 15 months is unknown.

            • Anonymous says:

              According to the Chief Officer of that Portfolio in Finance Cttee recently, there has been a decline but I don’t know by what.

              By the way, my reaction to ?your? first post was to the % given. I think we are in agreement that the civil service is too big and with the Police Commissioner recently saying he wants 55 more officers, it will of course get bigger!!

              And of course the officers will need cars………………………..

              • Anonymous says:

                That first post wasn’t mine, but it appears we are in agreement anyway. 

                In my view, government needs to maintain the "core" services that a government provides (health, law and order, and education), but everything else that is optional needs to be cut right down.  The potholes in front of my house are not getting filled, and I hope that is because they are saving the cost of the fill!  Leave me with my potholes but keep the police on the streets.  I know I saw them a while ago… please bring them back!

  11. Anonymous says:

    Time to reach a consensus.

    Caymanians, and only Caymanians, must come to grips with the new global environment and make a decision as a community over the next year or two in regards to the future development of the island.

    It is either time to open up to the world in terms of economic development and immigration (let’s call it this the "Singapore" option) or it is time to rescale the economy to a smaller model dominated by Caymanians with just a handful of foreign workers (let’s call this the "BVI" option").

    Either choice is a valid one – but remember that decisions have consequences.  If the BVI model is chosen:

    – Cayman has been built for growth, contraction of the economy and population will have severe negative consequences for the local economy (such as real estate, constuction, retail, and gov’t revenue).

    – Caymanians enjoy one of the highest standards of living in the world, if not the top 10 then definitely the top 15 or so.  This would be a thing of the past as economic growth would dry up anda downward spiral would begin.

    – Crime and other social problems would become worse, this has happened in every single country that has been through along-term economic decline.

    On the other hand by going to the Singapore model, foreigners will dominate the island from a statistical and economic standpoint.  This will increase the frustration and disenfranshisement within Caymanian society as the "have nots" will fall even further behind the "haves".


    This is not an easy choice and should be taken very seriously. 

    However, the past environment, where island prospers and grows despite immigration being limited and foreign investment being rejected, died during the current recession and will likely not come back even if the global economy turns around.

    • Anonymous says:

      What we need to do is develop our own "Caymanian model" and return to the balance put in place by our forefathers and former politicians who had wisdom and foresight. We have to stop comparing ourselves with other countries and use our own intelligence to address the real needs of this country and get past the blinders of greed.

      • Anonymous says:

        Sounds good, but all I can say is that with a population of 30,000 people – good luck!

        Those days are gone.  Don’t forget that Cayman has essentially zero in th way of natural resources and relies 100% on foreign investment for economic growth.

        More than likely, this "Caymanian model" will lead you the way of Jamaica, or possibly worse.

    • Fickleburry Hunn says:

      The downward spiral has begun and it is accelerating.

  12. Anonymous says:

    so work permit revenue down and yet despite there being no suitable caymanian (yes officially according to the DER) and my work permit costing over 14 grand a year they still can’t get round to processing it even though they have had it for 4 months.  Disgraceful.  And Mac wants businesses to come to cayman – well I say this – don’t come it because unless it doesn’t need any work permits (unlikely)  it will be a nightmare of red tape, civil service inefficiency and cronyism (if that’s how you spell that word)

    • Anonymous says:

      The new financial services sub-board will streamline applications for the financial services industry.  So the 4 month thing should not be happening going forward.

      Before the mediocre mafia jumps all over me, that does NOT mean automatic approval – just a quicker decision making process.  It can still be rejected, but companies will know within a few days rather than a few months.

    • Anonymous says:

      I am also advised that PR/Key Employee applications for important and qualified people are being turned down at a very high rate, Mac’s verbiage notwithstanding. 

      Looks like national economic suicide by red tape, and the failure of the Board to "get with the program".  I would never do business in the Cayman Islands.

      • Anonymous says:

        If this is true (and not just rumor – which is more likely) than this place is going down and its time to pull out any business interests.

        But I don’t believe it.

  13. Anonymous says:

    The Nationalists and Protections (aka "mediocre mafia" and the "squeaky wheels") and their frontman, Ezzard Miller, will call the CNS figures noted above "scaremongering".

    Most (and possible none) of these people have ever put their own capital at stake to start a business or been responsible for running a business on behalf of shareholders.  I invite Caymanian business owners to post on this string to let me know their thoughts on the protectionist vs. growth debate.

    This is a crisis and if Cayman does not act NOW (it should have been three years ago) to make itself more attractive to foreign capital and increased growth (including population growth), than we can expect the global crisis to turn into a downward spiral for the Cayman economy.  Look at Iceland in late 2008 as a model for how a financial and tourism-based economy can get into trouble and implode during a time of global crisis.

    McKeeva, whatever his checkered history and lack of refinement, "gets it" and his trying like heck to reverse the decline.  He has been in speaking to the large fund admin shops remaining on the island like Citco, UBS, Fortis and Admiral to see what can be done to stop the exodus from Cayman.  And also to actually bring in new industries like fund managers and medical tourism.

    According to the people Mac has spoken with, the two main culprits of job loss are the high cost of doing business on th island and immigration policy (which ties back to the issue of cost).

    I doubt that anything can bring back the lost jobs from places like Goldman, Citigroup, Butterfield and Maples Finance, but we can at least learn for the lessons.  There is a still future job growth (it will happen at some point) in the funds industry, so perhaps some of that will come to Cayman if the government is able to put the right package together.

    My suggestion would be to give companies a discount or rebate on work permit fees based on the number of Caymanians they hire.  Example:

    – If they hire 25 Caymanians – they get a 10% discount on work permit fees.

    – If they hire 50 Caymanians – they get a 25% discount.

    – 75 Caymanians – they get a 50% discount

    – 100 Caymanians – they get a 67% discount

    The numbers are off the top of my head and can easily be changed, but I would love to see government take a look at the concept.

    • Anonymous says:

      Great idea, but instead of the number of employees, how about the percentage of total payroll paid to Caymanians. I could see your suggestion being exploited easily  by hiring the correct number of Caymanian "errand boys" to allow the discount to apply if it is simply based on raw numbers.

      • Anonymous says:

        That’s not a bad idea – but it would be difficult to enforce as an auditor would have to go through the payroll records each month to ensure compliance.

        And I wouldn’t want to make it too complicated – it wouldn’t be the worst thing to have extra "admin assistant" and "errand" type positions as it would give job opportunities to the low-skilled workers that make up the majority of unemployed Caymanians.

        Perhaps it could be modified so that you have a mix of professional and low-skill jobs.

        • Anonymous says:

          Ok – we all agree it’s a great idea – the details can be worked out and computers can spit out the stats – so why not do it?


          Because at the end of the day the Government refuses to adapt and think outside the box or like a business.

    • Anonymous says:

      You need to distinguish between the "Nationalists", the "Protectionists", and Mediocre Mafia" (although this is a silly name you have given this group).  They are NOT the same people and don’t have the same views/goals.

      – The Nationalists are the people that truly would like to see all of the foreigners kicked off the island – these are the same people that you can find in any country around the world.  They are generally quite religious and feel threatened by change or people that look/act/ or talk differently than they do.

      These people don’t care about the consequences of their views and perhaps even prefer to see an economic collapse on the island.  They are the ones that threaten social uprisings, etc…  You cannot reason with them or objectively explain the merits/demerits of their ideas – they will not believe anything you say and wouldn’t care even if they did.

      Luckily, this is a fairly small group although they talk alot.


      – Protectionists and Mediocre Mafia generally want a good economy and don’t mind having some foreigners here in Cayman, but they want the job titiles and salaries for themselves.

      You will get a lot of disagreement on details, but these are people you can generally work with from the standpoint that they at least want the island to be prosperous.

      MM and Protectionists will always frame the debate as "ex-pats vs. Caymanians" because it makes them feel better, but the truth is that it is really a debate between the haves and the have-nots (or at least "have not as much as they want").  The fact is that there are a LOT of successful Caymanians.  Go to any of the most expensive neighborhoods on the island and half or more of the homeowners are native Caymanians.

      • Anonymous says:

        I am, a nationalist but I do not want to see all foreigners kicked off but I would appreciate if foreigners will learn to accept that Caymanians can achieve as well any one else.They (the foreigners) are being ethnocentric when they disparage Caymanians. I know and realize that Caymanians had to go abroad to make a living but they tried to assimilate and did not disparage their hosts.

        Just consider Cayman Brac, a small island of less than two thousand people, and to have produced a family such as the Kirkconnells plus an individual like Mr Linton Tibbetts as well.

        I wonder if any town of that population size in Britain or Canada has produced as much entrepreneurial talent per capita