Editorial

A Bond Issue WillWork For Cayman

Investing in this country's stable businessatmosphere has worked for investors who have been coming to theCayman Islands for the past three to four decades, and they benefitedhandsomely for their foresight in using this jurisdiction to increasetheir net worth many fold.
There is, therefore, absolutely no reason then, why the hoststhemselves ­ the people of the Cayman Islands ­ shouldnot embrace and use the same tools they have created for othersto use to further their ambitions to become financially self-sufficient.
By this we mean, there should be some serious considerations givenby the Government of the day, to initiate plans to launch a 'CaymanIslands Bond Issue', whereby even a miniscule percentage of themedium to long term deposits being held in Cayman Islands banks,could be open to investors who would like to investment in thecountry's future tourism, financial and IT development, whichmust be undertaken by Government to keep abreast of its competition.
The way it presently works, in regards to how the people of Caymanare losing control of their inherited wealth, has been obviousfor many, many years. In often-repeated scenarios, moneyed investorshave bought off tracts of land, cut them up into smaller piecesand then sell them back to the people at a very high rate of profit.
Caribbean Utilities (CUC) - the local franchised provider of electricity- is an example of how Cayman products can be so profitable, thatit is the prized stock of hundreds of local and overseas investors.Cayman National Bank (CNB) which is also privately owned is nowconsidered to be the largest retail banking operation on the island.It has been suggested before, that because the board of directorsof some retail banks comprised of previously elected senior membersof Government, there has not been any serious attempt to incorporatea Central Bank for the Government.
Because of the present state of the financial affairs of the CaymanIslands, whereby the Government will be borrowing $55 millionto balance this year's budget and facing severe cash flow problemslike most private enterprises these days; Government - in a similarscenario of the people of Cayman selling their land to overseasinvestors - must now go to the very banks for which they havecreated a healthy and safe atmosphere to operate, while makingbillions of profits on their world wide transactions, and payhealthy interest rates to make these banks even richer.
On the other hand, there are also other risk scenarios associatedwith any form of lending which cannot be ignored.
However, instead of focusing on borrowing funds only to balancethe budget, Government, as the trump card holders in our respectedworld of finance, could certainly launch a successful bond issueto finance such projects like: a much needed fast tract entryinto the services required for Internet Technology for our financialcentre; a sophisticated programme to develop and maintain tourismgrowth; financing of affordable housing for those below the incomelevel now demanded by the local retail banks; and capital projects,many with a short time line for action such as the land fill whichhas only two more years of usefulness.
This country has every right to become engaged in the very businesses,which they have created ­ such as banking and finance. Afterall, there are already private monopolies, which have been createdby the lawmakers of the past, which profit the investors ­not the public.
The time has now come for the present-day law makers to breakwith this tradition of creating financial self-sufficiency forothers, while not doing the same for the people of these Islands.
Our giant neighbour to the North ­ the United States ­has realised that the only way to encourage its people and otherswho have come to live among them, is to create an atmosphere andtax breaks so that more money will be spent in that economy.
There are no personal gain taxes in the Cayman Islands and manyinvestors among those with $750 billion on deposit will welcomethe opportunity to underwrite and secure the continued successstory of these Blessed Islands by purchasing, if they became available- Cayman Islands Bonds.