Archive for November 25th, 2012
Mac rails against process
(CNS): The premier said “so-called good governance” is nothing but “pure unadulterated bureaucracy” when he gavethe closing remarks at the Chamber’s forum event on Friday. Speaking about the “setbacks” to the projects his administration had promised because of pressure from the UK, McKeeva Bush said that, although things were now more “onerous with the new processes”, he intended to press on, but things “won’t happen overnight”, he said. Railing against the imposition of the Framework for Fiscal Responsibility (FFR), the premier said that past governments in Cayman used to get things done without all the bureaucracy that he now had to face.
“If those people had to do what I have had to do, we would not have had the West Bay Road,” he said. “If they had to deal with FFRs, there would not have been any duty free regime … maybe some people might have got investigated … but there would have been no expansion of the airports. If they had to put up with what I have had to put up with, we would not have got oil terminals or Cayman Airways. If they had to do that, we would not have gotten the port, and I could continue and …even my harshest critics have to agree.”
Bush implied that the FCO was being hypocritical after UK Prime Minister David Cameron in London made a speech recently about the need for the UK to be competitive. He said that in Cameron’s speech he had spoken about doing things differently and getting rid of the bureaucracy. However, Bush said he was getting cursed if he “moved an iota” and that too many members of the Chamber were criticising him and that they “should know better”, as he attacked those he accused of blogging against him.
“People are downright dirty … If you think I am doing wrong … to get you business … to better your businesses … we are not going to succeed without some of the things I want to do,” he said, adding that talk was cheap but “criticism was even cheaper”.
With only six months to go before the next general election, Bush raised the issue again of the possibility that he may not run for office, but claimed everything he has done during his seven terms in office was for Cayman. “I don’t know if want to go back and be premier but while I’m there I will do what has to be done,"he said. "It is not about the election. I’ve had seven terms and I can get the next one.”
The premier said that people can criticise him if they wanted, and while it hurts, the issue was about the future success of Cayman. “You know where I stand on business but you hear accusations …. Well, let them accuse; it is business; it is your future that I must care about. I have to be concerned about that the success of Cayman and not about a blog on Wendy Ledger's rubbish,” he said referring to the comments on CNS.
Although the premier pointed the finger at some Chamber of Commerce members for criticising him, he also spoke about the collaboration needed between government and the business community. The wheels of commerce were always turning and it was impossible for the government to keep abreast of all the opportunities or threats, he said. Hence the need for partnerships with business, which historically Cayman had benefited from since its early ventures into financial services and tourism. Bush described it as an “integral part of what made us a major international centre”.
The future would, however, be one based on a wider range of sectors and Bush said he was proud of the work he had done to start broadening the economy. He pointed to Cayman Enterprise City, Dr Devi Shetty’s health city project, the reinsurance law and regulations, which were opening up new frontiers of business and facilitating a breadth of service offerings.
“We must be pro-business, and whatever you say about my government, you can't say we are not pro-business,” he claimed.
Bush acknowledged that there could be better information sharing between the public and private sectors, with decisions and applications being more consistent and timely, adding there was room for improvement. He also pointed to the pressing need for improvements in infrastructure. Most of all, he said, it was important to grow the population in order to grow the economy. He gave the Chamber audience a heads-up that he would be announcing the planned changes to immigration, and in particular the seven year rollover policy, at the CBO conference in January.
“Although we have been criticized for immigration,” Bush said, referring to the UDP administration, there had been some success but not enough for the economy. He warned that if he was not the leader of the next government and the country got “what they did between 2005 and 2009, then dog eat your supper.”
He said there was more work to be done on the new policy for immigration before government was certain about what to do regarding the term limits, but he said, “We cannot build this country with just a few people. It’s obvious when we see how many businesses closed.”
Answering his critics, Bush said he was a hard worker and “was born on that side of the street”, adding that he intended to continue working hard to address “systemic problems”, but it was “not about political power, but our business and our survival. Don't expect to make a shilling when there is only sixpence in George Town,” he advised.
Port contract made in secret
(CNS): The man leading the negotiations with China Harbour Engineering Company over the proposed George Town cruise berthing facilities admitted that government was days away from signing a secret contract with the Beijing firm before the UK insisted that the premier stop the talks. Speaking during the Chamber Forum on Friday, Alastair Patterson said that when he took over the talks some five months ago, he had deliberately kept the discussion “below the radar” because he believed that the deal should not be “negotiated in the press or on the radio”. He revealed that the deal had been completed and was about to be inked behind closed doors before the FCO put an end to the plans.
Although the project represents one of the biggest infrastructure developments that the Cayman Islands has ever undertaken, Patterson confessed that the final agreement was negotiated behind closed doors and would not have been seen by the public before government had committed to going ahead with it.
Patterson said this was by design because he thought that it was not fair to CHEC. Bizarrely, he also told the audience at the Future of Cayman Forum’s panel discussion on infrastructure that it would not have been fair to the public either to know the details of the deal before government committed to it. He said that while everyone was still arguing about the details, nothing would ever have been done, and stated that, as a result, the details of the contract were negotiated in secret.
The consultant denied that there was a major upland component to the deal or that CHEC was going to get all of the passenger taxes. He did not elaborate on the details of the contract he had finalized but he said it was worth around $200 million.
He said that while CHEC had failed to qualify as a potential bidder following the invitation for expressions of interest in 2009, by 2011 they were “qualified”. Patterson did not explain how but said he had taken the negotiations to the point where CHEC and government were ready to sign. He described these secret discussions as intense as the Chinese were hard negotiators but he did nt elaborate on the details of the contract that he said had been ready to be signed. With the job pulled, Cayman was now back at square one where cruise facilities were concerned, he said.
The revelations came as a shock to Howard Finlason of Royal Construction, the local partner of GLF, the firm that had been in talks with government over the facilities before CHEC, who was also at the forum. He described it as “incredible” that, at a time when government knew it had to be more transparent, Patterson would have deliberately sought to negotiate and then have government sign a contract without the people of the country knowing the details.
Finlason said that now that these secret, closed door talks had been stopped, he looked forward to a much more open and transparent process. He warned, however, that until the direct political interference in projects of this kind stopped, it would be almost impossible for government to arrive at the best deal.
The cruise port was one of a number of issues discussed during the special break-out session on the need for a National Infrastructure Plan.
Moderated by Wil Pineau, CEO of the Cayman Islands Chamber of Commerce, the panel included Dr Gelia Frederick-van Genderen, Director of the Cayman Islands Water Authority; Gary Austin, Industry Executive for the Caribbean Region for IBM; David Watler, Vice President of CUC; Brad Watts from Bodden Holdings; and Tristan Hydes, the Deputy Chief Officer in the Ministry of District Administration, Works, Lands & Agriculture.
The failure in communication between the public and private sectors was one of the problems highlighted by panel members as a stumbling block to a national plan during the discussion. Frederick-van Genderen pointed to the problems that Cayman would face without one in the face of increasing development. She pointed to the impact that Dr Devi Shetty’s medial city alone will have on the country and its resources and said there was no coordinated plan to deal with it.
Billy Adam reminded the audience of the history of plans that have been drawn up in Cayman going back to 1972, all of which were ignored by successive governments, he said, because of corruption. As a result, the people no longer trusted government to do the right thing.
The Chamber Future of Cayman Forum took place at the Ritz Carlton and focused on two of the five drivers identified as the key to the future of Cayman’s economic fortunes at a conference in 2010: "Build a smarter infrastructure" and "Develop talent".
Parties and coalitions: what do you stand for?
We want change. But the new political group, Coalition for Cayman, must tell us what they are going to do to effect that change — and we don't want vague generalities as often spewed by Opposition Leader Alden McLaughlin or Premier McKeeva Bush. We want to hear exactly what your plans are. If you do not understand what we mean, here are examples:
Unemployment:
Our approach to solving unemployment will be a three-pronged approach:
1) We will work with immigration and labour to get Caymanians into jobs by ensuring businesses hire Caymanians who are capable over foreign workers. We will have a dedicated staff member in the labour department who will take applications for people who are applying to local companies for jobs they have advertised and have him/her coordinate with immigration to ensure that these companies are not getting work permits to fill these positions. Companies found to be abusing the system will be penalized by restrictions on staffing levels up to and including possible refusal of any new permits and if the matter persist refusal of renewals. Caymanians who are honest, hardworking, experienced andeducated need to be placed first.
2) From an educational standpoint we will take a deep look at the Cayman market to see where Caymanians can penetrate the market deeper and focus our efforts to ensure we have education plans in place to bring Caymanians along in these sectors. Things such as banking, trust management, insurance, law and other sectors need to have educational paths set up to ensure we can, in time, have Caymanians filling these positions.
3) From a business standpoint we will work harder to help Caymanians own their own business by cutting a lot of the red tape that stands in their way. We will set up a true business ownership system that involves:
Training — Teaching these potential business owners business skills like accounting, administration, marketing, contracts and more.
Financial — We will get with all banks the way we have with other programmes and offer backing to Caymanians who want to start their own business. These people will be selected during the programme based on abilities, business concept and the way they excel during the programme. We will employ a mentor programme where savvy business professionals can lend their services to mentoring your business-minded Caymanians succeed.
Other — Caymanians who are granted assistance will also get the following assistance so long as they maintain an 80% or higher proportion of Caymanians under their employment. These are: first three years business license free and 50% off the next 2 years, up to 60% off duties for first 2 years and dropping by 20% the next 3 years; assistance in annual financials from our staff for first 2 years.
Existing businesses can also gain advantages by hiring Caymanians and demonstrating their support for helping Caymanians progress in their businesses. We will offer discounts to duties or licensing fees to businesses who demonstrate an effort to help. This will be done on a case by case basis based on submissions and interviews.
Businesses who demonstrate excellence in staffing Caymanians, with 90% or more, and proof of progressing Caymanians can gain waivers of customs duties for up to three months or even free licensing, depending on which is more advantageous to the business.
Finances:
Tourism — We will rebrand the Cayman product to align more closely with the middle class family. We will lower the cost of flying to the Cayman Islands in an effort to increase seat sales. We will work with local businesses to lower the cost of hotels and activities to create a real attractive package for tourists considering where to vacation.
We will create a tourism coalition for promotion of the Cayman Islands.
We support and intend on implementing gambling in the Cayman Islands with limitations. Our view is that we will support Casinos as we believe it will increase Cayman tourism and also can help to bridge gaps in Cayman tourism product by having tournaments during the low season. Casinos will pay a premium plus percentage of winnings.
We do not support locals gambling in the casinos because we do not want local issues. Caymanians who wish to gamble could apply for a license to gamble that would cost some exorbitant amount that would demonstrate their ability to afford to gamble, perhaps a fee of CI$25,000 for a 5 years license.
We would license numbers sellers and collect 1% of winnings.
Banking – We would reverse all increases in business fees over the past 4 years and offer discounts to all new business licenses for first two years. We will consult with the business sector to see what other efforts could be made to attract new business.
Expenses:
As we are creating new jobs, our goal will be to create a more lean and mean government. We will work with Immigration to move capable Caymanians from the civil service to the private sector. Our goal is for a 30% decrease in staff over the four year span.
First phase willbe to review the Public Management and Finance Law and its decentralisation of certain sectors and reverse this process. These staff would then be transitioned to private sector by working with private sector companies. We will create a plan that offers 50% off the employees' wages over the first three months, picked up by the Cayman government.
Second phase will be a department by department evaluation of people and processes to see where new technology or cuts in processes can create redundancies. These staff redundancies will go into the CS to PS systems. This process is partially explained in our unemployment section but later expanded on.
Final Phases will be a look at what services we are doing that could be outsourced or privatised completely. This could tie into starting of Caymanian businesses also.
The final thing is that we aim to have no serious capital expenditure during our first two years, which will be spent on revamping the Cayman Islands. After which, we will be very careful and see what is necessary.
How will this be paid for?
It will be paid for by several ways:
1) Lowering of cost of government by thinning of CS staff and other cost cutting measures.
2) Addition of other revenue measures such as gambling; increases to government coffers due to more ticket taxes due to higher levels of visitors; taxes at hotels, duties from food and beverage duties.
We will also be open to other methods of making money that does not impact the cost of living. Our focus will be on lowering the cost of living here in the Cayman Islands while creating employment for Caymanians and foreign help.
We feel that if we can attain this we will reduce the stress on social services, lower crime levels, create local prosperity, stabilize the business atmosphere and place the Cayman Islands as a preferential place to do business, not only in the Caribbean but on a global level.
I would also say this: while I am not pro-PPM or pro-UDP. I would say that I would attempt to circumvent all processes put in place by UDP to restart them in a more transparent manner. This would include the Bodden Town Dump, the West Bay Road closure and the cruise berthing project.
I believe there needs to be complete transparency in these processes.
The government will work with any business, but always in the best interest of the people of the Cayman Islands. No major asset will be sold unless 90% of the Legislative Assembly votes 'yes' on matters that affect country owned assets.
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Now this is where I stand and what I hoped we would see from these people looking at representing the Cayman Islands in its Legislative Assembly.
I have hope for this "group" that their interests truly are for people of the Cayman Islands. I have said before that I would like to see some sort of "grouping" of like-minded independents formed to counter the UDP/PPM machinery, but I must say we have to take a 'wait and see' approach to this version to see if it is more a veil of intentions than a truly neutral coalition.
What we need to know from them is where they stand on issues, not just a whole bunch of generalities attacking parties, because while I understand that parties give power to people they would not normally have, it's the people that are truly the problem.
This same thing goes for PPM. It's one thing to say we are not UDP but it's a next thing to say, "Here is what we will do should we be elected …"
As for the UDP, I'm not sure what you are going to do. You are in a ship with so many holes and not nearly enough things to clog them. You are going down so fast and the sad part is, you do not even see it.
I have stated, I believe emphatically, my opposition to the UDP party and its way of running a country. I believe their tax to spend approach has taken a recession and blown it into a much larger problem, which it will take years for us to reverse. How do you reduce CIG spending by 200 million a year? This is what needs to be done.
The tax to spend approach has created two main problems:
1) Direct cost of living to the people of the Cayman Islands, which leadsto less money to spend at local businesses.
2) Local businesses increased cost combined with lesser income has caused many to close or cut staff, which has increased unemployment. This has also lowered CIG revenues.
My knowledge of economics has told me that the worst thing you can do in a recession is to increase cost to businesses or people in the way of taxes. You need to stimulate business activity by lowering business cost and/or creating incentives for businesses to offer specials.
Taxing does far more damage than it does good. The only thing it does that is good is to increase government coffers, but if this is not used to stimulate growth and only used to fund travel or other things of this nature, it will lead to a downturn in the economy.
So I challenge all parties to start telling the people where they are on many issues and what plans they have to make Cayman better for the people and businesses of the Cayman Islands.