By Debra PrendergastCommentary
Our economy is notso healthy
By Debra Prendergast
Howis our economy at present? And what happens now following thepassing of the recent laws in Legislature on Friday, 14 July whichwill continue to contribute to the decline of Cayman's economicgrowth?
These questions, were put young and old Caymanians, across thecommunity during the past week.
The general perception amongst the indigenous population at presentseems to be "something is wrong" as one local shopkeeperso avidly put it. "The economy is not as vibrant as peopleseem to think it is." He continued "people really haveto be so careful these days how they spend their money becausethis country has become so expensive that people are finding itdifficult to just survive from day to day."
This seems to be the consensus of the majority of folks canvassed.Throughout the community, people are now opening up feelings.One comment often made is "Is the prosperity of these islandsreally being experienced across the board?" It is said thatthere does not seem to be that prosperity is trickling down tothose masses.
What are their feelings towards their future? Shopkeepers aresaying that in comparison to last year "we see an increasein the number of customers, but there is a definite decrease inthe amount of spending, people are spending less."
Another prime indicator that things are changing is reflectedin the figures for Governments largest revenue earner. Collectionson Customs Duty for the year 2000 January through July, by a monthby month breakdown - when in compared to 1999, shows that thereis a marked decline in total revenue collected. One contributingfactor to be taken into consideration is that less Caymanian familiesseem to be traveling abroad, and the reason given is, "wesimply cannot afford the overseas shopping trips anymore ... itis a luxury we can no longer afford."
The Cayman Islands Statistics office which records the ConsumerPrice Index (CPI) indicates that "the overall consumer priceindex increased by 4.1% in the first quarter of the year 2000from last year." The CPI indicates that " there wereincreases in five of the eight major groups in comparison to thesame period for last year".
Those groups are: (a) Education and Medical - with the largestincrease of 22.4% which was reflective of higher school fees inboth the private and public sectors; (b) Housing which showeda 6.5% increase in areas such as rising interest rates on mortgages,cost of rent and utilities; and (c) Transport and Communicationswith a 3.2% increase.
The Food and household equipment group showed only nominal increaseswith a 0.9% and 0.8 % increase respectively. There were only threemajor groups showing declines of 2.0% or less. They were personalgoods and services, alcohol and tobacco, and clothing.
What exactly then does this mean to the ordinary people on thestreet? From reports, it appears that the same development istaking place all over the world - and it is expected that thecost of living will continue to rise.
However, what the public is saying is we live in an infrastructurethat does not support itself, whereby very little is producedlocally and everything has to be imported - which leaves us totallydependent and at the mercy of the outside world. Yet, on the otherhand there are certain matters which we should have some controlover, to avoid the continuing escalation of the cost of living.
It has been suggested that a regulatory board should be establishedto set price controls and limit price increases in basic areaslike the price of food items, electricity, water telephone servicesand another areas of concern - such as the rise in bank interestinsurance rates.
The public's concern is that it is no longer a matter of maintaininga certain lifestyle, but rather a daily feat to survive, whilemeeting basic recurring monthly expenses. Some families cannotmeet their basic living expenses aside from maintaining a mortgageand at present are working more than two jobs to make ends meet.They complain that they have no time to spend with their familyand they are losing control of their children.
Many reflect on the past when at least one parent could be athome at the end of the day when their children came out of schoolto help them with their homework. They remark: "what is theprice of this prosperity" and feel that, although these islandsclaim to enjoy one of the highest standards of living in comparisonto our neighboring islands, this is not the case for the majorityof Caymanian families.
There is widespread concern that one of our most important industriesthe "tourism industry" is experiencing an obvious decline.Specifically, amongst the local taxi-drivers they indicate that"things have changed since last year ... we are suffering"states on taxi driver. She indicates that they are receiving fewercalls, seeing fewer tourists, less money and "even on cruiseship days nothing much is going on." She continued by saying,"many of the tourists have told me they will not be comingback to Cayman because it is far too expensive. Usually when Ipick them up, they are looking for someplace inexpensive to eat".
There has also been a decrease in the number of bookings for hotelrooms and some employees feel this might be attributed to an increasein the number of timeshares.
Another common concern seems to be that since the United Statesrecently lifted it's embargo with Cuba, the tourist will opt tovacation there rather than come to Cayman which "has priceditself out of the market."
It is also generally felt that the entire financial industry hasbeen shaken and will eventually see a rapid decline, thereby crampingthe lifestyles, to which Caymanians have become accustomed to.
Although there has been an increase in real estate and propertysales, the public's perception hold that some of the owners aredivesting their holdings in anticipation of a decrease in propertyvalues and the price of hotel and condominium rooms.
Whatever the reasons for all of these changes the consensus seemsto be that by this time next year, there will be an appreciabledecline on all areas of the growth experienced over the past decade.
Meanwhile, because of the difficulty of making ends meet, thequestion continues to be posed: What is the state of the economy?It is either no one really knows or is prepared to say.
What is evident, however, is that those who are placed in thepositions of authority and control of determining the future ofthe people of these islands - can no longer afford to ignore thefact that there is a growing problem, in respect of a slowingdown of our normally robust economy.
Falsely assuring the people that there is nothing to be concernedabout because certainly "where there is smoke there mustbe fire" and "those who feel it ... know it."