Rollover reprieve receives tepid response
(CNS): The temporary suspension of the controversial seven year term limit for foreign workers, known locally as ‘rollover’, has received a cautious welcome by the financial services industry but the sector is still looking for more far-reaching steps by the government to ensure economic growth. The former outspoken chair of Cayman Finance, Anthony Travers, who has railed against the policy for some time, said it was a step in the right direction, but given the substantial damage he believes it has caused, there has to be much more than a temporary halt to address the problems of uncertainty in the minds of the professionals who come to work in the jurisdiction.
“The announcement that the rollover is to be suspended is certainly a step in the right direction but it would be premature at this stage to come to any conclusion about the effect of the suspension given that the study has not yet been undertaken,” Travers said last week in wake of the news. He added that the move makes certain points clear, in that there must now be some recognition at the political level of the substantial damage done both to the local economy and the financial services industry by the imposition of the rollover policy.
“Suspension of the rollover of itself without more will do nothing to redress the uncertainty as to the tenure in the minds of the sort of financial professionals that the Cayman Islands must now attract,” he noted, pointing out that very clear new legislative procedures will be required before confidence in Cayman can be re-established.
Travers believes there is widespread ignorance of the importance of this issue to the overall economy of the Cayman Islands, to job opportunities for Caymanians, to government and private sector revenues and to the future development of a financial services industry, which, he said, has been seriously impaired by the current policy.
He hoped that these issues would be dealt with by those charged with the responsibility of undertaking the review but says, given the entrenched nature of the misconceptions, it would be prudent to defer for the time being any overly optimistic assessment as to a positive outcome. “Better late than never and hopefully not too late,” he stated.
Butterfield Managing Director Conor O’Dea believes the rollover suspension news is positive, but stated that the longterm solution is more important.
“Some individuals and businesses will benefit over the next two years I assume, depending on how the suspension is implemented, but we need long term certainty for all businesses operating in the Cayman economy so they can plan the long term future resourcing for their business. I view the rollover suspension as a short-term 'economic stimulant' which can only help all Caymanians and expatriates alike ultimately,” he said.
CEO of recruitment firm CML, Steve McIntosh, says suspending the rollover is obviously going to make a lot of people that would otherwise have been forced to leave very happy.
“Many employers will also be very happy to be keeping a staff-member they were already looking to replace,” he added, but said the move is far from a panacea that will restore the island to economic growth.
“Rollover was unpopular because it caused employers to lose good people and boosted competing jurisdictions that benefited from an exodus of experienced professionals. That damage cannot be undone,” he stated, noting that in recent years the policy scarcely had any operational impact on most financial services firms, as senior employees were exempted and junior employees easily replaced.
Some in the financial services sector are more upbeat, however. Don Seymour, Managing Director with dms Management Ltd, says the rollover policy had been poorly implemented and the results had been disastrous for the Cayman Islands economy.
“This is a sound decision that will be enthusiastically welcomed by employers and employees alike. It should give businesses more confidence and help create jobs. Policies that penalise employers ultimately fail – you can’t distinguish between the two – what is good for the employer is good for the employee,” Seymour told CNS.
Chamber of Commerce President James O’Neill says that the organisation had expressed concern about the term limit and work permit policies for some time and that immigration reform is among the many action items in the Chamber’s ‘Future of Cayman’ strategic report. “Any sensible proposal that can help to stimulate the economy should be considered at this time,” he said.
The chamber is one of a number of bodies that the premier said would be involved in the review of the policy when he announced the two year suspension of the policy in the Legislative Assembly last week. Also included in the review will be the body which represents the country’s offshore industry. Richard Coles, the current chair of Cayman Finance, said the intention sounded reasonable and it made “good economic sense” to allow those who were facing rollover to apply for another permit in the mean time.
Coles added that while there are firms in the financial services industry who believe that the policy has increased the cost of recruitment and training, among other issues, the idea of assessing the impact first is the right approach.
“This will allow the government to objectively assess how the policy would be amended or whether it should indeed be removed,” he added.
Although there are many who would disagree, and complain of a glass ceiling in the sector for local professionals, the chair said the financial services industry was “extremely supportive of the recruitment and training of Caymanians”, which he said was reflected in the number of Caymanians in senior positions. “Improvements can and should always be made, but I feel that there are many firms in the industry that can be considered role models in that regard,” added Coles.
McKeeva Bush made the surprise announcement in the Legislative Assembly Thursday evening that he would be recommending a temporary suspension of the rollover to Cabinet on Tuesday, which would begin as soon as an amendment could be made to the current immigration law. He said a review would then commence, lasting six months, to find out what impact rollover has had and what could replace the policy, which will allow government to balance the needs of the business community with the sensitivities of the local people and in particular the voting population.
Category: Finance
Whilst I don't think the rollover policy is the sole cause of our economic problems, I really do not think it helped either. We have had something like 6,000 people leave our shores since the economic crisis began. Many of those would undoubtedly be due to the weak global economy, and is a reminder that one cannot consider Cayman in isolation to the rest of the world. However, there are also a number of those 6,000 who were forced to leave because of rollover. In a weak economy we need all the help we can get, and the rollover policy did not help. Lets consider the effects of one person being rolled over. Lets assume they are professionally qualified, middle management in a financial institution. They may be responsible for bringing in some new business to their company. The expat might have a car, a boat, perhaps own some land, or even a house. The expat does not send money home, but generally shops locally for groceries, household needs, pays for internet, electricity, phone service, puts their kids in fee-paying school etc. etc. ALL of this economic activity either directly, or indirectly, puts $$ back into the Cayman economy, and undoubtedly results in the employment of Caymanians, again either directly or indirectly. Imagine the effect on our economy if say 2,000 people in this position left the island due to rollover. Imagine how it effects our economy when 2,000 pieces of real estate get put up for sale, 2,000 cars, etc. etc. It depresses the local market, puts Caymanians out of work, and further damages our economy. I wholeheartedly support the suspension of the rollover. However by merely suspending it, they create uncertainty, which is even worse. They need to announce a concrete way forward for everyone, otherwise this is little more than a reprieve of the inevitable.
It is very misleading to suggest that Cayman's rollover supsension rattles Bermuda. In the article published by the Royal Gazette it states the following:
Premier Paula Cox was “not telling the whole story” when she said Bermuda’s immigration policy is more flexible than the Cayman Islands’, according to a business executive.
Ms Cox made her comments after news on Wednesday that work permit term limits have been suspended in the Cayman Islands, which previously limited them to seven years.
Asked whether Bermuda would also suspend term limits which have proved unpopular with business owners Ms Cox said our immigration model is more flexible, and the Island is no less competitive than Cayman.
However, the senior executive who has offices in both jurisdictions, and did not want his name printed said Ms Cox was not giving an accurate picture of the controversial policy, which “should be done away with altogether”.
He said there is “no process for retaining intellectual capital” in Bermuda, because there is currently no route to permanent residency or citizenship.
Seems to me like this whole strory was set in motion by an unnamed individual who will stop at nothing to spread half truths to get what hewants. The individual who is unwilling to have his name printed seem to be the primary advisor to our premier on the rollover policy and is expecting the same results from Premier Cox in Bermuda, only he will not get the same result because Ms. Cox and Bermuda is not Mr. Bush or the Cayman Islands. You can fool some of the people all the time but you will never fool the Bermudians any time.
I think Cayman got what it deserve. They always blamed expats for their unemployment. Therefore, leading to the rollover policy. And the result? hahaha
I can’t agree more, the Cayman government gave in to the loudest complainers and they got what they wanted, less expats. Thank god! However, what did these people hope would be available for jobs once all the expats are gone. I suppose some of these people could gain jobs carrying Mosquito lamps for people who come to visit from cruise ship, that is assuming the cruise ships still come. As very few Caymanians will actually serve people and work in restaurants and jewelry shops and without expats these jobs will remain vacant.
The truth is that Cayman is an amazing country with many great people and there is a symbiotic relationship between expats and locals which both benefit from in different ways. Unfortunately there are many in the local group that chooses to blame others for their problems. Any Caymanian who would like a job would be given one in this country, I have seen it time and time again companies work hard to find any litigate worker a job. Yet many of them refuse to work in many of the positions available to them and the amount of work they have put into it.
People have to understand that it is their motivation, their determination that makes this country great, there is a huge amount of the Caymanian population who have made this country better for all and continue to do so. If you speak with them and ask them how they succeeded they will say determination and hard work. What you will not hear them say, while sitting down and doing nothing, is that an ex-pat took my job.
well said by all concerned….
I don't know what to say or think about this.
Suspending the roll-over while considering changes to the law makes absolutely no sense. Do lawmakers suspend a speed limit on a roadway when considering changes to it?
The roll-over is not the primary culprit of the massive number of job losses and empty properties on island. It's the feeble state of the economy.
It has contributed to the feeble state of the economy though
"Don Seymour, Managing Director with dms Management Ltd says the rollover policy had been 'poorly implemented' and the results had been disastrous for the Cayman Islands economy".
"Poor implementation" is the UDP's way of blaming any ill-effects of Rollover on the PPM even though they created it. Rollover was not a mere 'policy'. It is contained in a statute that was legislated and came into force under the UDP. The Deputy Chariman of the UDP was its chief architect. The first Regulations that set out how it would be implemented were passed in 2004 by the UDP Govt. For better or for worse, it was implemented according to the Law which the UDP created. If that were not so no legislative amendment would be required, only a change in "implementation". Please at least be honest about the issue.