Archive for September 11th, 2009
Civil service pay to be cut
(CNS): Despite the Civil Service Association’s fundamental objections to any changes in terms and conditions of employment for public sector workers, the government has announced that it is considering a 2% reduction in salaries for public servants making more than $3,000 per month. In a press statement late Friday afternoon, the government said civil servants would receive, in return for the cut, four days of paid leave to be taken by 30 June 2010. Chief Secretary Donovan Ebanks said the temporary measure would go into effect in October 2009 and conclude in June 2010, the end of government’s financial year.
He said the reduction would not apply to public servants who make $3,000 per month or less, or to persons employed as classroom teachers on a daily basis by the Education Department. The four days leave is to be taken before the end of the 2010 fiscal year EBanks stated adding that the Chief Secretary’s Office would issue more information on the proposal early next week.
Christen Suckoo, Vice President of the Cayman Islands Civil Service Association, said the management would be calling an immediate meeting of the membership to discuss the cut. He confirmed that the association stood by its position that there should be no changes to the terms and conditions of civil servants employment.
“In all good conscience civil servants cannot agree with government implementing policies that could be against the law,” Suckoo told CNS. “It is our job to protect government so we can’t agree with them doing something that could be illegal.”
James Watler President of the CICSA said that an official response would be issued as soon as the association had time to digest the proposal as they had been led to believe there would not be a pay cut.
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Students in machete scare
Minister for Education Rolston Anglin was briefed on the incident and he said the ministry gave its full backing to Dr Chapell and supported his efforts to ensure that the campus is a safe place.
Anglin emphasised that students are expected to do their part in maintaining an atmosphere of learning by handling conflicts in mature ways. “Reckless, immature behaviour will not be tolerated at any educational level,” he pointed out. “By the time a student enters university he or she is expected to demonstrate self control. Students who express themselves otherwise will be dealt with according to the university’s disciplinary policies, and the fullest extent of the law.”
Campus security’s first response, in cases where weapons are seen or suspected, is to immediately ensure the safety of bystanders and call 911.
Memories of Ivan from CI government
(CNS): As tropical storm Fred trundled quietly across the tropical Atlantic thousands of miles from Cayman on Friday, memories were turning to a considerably less benign weather system—Hurricane Ivan. Five years ago the category 4 (possibly 5) hurricane began its catastrophic assault on Grand Cayman, the most powerful storm to hit the Cayman Islands since the 1932 hurricane and certainly the most destructive storm in the islands’ history. Donnie Ebanks said he remembered well preparing for what could be a devastating event.
Ebanks, who was at the time Chair of the Hurricane Committee and Deputy Chief Secretary, recalled, “Inside the Emergency Operations Centre, we were especially concerned for residents of Cayman Brac and Little Cayman as they battened down in expectation of a direct hit. However, as warnings had suggested it might, Ivan’s direction changed and the storm set its sights on Grand Cayman.” He said, “We were not unprepared: leading up to the storm, some 10,000 residents and visitors had been evacuated and indeed, a similar number left ravaged Grand Cayman soon afterwards.”
Ebanks added that he used “ravaged” deliberately as Ivan was a devastatingly powerful weather system which severely damaged local infrastructure and tested emergency plans to the limit.
“Add last year’s Paloma to Ivan and, without fear of contradiction, I can say that we all have had enough hurricane memories to last a lifetime,” Ebanks said. “Invariably, positive memories outweigh the negative. Certainly our heroes comprise one of our most outstanding Ivan legacies. Their actions and our collective sense of responsibility helped to take us safely through and these characteristics also bode well for the future. Much of our success in overcoming adversity has resulted from our preparedness levels, our faith and our spirit of optimism.”
He said while we had been fortunate this hurricane season we should not forget it still has three months to run, and that the latter half of the season is well known for systems that develop rather quickly and close to us, particularly to the south.
Leader of Government Business McKeeva Bush who was also Leader of Government Business when Ivan struck said he too had memories not just of fear and loss but of compassion, unity, cooperation and survival.
“As a people, we truly demonstrated our resourcefulness and resilience in the face of what seemed to be an impossible situation. The devastation was incalculable and there seemed to be very few options regarding a way forward,” he said adding that the people of Cayman are no strangers to hard work and finding creative ways to hurdle obstacles that threaten to derail our careful plans.
“Ivan brought this community together in a way that was reminiscent of days past, when neighbours knew they could depend on each other for help,” he said. “As the storm approached, people volunteered to help others prepare their homes for impact. As the weather worsened, there were those who risked their lives to rescue neighbours in difficulty; many worked to secure surroundings during the darkest hours — even when they were unsure of their own families and properties. And in the aftermath, many shared food, generators and homes with those who’d experienced severe losses.”
Bush also recalled what he said were the good Samaritans who travelled to Cayman from afar, to help restore utilities, the infrastructure and the economy.
”Today, who can tell that such a devastating event even took place? Looking around, our recovery was indeed remarkable. It stands as a testament to the will and strength of so many,” Bush added.
Ever the politician he stated that as the country faces other serious challenges, the determination, drive, and ingenuity with which we approached post-Ivan recovery are the exact attributes needed to rise above the current economic storm. “Already many have made, and still are making, their contributions. Suggestions and possible solutions to help us navigatethese unknown waters are still being submitted,” he added. “For this is yet another period in our history when we must pull together, putting all differences aside to find the means to survive – just as we did with Hurricane Ivan.”
The Governor Stuart Jack who was not here during Hurricane Ivan said that when he arrived just over one year later, the recovery was already remarkable. As Chairman of the National Recovery Fund he said he had met people who were still suffering and claimed to have come to understand how Ivan had affected people and how much had to be done to recover fully.
“In spite of personal losses, workers from all branches of government responded with sacrifice and determination to the tasks at hand,” the governor said. He added that the Cayman of today has internalised the lessons of hurricane preparedness and recovery and he urged everyone to check their hurricane plans.
Bridges to nowhere
(Economist): Pittsburg the host of the next G20 summit on September 24, is known as the “city of bridges”. Anyone watching the build-up to the meeting may have already concluded that they will lead to nowhere. The warm-up event, a meeting of finance ministers and central bankers in London on Sept 4 produced a fog of contradictory statements by multiple politicians, some from the same countries. Depending on whom you listened to, capital requirements will get tougher quickly—or very gradually, to prevent banks shrinking their loan books. Bonuses will be governed by strict formulas—or by broad principles. Accounting rules will be made more forward-looking—or loosened to prevent big losses coming all at once.
Currency Reserves
The reason for the delay in commenting further is because I have been seeking clarification of certain matters raised by Mr Goelo. The views I am expressing are personal as I am no longer Chairman of the Monetary Authority.
In summary, the position is as follows:
1. I have no objection to gold as a private investment or for many central banks (where there is no currency peg) as part of a prudent diversification programme. My point is that it is not appropriate for the Cayman Islands currency, certainly not as it is currently structured;
2. The CI dollar is tied to the US$ as this is the most logical given our revenue and expenditure. It would be risky to tie the currency to anything else (we can think about the SDR in the future). As a result, we enjoy the benefits and pains of the US dollar and US fiscal and monetary policy. When the US dollar is weak, it makes the Cayman Islands more attractive as a destination for tourists and financial services operating in stronger currencies. Commensurately, when the US dollar is strong, we are more expensive to those same persons.
3. As long as the CI dollar is tied to the US$ and the investments in the portfolio backing the currency are in US$ also, there is no exchange risk. And provided the investments are in top quality US dollar denominated government and corporate securities of one sort or another or on deposit with the Federal Reserve and relatively short term or held to maturity, there is no real risk of loss of capital. The decline in the currency reserve assets between December 2007 and June 2008, pointed out by Mr Goelo was not the result of losses in the portfolio (indeed the portfolio gained during the period!). Rather, the decline was due to the proper transfer of surplus in order to fund the Monetary Authority operations (and to reduce the amount required from Government). This is permitted by the Monetary Authority Law (MA Law).
4. The structure of thecurrency requires the Monetary Authority to be able to redeem in US$ every CI$ that is presented to it. So in theory, every holder of CI dollars (all $83.5 million) could present themselves and demand to be paid US dollars (there are very few currencies with the same structure today). Thus, the reserves need to be in US dollars and very liquid, even if the possibility of that level of redemptions being made is remote today. Thus, the MA Law requires the currency reserves to be invested only in very conservative short term top quality US dollar debt securities or top quality banks (including the Fed). Were the currency reserves to be held in other investments, even if hedged, the risks and costs are increased. Unhedged positions could be disastrous.
5. The IMF/World Bank guidelines for forex reserve management recognise that countries with a fixed exchange rate and that operate a currency board need reserves that provide confidence in the peg and deter speculation. Thus, they note these reserves “tend to be invested in a form that facilitates their ready availability”.
6.It is correct that Cayman may be losing a possible opportunity to make more profit on the currency reserves than the current rock solid and conservative returns, but I am not persuaded that the risks and costs are worth it. However, I do agree that the structure of the currency and the reserves should be kept under regular review.
See also Tim Ridley’s first response
Cops arrest 3 in club shooting
(CNS): Police said this morning that three men have been arrested in connection with the murder of 35-year-old Carlo Webster, who was shot inside Next Level Nightclub in the early hours of Thursday morning. The three men, all in their twenties, were arrested in West Bay and George Town by officers from the Uniform Support Group on Thursday (10 September). Senior Investigating Officer, Detective Chief Inspector Peter Kennett said the enquiry was progressing well and the security tapes at the club have provided excellent information.
“We have directed a number of resources to the enquiry and the team is following up a number of promising leads,” he said. “There is a lot of work to do and a great number of witnesses to speak to and all the officers involved are working exceptionally hard.”
Webster was shot at around 1.30am inside the club and police said a post mortem is expected to be conducted this weekend by a forensic pathologist from Miami Dade. Photographs ofthe victim circulated on the email yesterday indicated that Webster had been shot in the head by the gunman, who reportedly fired three shots in the club with some 150 people inside.
The shooting has sent shock waves through the community, which was already reeling from an increase in gun violence, because of the brazen nature of the attack. The gunman effectively opened fire in a public night spot in front of cctv cameras and 150 people, putting all of their lives at risk.
“The mentality of someone prepared to do that is extremely worrying,” said Kennet. “It’s time for people to come forward and stand up against this despicable violence and bring the community back to the level of safety people expect.”
A second man who sustained a gun shot wound to his stomach, for which he received medical attention, was found in the car park of the nightclub and police said he is doing well. Police were unable to comment on the man’s connection to the incident and whether he was an intended target or merely an unintended victim of the shooter’s decision to open fire in a public place.
“We are getting good cooperation from nightclub staff and from some members of the community,” said Kennett. “I appeal for this to continue and ask that anyone with information come forward.”
The RCIPS also called for people not to take matters into their own hands and to allow detectives to do their jobs. “We are working very hard on this case and assure the community that all will be done to bring Carlo’s killer to justice,” Kennett added. “We need people to work with us on this.”
Anyone with information about the shooting can pass it on to police in a number of ways; people can speak with an officer they know and trust, they can reach George Town detectives on 949-4222, they can leave information on an anonymous voicemail service by calling 949-7777 or they can call Crime Stoppers on 800-8477 (TIPS). All persons calling Crime Stoppers remain anonymous, and are eligible for a reward of up to $1000, should their information lead to an arrest or recovery of property/drugs.
“No apologies” for schools
(CNS): Despite the enormous criticisms that he has faced for building state-of-the-art education facilities, the former minister for education has vigorously defended his decision regarding the school development project. He said the decisions were carefully considered and those schools had been designed to give Caymanian children the best possible chance of improving their educational outcomes. McLaughlin also lamented what he said was a big difference between the political parties when it came to commitment to education and he made no apologies for initiating the school projects.
“There is a huge divergence in the philosophy of the PPM and the UDP regarding the value of education. The Leader of Government Business himself, McKeeva Bush, places very little value on education and so the priorities of the two governments have always been very different,” McLaughlin said at a PPM conference on Wednesday. “He spent $62 million building Boatswain Beach. During our term of office we pumped $27 million into that to subsidize recurrent expenditure. Is that value for money?”
The former minister said education is the most critical area that government needs to address in the Cayman Islands. “We had not built a high school in more than a quarter century,” he observed, adding that parts of John Gray are more than fifty years old. He said the decision to build the school was carefully considered and based on growing numbers and the desire to eliminate the need for kids to get up at 5 am and spend hours travelling to and from school from the districts, as well as the impact on traffic.
“We spent a lot of time looking at the logistics of what we were trying to achieve,” he explained. “There was also the equity issue. How could we say to one set of parents and students that you are entitled to state of the art 21st century learning environments because you live in this particular area but those of you that remain in George Town will have to make do with education facilities that have been around since the fifties?”
McLaughlin emphasised that these were some of the reasons why the PPM had decided to build all three schools at once. Justifying the costs of the learning facilities, he said he had spent a lot of time looking at learning environments around the world and how those environments impact outcomes for students.
“Anyone who has taken the time to do the research will see that the impact is immense,” he added. “I am making no apology for seeking to achieve the best possible learning environments the country could afford for the children of these islands. I just hope … that the functionality is not compromised so they don’t deliver what they were designed to deliver.”
He said, based on things he had heard, he was concerned that there were plans to undermine the facilities that would be on offer and the principles behind the new learning environments because of a different belief towards how children are taught. “There are those who continue to subscribe to the view that just building boxes where children sit in regimental rows and are instructed by the teacher will suffice,” he said. “That’s what the last government did when they built Prospect Primary.”
$10 million was spent on a school initially designed for 500 students, McLaughlin noted, with few of the facilities that the new campuses will provide. “One year after it opened it was over capacity and the music and art rooms have been turned into classrooms,” he said, adding that there was now a modular unit there less than five years after construction. McLaughlin warned that this is what happens without long term consideration about future educational needs.
The former minister said it was not just about the facilities but he had focused on professional development of teachers, the introduction of the first national curriculum and a transformation of the education system. He said the goal was to improve outcomes and there was clear evidence that outcomes were improving as a result of the changes he had introduced.
“That’s what it is all about — unless you are producing better outcomes none of it really matters,” he said. “We are able to point to the most recent … examination results. There is tangible evidence that the steps we have taken are working. We have gone from 17% in 2006 of students getting at least five good passes to 27% in 2008 and 36% this year.”
McLaughlin also emphasised that the new campuses are not just schools but they will also provide community facilities and hurricane shelters. “Its time to stop beating up on projectsthat are going to inure for the benefit of the people of these island,” he said, adding that while he or the PPM may never be in office again, if the projects were properly completed and served proper purpose, it would redound for the benefit of the children of these islands. If they didn’t they would breach the fundamental duty they have as elected representatives.
“Its time to get on with doing the job and stop complaining that the job is too difficult for them,” McLaughlin added.
Leader of the Opposition Kurt Tibbetts also defended the new Government Administration Building, noting that not only would it save government revenue on leases, it would be 70% more efficient than the Glass House, the current office accommodation used by government . He said the project would soon pay for itself and provide government with an asset. He also said that while the government was criticised for improving infrastructure, it would be hard to imagine life without the East-West arterial road.
“Government behind 9/11”
(Telegraph): Charlie Sheen has prompted outrage in America by claiming that the government was behind the September 11 terror attacks. In the lead up to today’s eighth anniversary of the attacks on the World Trade Center and the Pentagon, which killed more than 3,000 people, the actor has insisted there was a cover-up by the Bush administration. He appealed to President Barack Obama to reopen an investigation into the attacks, the Daily Mail reports. Sheen, who is the highest-paid actor on American televison, claimed that "the official 9/11 story is a fraud" and said the commission set up to investigate the attacks was a whitewash.
Semenya ‘a hermaphrodite’
(Telegraph): A gender test on South African teenager Caster Semenya has revealed that she is a hermaphrodite, threatening to end her track career just weeks after her runaway 800 metres triumph in last month’s World Championships in Berlin. The tests carried out on the 18 year-old shortly after her victory in Berlin are believed to have shown that she has a chromosomal abnormality that gives her both male and female characteristics. According to reports in the Australian media, the medical tests have established that she has no womb or ovaries and that she also has internal testes – the male sexual organs responsible for producing testosterone.
Rich ditch US citizenship
(Wealth Bulletin): As offshore havens comply with transparency demands, a growing number of ultra-wealthy Americans are handing back their passports. Private client lawyers and relocation specialists are reporting a surge in wealthy Americans living abroad who are prepared to give up their citizenship to avoid the scrutiny of US tax authorities. Although such a move means they have to pay an exit tax, lawyers say this is a price people have become more willing to pay this year, now the fall in asset values has reduced the size of the imposition.