LEGISLATIVE LUNCHEON ADDRESS delivered by Chamber President Kyle Broadhurst on Thursday, 18th January 2018 at the Kimpton Seafire Resort and Spa.
Good afternoon, members and special guests. Protocol has already been established, but I would like to specifically recognise Her Excellency the Governor, Helen Kilpatrick who is attending what will be her final Legislative Luncheon. As many of you know, Governor Kilpatrick will be leaving us in March after serving for more than four years. On behalf of the membership, I would like to be among the first to thank you for your distinguished service to the business community and the people of the Cayman Islands, and I wish you and your family the very best for the future. 1
At this time, I would like to invite you to the stage to receive a small token of our appreciation for your dedicated service. (PRESENT GOVERNOR WITH GIFT) This luncheon is well timed as it allows us to briefly reflect upon the last year and to look forward to what we would like to achieve this year. Looking back on 2017, it was an eventful year both globally and locally. It was a strong year for Cayman with our Islands continuing to show continued economic growth. Our tourism industry has performed well with strong numbers last year that have continued this year. Numerous constructions projects have been commenced (and many more are in planning) which evidence considerable confidence in the Cayman Islands both domestically and internationally. 2
Our new Government was elected last year. It produced a strategic policy statement in which it has set out various objectives some of which I will discuss in a moment. At the Chamber we have been busy introducing several new initiatives and programmes some of which you would already be aware of, like the Business Excellence Awards and Growth Matters Campaign. Another initiative that you may not yet be aware of is the Chamber’s three-year Advocacy Agenda and Action Plan. Subsequent to completing the candidate forums (which feels like a lifetime ago now!), the Chamber began work on developing its Advocacy Agenda and Action Plan. The plan outlines the key areas of focus for our work, and the actions we will be taking to implement positive change. It is a living document that can be adapted in accordance with arising issues within the community. 3
The four key areas of focus detailed in the Plan are: • Education, Employment & Workforce Development • Economic Growth & Diversification • Regulatory Efficiencies • Community Development These areas of focus line up neatly with Government’s Strategic Policy Statement and the approved two-year budget. Many of the goals are similar, and I believe that, by working together, we can achieve these goals successfully. For the next few minutes, I would like to speak to you about the first stated goal in the Government’s Strategic Policy Statement – a strong economy to assist families and businesses. While we currently enjoy a strong economy, it is not something we can take for granted and it is something that we need to continue to work on and develop. 4
To accomplish the goal of maintaining our economy for the benefit of all we also need to tackle several other issues which are raised in both the Strategic Policy Statement and the Chamber’s Advocacy plan. Let me start with perhaps one of the most obvious. Economic growth. Last year the Chamber ran a campaign explaining what economic growth is, how it works in Cayman, and what is necessary for it to continue. The purpose of that campaign was to create a greater understanding as to how we have come to be where we are and to bring about a dialogue about where we want to go. Those videos were extremely successful with tens of thousands of views here locally and internationally. As made clear in those videos, economic growth is completely dependent upon an effective collaboration between the public and private sector. That partnership has been in place here in Cayman for 5
a long time. Through great foresight we have benefited from favourable legislation and government policies that have allowed the private sector to grow and create wealth. That success has allowed Cayman to distinguish itself from its neighbours and provides us with the high standard of living that we enjoy. Unfortunately, however, past success does not guarantee future performance. There are both external and internal threats which, if not met, will threaten Cayman’s success. Externally, we need to make sure we remain not just competitive but a leader. There are numerous other jurisdictions which would like to recreate what we have created or simply take it from us. We are competing with those jurisdictions every day and that competition will never cease.
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Internally, we must ensure that the success that we achieve is benefiting all. If it is not, then internal pressures will develop for policies and legislation which are less business friendly and which may impact our industries abilities to compete on the global stage. Unfortunately, as capital has no allegiance to a flag, this can mean a reduction in business and thus revenue. We accordingly could fall into a dangerous cycle whereby in an effort to divide the pie we end up reducing it. So what to do? Well I am pleased to report that in this respect the Government and the Chamber are largely aligned. In the Strategic Policy Statement the Government has confirmed that it wants to achieve the following outcomes: increase support to Cayman Finance, implement a new National Tourism Plan, develop and implement sector-based plans to diversify the Cayman economy, and 7
to develop and implement area-based plans that support economic growth across Grand Cayman and the Sister Islands and complete a new National Development Plan. The Chamber agrees with these outcomes. We need to achieve all of this plus many more of the stated objectives in the Strategic Policy Statement. In the view of the Chamber the only way that this can all be accomplished is through the creation of an Economic Development Plan. We need to accept that in the absence of an actual framework which is put in place with the private sector and the Government we are likely to remain reactive as opposed to proactive. It was proactive steps that allowed Cayman to establish itself as a key offshore financial centre. It is that same proactive thinking that will allow us to continue to succeed and to accomplish more. 8
Now before I go further, let me say that I am not in any way suggesting that we should create a plan for the sake of creating yet another plan. Rightly or wrongly, historically there have been numerous initiatives, studies and plans that have resulted in little ultimate utility. Accordingly, if we are to embark upon this path, which I believe we must, we first must collectively agree, both private sector and government that we need a coordinated strategy and plan which will allow us to collectively tackle the issues we face. I think we are there, but if we are not, then this discussion needs to be had. Once we accept that we need the plan, we also need to commit to the fact that once the plan is created it will be implemented. It would be a colossal waste of time and energy to create the plan and then let it gather dust. 9
To make sure that this does not occur we have to ensure that nothing is included in the plan that the private sector and the Government are not committed to completing. There is a great deal more that could be said about the way forward to develop an Economic Development Plan but I think at this stage, the only decision that really needs to be made is whether we are all collectively committed to creating such a plan. I know the Chamber and its members stand ready to work with Government on this project. I hope that the Government agrees that it is a project worth pursuing. It is a monumental task but one that will pay dividends for our future generations. I would like to change gears slightly and address another topic which would also need to form a fundamental aspect of any successful
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Economic Development Plan: Education and Work Force Development. A year ago, when I gave my first speech as President I highlighted education as being one of the fundamental focus areas of the Chamber. Throughout the subsequent election cycle it was a focal point for discussion and it remains so today. The reason for that is simple, almost everything we want to accomplish is related to our people having the requisite education and skills. An educated and skilled workforce is an asset that benefits us all. Effectively a strong sail to power our vessel. Without those skills we have people unable to participate in the local economy which leads to frustration and other societal issues; an anchor. Even with world class education and workforce development (which in my view is what we should be striving for) we need to recognise, 11
however, that we continue to require foreign labour to allow Cayman’s economy to continue. We are lucky to have a sophisticated economy which demands highly skilled and educated individuals. We are also one of the top global tourist destinations. These two pillars of our economy along with the necessary supporting infrastructure creates a demand for labour that well exceeds the working population of these islands. This would be true even if every single Caymanian was employed. I know that everyone in this room knows this. I say it, however, as we must ensure that we have an honest dialogue about employment in this country. The Government has confirmed a commitment to developing a new human resources department. I believe that it is common ground that there is dissatisfaction on all fronts with the current system. Business 12
needs certainty in order to be able to be successful (and hopefully grow). Arbitrary decisions, or unclear requirements or policies, creates uncertainty and makes it harder for businesses to compete. At the same time, there are complaints that Caymanians are not being provided opportunities for employment and/or to advance. Both sides want these matters addressed. To do this, I believe three things need to occur: 1) We need to ensure that we are working from facts. There is a tendency when this topic arises for a great deal of anecdotal evidence to be relied upon. While, it cannot be ignored, we cannot be making critical decisions based on such evidence. If we do we end up simply creating new problems.
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Statistics analysis also does not offer much assistance given the relative small numbers involved. Whether the unemployment rate is 3% or 5% does not assist us to determine what changes are necessary if we do not first understand what underlies those numbers. Given that we are speaking about less than 1,500 unemployed people, I believe it is time for us to address this on an individual basis and learn specifically what barriers to employment are being faced by those individuals.
This will allow us to better understand what changes may assist those that are having difficulty finding employment. It will also let us better understand the size of the problem as it must be the case (as it is with the rest of the world) that some persons, regardless of any change that is made, are either not able or not willing to be employed. 14
Effectively, we can take the mystery out of these issues and we can ensure that we are not fighting ghosts and instead focus on making changes that will address unemployment.
2) We need to make sure we have an achievable goal. We are in the fortunate and unique position of having many more jobs than working age Caymanians. We need additional labour exceeding 20,000 people in order to fill that gap. In light of this disparity the goal of the system must be to ensure that we are able to find a job for every Caymanian ready and willing to work. To do that we need a system that protects Caymanians from discrimination, ensures Caymanians have access to job opportunities when they arise, and ensures that we
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are taking the necessary steps so that skills and education of Caymanians align with the needs of the private sector employers. Even if we accomplish that goal, however, we will remain reliant upon foreign labour. We accordingly cannot fall into the trap of thinking that instead of having a “job for every Caymanian” that we must have a “Caymanian in every job”. As you are all aware the math doesn’t work and it’s not possible. In addition, our need for foreign labour has allowed us to attract the best and the brightest in the world and that is one of the things that has allowed Cayman to achieve the success that it now enjoys. 3) We need to work collaboratively. At this time, there has been limited private sector involvement in this initiative. Given that the private sector supports change and it is the private sector which will be asked to adhere to and implement new policies and 16
procedures it cannot be that a new system is implemented without consultation. To do so runs the risk of simply creating new problems and uncertainty. There needs to be an open and frank dialogue to ensure that the changes are proportionate and effective. I appreciate that the Government may not yet be in a position to present the new proposed system to the private sector for discussion, but I would invite the Government to confirm its commitment that such dialogue will occur in the near future and well prior to implementation.
When considering what steps to take it is important that we remain aware that there must be a balance. We cannot have a situation where businesses are not able to obtain the labour they need. We, however,
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must also ensure that Caymanians are being given the opportunities they deserve. It is perhaps notable, that in the Bahamas they have recently introduced the Commercial Enterprises Bill which is intended to make it easier for foreign companies to set up there and to allow for work permits to be obtained. When asked about the Bill the Labour Minister Dion Foukles stated as follows:
“We are losing a lot of business to other jurisdictions, such as the Cayman Islands, for example, because of their ease of doing business and the rate at which they turn around applications,” Foulkes was quoted as saying, “whether it’s business licences [or] work permits. We are determined to … be the major player, as we have been, in the financial services industry.”
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The quote makes clear that they regard themselves to be in competition with us. We must acknowledge that and ensure that in making changes, which we all accept must be made, we do not lose the attributes which have allowed us to succeed. While having an effective system for addressing the workforce is important there are other ways to also ensure that Caymanians are given the opportunity to participate in our growing economy. I touched on the importance of education previously and this is a cornerstone. We need to ensure that our young students are obtaining the support they need to be able to reach their full potential. The Chamber is supportive of ensuring that early intervention for numeracy and literacy is continued and expanded in our schools. We also need to ensure that our students have a clear and understandable path for obtaining the necessary training to embark upon different career paths. 19
To help address these and other issues the Chamber is establishing its Education and Workforce Development Subcommittee which will be focused on finding ways to assist Government in its ongoing efforts in these areas. Another way to allow better participation is to assist Caymanians to become business owners. The Chamber Membership is overwhelmingly made up of small businesses and we want to see more of these businesses in Cayman. To help make that happen, the Chamber will be introducing a small business centre aimed at providing the support and services necessary for these businesses to develop, grow and prosper. More information will become available about that initiative in the coming months. In 2016, the Chamber developed a new vision – That the Chamber will be a catalyst for positive change, connecting community, business and 20
government. While what I have said so far is in keeping with that vision I would like to close by focusing on two community issues. We enjoy one of the finest places to live in the world. We want to keep it that way and see it improve. One of the ways that we can do that is to constantly work to ensure that we have a clean and safe environment. To help accomplish this the Chamber will shortly be introducing a new anti-littering campaign. Unfortunately, littering and dumping are far too common and it is time we bring it to an end. All of us that live here need to take pride in our environment and the new campaign will aim to help us do just that. I don’t want to steal the thunder away from the campaign before it is even introduced as it is an exciting one so I won’t say any more. However, I know that the Chamber can rely on you our members to support this campaign when it is introduced. 21
The Chamber will also be working with the police to help them continue to keep these Islands safe. In the coming months you can expect to hear from the Chamber with respect to its goal of improving and increasing neighborhood watch programmes and other initiatives aimed at combating crime. I would encourage you our members to partner with us in assisting the police. We need to recognise that they perform a difficult and critical job with little thanks, we need to do everything we can to support them. To close I would like to thank the Premier and other representatives of Government for attending this luncheon. It is through the close collaboration between the Government and the Private Sector we have been able to accomplish great things. It is also, only through that collaboration, that we will continue to succeed.
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I would also like to thank our members for supporting this event and making it possible. It has indeed been a privilege to represent you for the last year. While my term has come to an end, the Chamber will be in strong hands with Mr. Paul Byles taking over as President. He will be continuing the work of the Chamber as set out in our Advocacy Agenda and Action Plan and accordingly you can expect that the Chamber will continue to support, promote and protect your interests and those of the greater community.
Thank you.
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