Archive for November 22nd, 2008

Time for a Minister of Financial Services

(CNS): The suggestion that Cayman should have an elected Cabinet member responsible for and devoted to the financial services industry has found traction and support among leaders in the private sector and local media and also in certain political circles  outside Government.

So it is time to add some flesh to the bones of the idea.

It bears repeating that the financial services industry is critical to Cayman’s continuing economic success. And that the industry is under serious assault and challenges from various outside sources. For the Islands therefore not to devote much more focus, energy and resources (both human and financial) to the defence, wellbeing, nurturing and promotion of this cash cow is surprising and disappointing. After all, many Government programmes and projects will be very impaired if the revenues from the industry are not there to fund them.

To bring the necessary focus and produce the necessary action and good outcomes, a new approach should be taken. But first, it is important to appreciate that financial services are not the same as the fiscal policy and finances of the Islands. They require different talents and a different approach.

So, the Portfolio of Finance and Economics (PFE) under the Financial Secretary (ex officio Cabinet member) should remain in place and continue be responsible for the fiscal policies, budgeting and revenue and expenditures etc of the Islands (and government companies and statutory authorities). That is more than a full time job for the Portfolio, as can be seen from the continuing issues with securing current and accurate accounts for the Islands as a whole (it is noteworthy that there has been no published Annual Report for the Islands since 2005).

A brand new Ministry or Department of Financial Services should be established and properly structured, resourced and staffed and report to the elected Minister of Financial Services who will carry the flag for the industry at Cabinet meetings and elsewhere and have a vested political interest in its success. Those officers and staff in the PFE who currently deal with financial services matters (there are remarkably few), including the Secretariat and the Communications division should transfer to the new Ministry/Department. Clearly, greatly increased resources will be needed than at present to deal effectively with the local legislative needs, the international initiatives, the competitive challenges and the defence and promotion of the financial services industry.

It is not difficult to identify what is needed structurally (the Government has a long history of rejigging Cabinet descriptions and responsibilities to suit the times) for the long term good of the Islands and it need not wait upon any constitutional change, but is there the political will to make it happen?   

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