Cayman suffers international “Schadenfreude”

| 07/09/2009

(CNS): The global media has been making the most of Cayman’s financial troubles this week and seems to have taken something of a gleeful pleasure in Cayman’s exaggerated financial downfall. From radio stations based in neighbouring Jamaica to blogs in New York City, trade press to reputable daily newspapers, the irony that Cayman was even considering, never mind possibly forced to introduce, direct taxes by the UK government seems to have warmed the heart of a number of international journalists and bloggers worldwide.

Responding to the global gloating, Leader of Government Business McKeeva Bush said on Thursday at a the weekly government press briefing that the recent international media coverage suggesting that the Cayman Islands is bankrupt was wrong. “We can confirm that these accusations are incorrect,” Bush said. “Indeed the recent statement made by Moody’s confirms that the Cayman Islands remains one of the most highly rated financial services jurisdictions in the world.”

However, the government continues to struggle to pay its bills and admitted recently that there is no cash in the government coffers until the UK gives the go ahead to draw down on the borrowing that the Cayman Islands government says it has secured on the financial markets. Much of the world’s reporting has been centred on a mistaken belief that Cayman has gone to the UK government for cash, which is not the case.

Owing to the fact that the previous administration failed to remain within the parameters set by the Public Management and Finance Law, the current government now has to gain special permission from the FCO to borrow more money, even though the funds are not coming from the UK government. Among the many papers to get it wrong, the Financial Times also suggested that London may have to pick up the final bill for Cayman’s fiscal difficulties.

Bush explained in a release from the Ministry of Financial Services Public Relations Unit, which is being distributed globally, that the Cayman Islands was not asking for cash from the UK but that the requirement to seek the UK’s permission is based on statutory restrictions which the Cayman Islands government have placed on itself to ensure continued prudent fiscal management.

Bush said, “Cayman is well placed to take advantage of the global economic recovery and is committed to continuing the success of the indirect tax system which has served the country so well over its history.”

However, in a recent letter to the LoGB, Chris Bryant, the Overseas Territories Minister from the Foreign and Commonwealth Office, stated that the UK was not prepared to give its OK on further debt until the CI government came up with a long term revenue raising measure – i.e. new direct taxes.

Bush confirmed on Thursday that he will not be pursuing that avenue and will be presenting the UK government with ideas for longer term investment and PFI strategies that will raise revenue, coupled with expenditure cuts and raising the rate of some existing fees. If Bryant accepts the plan Cayman will get the go ahead to draw down on a $372 million loan which has already been negotiated.

If the UK rejects the ideas, however, government will be faced with a serious problem at the end of September with no funds to pay public sector workers or local contractors. One UK newspaper that got itright about the need for UK approval of a loan, the Guardian said in its editorial that Bryant’s initial failure to approve the borrowing was based on the weaknesses of the US and other economies, hedge funds and the rest of the financial services industry. Bryant said in his letter to Bush: "It would be unwise … to expect that the Cayman Islands’ prosperity can presume on an offshore tax haven status."

The UK paper noted that the palpable relish in that sentence was probably no accident. “As more British dependencies have to call on ministers for assistance, Westminster can demand they clean their act up,” the Guardian wrote. “Let ministers start with the Caymans.”

The Guardian editorial also suggested that the UK was in a position to manipulate Cayman and demand that the government institutes automatic exchange of tax information with all countries, rich and poor alike, and request that no taxes are introduced that hit the … poor while letting off the wealthy.


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  1. Anonymous says:

    I’d sign that petition as well as would my entire family.   Not only did Mac make those comments but then critcised the Telegraph as being ‘immature and irresponsible’ for quoting him! However did the the world’s 5th largest financial centre elect such an uneducated man? This is internationally embarrasing for Cayman..

  2. Anonymous says:

    The imminent downgrading of Cayman’s credit rating by Moody’s will once again allow Cayman’s critics to call into question the complete lack of understanding reagarding the handling of the internationanl media and public relations repeatedly being demonstrated by the LOGB and his higly paid “advisors”. When are they going to figure out that they need to look more than “60 seconds into the future before they open their mouths?

    McKeeva – Please for the sake of our children think before you throw things into your own path.

  3. Anonymous says:

    Cayman is in a world of doodoo just like the UK and US were until they started printing money. They are premitted to print their own money, whereas the Cayman Islands is forced to loan money from other countries and banks. Doesn’t seem entirely fair?


    • Anonymous says:

      The UK and US engage in deficit spending by borrowing as well. They mainly do this by issuing Treasury Bonds. The difference is that they don’t need anyone else’s permission to do so. Cayman can issue bonds as well. The problem is that we may be facing a currency devaluation.  We may well be headed towards parity with the US Dollar.  

  4. Frequent Flyer says:

    Well said!  What a shame that you remain nameless.


  5. Anonymous says:

    Really excellent post Anon at Sun 23:08. Very balanced and sensible.

  6. Anonymous says:

    Why are posters obsessed with the UK trying to do Cayman done down by skullduggery?  There is no need to be so devious – the UK could alter the laws of this land as they wished regardless of what the 25% of the population who can vote think.  The UK is entitled to intervene in the interests of the UK regardless of the narrower interests of Cayman.

    The fact is there is a perception that offshore structures have been a factor in undermining global regulation and have reduced tax income at a time it is acutely needed.  This is the view of all the leaders of the major economies. 

    Rather than being pathetic spoilt children about this and being blaming and hysterical, Caymanians need to put their case forward internationally as to why the perceptions are not true.

    • Anonymous says:

      Thank you UK, and Thank you PPM.

      • Anonymous says:

        Thank you PPM? are you kidding me? you are either lost or confused or maybe just both…..

    • Anonymous says:

      To an extent what you say is true regarding the UK, but that does not make it right or decent. Do you not see that by blindly accepting Britain’s "entitlement" and apparently condoning it, you are another "bury your head in the sand" apathy merchant. Don’t you care about the effect on your own life or that of your fellow people in your country of residence? Maybe you do not live in the islands? You do not make this clear.

      You say: "The fact is there is a perception that offshore structures have been a factor in undermining global regulation and have reduced tax income at a time it is acutely needed.  This is the view of all the leaders of the major economies."

      A perception yes, but that does necessarily make it so. Regurgitating the views of the major economies does not make you informed, rather, it again suggests mute acceptance and resignation. The majoreconomies are in a mess because they themselves are guilty of failing to implement regulations that were designed to prevent the financial fiascos that have brought their countries crashing down into a generation defining recession. It wasn’t that the regulations did not exist, they just were not enforced by those who should have taken responsibility. Those same people now accuse offshore finance centers of greed or corruption and use a host of other unpleasant adjectives that they know full well are equally and entirely applicable to their own mismanagement and policies.

      I do not see my views as those of a pathetic spoiled child, nor are they hysterical, but blame where blame is due. I do agree that Cayman now needs to come forward with evidence to refute the naysayers and firmly prove once and for all that we are not the authors of the whole world’s misfortune, which seems to be the view held by so many in their search for anyone to blame but themselves.

      I am not Caymanian by birth, sir, in case you were suggesting I am. I am just a man who believes in the rather old fashioned concept of a fair hand, honesty and integrity and standing firmly behind those beliefs.

      • Anonymous says:

        The poster was not regurgitating views of others, he pointed out what others were saying in the hope that Cayman would be proactive in explaining its position rather than defensive, blaming and hysterical – one’s mind turns to the infamous "first do no harm" speech.

        When you refer to "your country of residence" I think the more accurate phrase is "your territory of residence" and that is critical in the context of these issues.  Cayman, the territory, cannot win a fight with the UK, the sovereign nation, and can only be the loser from any divorce proceedings.

        • anonymous says:

          Yes, the poster uses the word "perception" and says "this is the view of all the leaders of the major economies". These statements are hardly definitive, offer no proof or evidence and are simply being repeated and assumed factual. Regurgitation.

          Being proactive in this case goes hand in hand with being defensive. Hysteria has no place I agree and blame is always a cloudy issue.

          I do not agree on splitting hairs regarding country or territory of residence, sorry. Cayman is a country by right and a territory by choice of its people. Under the UN charter, Britain and its government has a legally binding duty to protect the human rights of the people of its dependent territories. (Unfortunately of course this has been disregarded by the UK before now and there is no reason to suspect they would have any qualms about disregarding it again in the future).

          Regardless of whether we are applying this to Cayman or any dependent territory, what you advocate is passive acceptance through fear, regardless of right or wrong, based on the premise that if a fight cannot be won it is pointless to enter into? Thiswould be proactive? Is this for fear of what you might lose or what you feel certain you will lose?

          So, ultimately, should a situation arise where any small and defenceless country is subjugated by a world power, your view is that for those people it is easier and safer to shrug their shoulders and say, oh well, never mind, that’s life, we deserve little else. Those who have the might, have the right?

          In such a situation, the small country/territory cannot win and might lose more than it can possibly gain, I agree. By the same token , those that hold the upper hand and the power are always content to rule you through that fear, it is the best stick they have and they know it.

          • Anonymous says:

            "Cayman is a country by right and a territory by choice of its people." Good one! So it is a territory. "Bob is able to travel to Miami by right, but lives in Jacksonville by choice"  Bob is not in Miami, he is in Jacksonville. 

            • anonymous says:

              Oh dear, you must have missed analogy 101.

              If people think you a fool, sometimes it is best not to open one’s mouth and prove it beyond a shadow of a doubt.

              • Ann Ology says:

                I may only have studied logic at university, but I do think the labelling of someone else a "fool" is dangerous when it seems their comment on theterritory/country issue is logically analogous.

                "Cayman is a country by right and a territory by choice of its people"

                1. Proposition 1: Cayman could be a country if it chose to be.

                2. Proposition 2: Cayman choses to maintain its status as a territory.

                "Bob is able to travel to Miami by right, but lives in Jacksonville by choice"

                1. Propistion 1: Bob could live in Miami if he chose to do so.

                2. Proposition 2: Bob chooses to live in Jacksonsville.

                In both instances the present state of affairs may be through choice but it is still the present state of affairs i.e. Cayman is a territory not a country; Bob lives in Jacksonville not Miami.

                One could logically compares these circumstances to "If I am married but dislike my husband, I could get a divorce.  But until I seek and obtain a divorce, I am still married."

                Or mathemtically: If M occurs then X=B, but until M occurs X=A. 

                As long as M has not occurred, then answer to "What is the value of X?" is A.

                Please do tell why the poster was a "fool" and missed "analogy 101"?  Since this has been "proved" to one as clever as yourself, please let us have the logical reasoning behind your proof. 

                • Off Topic Bob says:

                  I agree with the criticism of the analogy. Although at a glance your splitting of hairs all sounds very clever, you destroy your argument for logic in your first proposition.

                  "Cayman could be a country if it chose to be"

                  These are your words. This is not what the original post said. You even quoted the line yourself:

                  "Cayman IS a country by right AND a territory by the choice of its people"

                  Had you said, "Cayman could be entirely independent of the UK if it chose to be" you would have a slightly better basis from which to defend the author of the analogy and your own self proclaimed "university obtained logic" ; maybe. Citing qualifications as a precursor to trying to sound smart is invariably the sanctuary of the unwise.   

                  The use of the word "and" is key. Cayman IS a country. It is ALSO a dependent territory. The "choice" is not of one over the other. Both states exist at the same time. Choosing to remain a DT of the UK does not alter the fact that Cayman is a country. Should it ever choose to sever it’s ties with the UK it will still be a country. The choice issue as set out in the whole Bob nonsense is moot because good old Bob is choosing one thing over another and cannot presumably be in more than one place at a time. Ergo his "choices" are not analagous to what you are misquoting and nit picking about.

                  So, the Bob analogy is lame, yes. The relationship between hypothetical Bob, an individual living and breathing human being, and his choices as laid out, are not consistent with the issue of the status of a nation and which you are attempting to manipulate simply to fit the analogy.

                  What matters is that the original post was making the point that Cayman as a country is not beholden to the UK by anything other than a voluntary arrangement. The point being that all the nonsense posted by people in the UK about how their goverment should be laying down the law and Cayman existing at the whim of its imperial masters is quite offensive to many. It is not ruled completely by the UK and its Parliament and has its rights to self determination and its own government. It retained loyalty to the Crown not because it was forced to but because it elected to.

                  As far as choices go, yes, that was a choice but not one made at the expense of becoming an English county called West Cayshire or some such and surrendering all rights of nationhood.

                  I for one don’t care about Bob. He doesn’t even live here.

                  • Bob is my Uncle says:

                    "Country" is a loose term – is Wales a country?  But what is certain and indisputable is that Cayman is not a sovereign state.  Bottom line is that this is a territory and the UK is entitled to govern it in the best interests of the UK even if that is not in the best interests of Cayman in isolation. 


                • I'm Anonymous Too says:

                  Come on, you are both being petty. If you read the comments in chronological order –

                  Anonymous 09/07/2009 – 15:58.made some good points.

                  Anonymous 09/08/2009 – 16:51.introduced the "territory" vs "country" theme arguing with the previous poster’s comment "Don’t you care about the effect on your own life or that of your fellow people in your country of residence?"

                  anonymous 09/08/2009 – 19:36 argued that it was splitting hairs to introduce that differentiation.

                  (In view of what was being talked about I tend to agree it’s a bit of a red herring)

                  Anonymous 09/09/2009 – 05:52. The Bob comment was someone trying to score a point and wasn’t very well done.

                  anonymous 09/10/2009 – 02:30. Retaliates with an insult. (Kinda made me smile though).

                  Ann Ology 09/10/2009 – 15:15.Takes it all too seriously 🙂

                  All these exchanges are anonymous so we can’t tell who is arguing with whom or who might just be playing devil’s advocate.

                  I reckon it’s all irrelevant to what the first comment was all about and that was, if I read it correctly, that just because Cayman is a dependent territory it does not follow that it is acceptable or right for the UK to behave in a dictatorial or imperialistic fashion in its dealings with them.

                  The writer was arguing that when that occurs the DT should stand up for itself and demand a just and fair hearing and treatment as accorded by its special relationship. Better to fight for rights and recognition even if it may be a losing battle because it beats curling up in a ball and taking a licking as your due. I think that was the message.

                  Just my 2 cents.

  7. Anonymous says:

    It is true that Cayman’s LOGB finds himself in a very diificult position, although I fail to see how the two previous commentators have arrived at their rather confused conclusions. This is the result of many mistakes, made by more than one person. No doubt some of it falls on the shoulders of our government and its policies in previous years, but the problems are not something that cannot be overcome now, with diligent and carefully considered policies as opposed to knee jerk reactions and crumbling under pressure from outside forces.


    If you have not already done so, read the Guardian editorial that this article links to, and read also the comments on that article. The Guardian is a UK newspaper with leanings towards socialism and therefore has little sympathy for anyone or anywhere that there is a sniff of wealth. Perhaps you have not read either the insulting comments from one Guardian writer who claimed that "most native Caymanians live in single story houses surrounded by scrubland and goats and chickens". (we all know that roosters and chickens do not discriminate on the basis of anyone’s paycheck of course). If you had, you would perhaps give far less credit to their journalistic ability when it comes to reporting accuracy or independent commentary.


    Bear in mind too, people of Cayman, that your country is being used in a global political game in which both the UK/US leadership are looking to divert attention from their own catastrophic failings and those of the unregulated banking practices that were allowed to go unchecked in their own countries for far too long.


    The LOGB has so far held his own in this matter and is standing up to a country who Caymanians have long believed to be their friend and protector, but the latest high handed and frankly colonial message, delivered by a relatively low ranking FCO employee, has to be read as exactly what it is. A rebuke from a government that is demonstrating acute hypocrisy in its dealings with the Cayman Islands. One reason for this is doubtless the UK’s ailing government’s desire to placate the US President for fear of falling out of favour.


    Perhaps as Caymanians, you should lift your sights a little higher than the bickering over PPM/UDP squabbles and recognize where the real threats to our future lie. The UK seems quite willing to write off our economy as collateral damage in a cowardly attempt to save its own skin and protect its own self serving interests. This should at least send a clear message to all of you regarding just how little we are held in regard by those in Westminster. The greatest surprise of all, is why this should come as a surprise to anyone; in Cayman or anywhere else.


    Indeed, as this article points out, the level of gloating and smug self righteousness that has been so apparent has been quite astounding. Much of this stems from the UK and not just journalists and politicians either – plenty of UK citizens have weighed in with their insults and hateful messages aimed at our islands and their jibes and insults have proved only their ignorance.


    Do not be fooled Caymanians, the UK government is hardly in any position to lecture anyone about mismanagement of public money, or indeed, much else.


    Despite Cayman’s ongoing efforts and policies with regard to tax transparency, it seems nothing is going to prevent the witch hunt from continuing unabated as long as the UK/US decide it will continue.


    I say well done to Mr Bush for standing up to the bullying, maintaining his dignity and remaining steadfastly against direct taxation. I hope he will take advice from the right people and so find a solution that is right for all of us and proves that as a country and a people we can solve our own problems. If he can do that and thumb his nose at those who have insulted him and, by extension our country, he is going to need the suppport of us all, regardless of beliefs or past internal squabbles. Now is not the time to be trying to score political points against Mr Bush. As a nation, standing together has never been more important than now.


    Our islands may be in short term financial difficulty, but let us prove that we are not as morally and humanly bankrupt as those across the ocean who would simply stand by and rub their hands while watching us fall. Such smug, superior and colonial attitudes ceased to be their right a very long time ago.

    • backstroke says:

      To the writer of "is it true" posted at 23:08 sept 09.  I wish that I could shake your hand, you put it just the way I see it also. The UK/US is all in this together and Gordon Brown do not want to fall out with Obama so he put the screws to Cayman, but the US didnt have to pressure UK to screw us you know they have been doing that for years to all of the OT and we must all accept it like blind sheep. To the poster that said that the brittish residents here are putting out info on this and other sites demeaning the people of these islands we are all aware of that in our daily lives, they are not friendly people, they  are smug and only want to associate with their own kind  sometimes I think that is best as we do not need their harmful ways and ideas to further ruin our country, blame us for it all we allowed it to happen by being too naieve about people.    Lesson learned.

      • anonymous says:

        Thanks backstroke.

        For the record I am an expat 🙂

        I just love my home and its people, Cayman.

  8. Anon says:

    Amazing the ramifications of speaking before thinking. Must be the weight of dragging around the make believe "Premier Designate" title.

    • Frequent Flyer says:

      Wait a minute… make believe???  Isn’t the inauguration ceremony to take place in November? Over $200K is a lot of money to spend on a party for a ‘make believe’ title. But hey, everybody likes a party! Right!?  Maybe I heard wrong.


  9. Anonymous says:

    Well well well…..isn’t this a fine mess that McKeeva has gotten us into again with his stupid, thoughtless and reckless statements.

    Now the UK, the EU and the OECD has exactly what they want…..a stupid "unaware accomplice" to help bring Cayman down. Of course he blames the PPM for this too….for his own big mouth….can you imagine that ?.

    McKeeva is unfit to lead Booby Key much less the Cayman Islands.

    Our "friends" in the FCO, the UK Treasury, the EU and the OECD must be laughing their ass’s off now at their "unaware accomplice"

    Its time for sensible leadership Cayman !!!

    • Wes'Bay-a says:

      To: Submitted by Anonymous (not verified) on Sun, 09/06/2009 – 20:59.

      "Well well well…..isn’t this a fine mess …….."

      Do you think or are you suggesting we should now start-up a No Confidence Vote petition?