LoGB Statements from Briefing
The Hon. McKeeva Bush, OBE, JP
Leader of Government Business (and Premier Designate),
and Minister of Financial Services, Tourism & Development
Press Briefing, Friday, 17 July 2009
Mr. Bush shared statements on the following: the status of tax information agreements, the CIDB stimulus programme, providing more information on-line on hedge funds registered in Cayman, re-naming Pirates Week, a report from the Ministry of Community Affairs and Housing including details on the West Bay Golden Age Home, and the Youth Services and summer camps. (The LoGB also announced the members of the boards for Cayman Airways, the Port Authority, CIDB, and the Airports Authority. These are available on www.gov.ky; see Public Bodies on the home page.)
Status of TIAs
As some of you will be aware I recently led a delegation to the Netherlands to sign another Tax Information Exchange Agreement. The agreement was signed on July 8th. The Cayman Islands now has 11 such bilateral agreements in place. It is my intention to secure the 12th agreement in short order so that the Cayman Islands can be removed from the OECD Grey List.
I realise there are some concerns being aired regarding the possibility of the OECD moving the goal post so to speak or that the stated number of 12 agreements may be changed. However based on the discussions I have had with OECD officials, this is highly unlikely.
It is my view that we should continue to focus positively on what we are trying to achieve and I am confident that as we continue to demonstrate our commitment with action as we have been for the past four weeks, this is being recognized by the OECD in a fair and consistent manner.
The new Negotiation Team which was established by myself shortly after being elected to office, has been working tremendously hard at securing the necessary technical agreements and I commend the Team for staying focused on the job and moving things quickly along for the benefit of our financial services industry.
Indeed we have reached the advanced stages of negotiation with several countries, including Italy, Mexico, Germany, France, Australia, New Zealand, Portugal and Canada.
Having agreements at the "technical level" means that we have concluded negotiations and senior representatives from both countries have signed off on the text. Each country will go through the necessary steps to obtain approval at the ministerial/cabinet level after which the official signing will be arranged. The length of time it takes to sign officially will vary from country to country depending on their unique legislative and approval processes. Based on our discussion with the various countries, we estimate that in most cases, the Cayman Islands will be able to sign official agreements with the above countries by September at the latest.
I also plan to lead a delegation to the OECD Global Forum on Transparency and Exchange of Information which is being held in Mexico in September of this year.
Our attendance at this meeting will enable the Cayman Islands to have as seat and a voice at the table during the important discussions on the status of the OECD transparency initiative generally and what type of framework may be put in place to monitor the process of implementation across countries.
It is my strong view that it is best to participate in these initiatives as it gives us not only full insight into what is being planned and discussed, but also an opportunity to provide our own direct input into a process which will inevitably affect us in the future.
This government remains committed to ensuring that we protect both the commercial success of our industry while maintaining our good reputation as a well regulated and cooperative jurisdiction.
CIDB Stimulus Programme
I now wish to provide an update on some developments at the CIDB which as many of you are aware is playing an important role with the recently launched stimulus and relief programme to assist small businesses and individuals in serious financial distress.
To date the CIDB has received an overwhelming response in terms of the number of persons who have contacted the bank for possible assistance. The CIDB has reported that they have received more than 108 requests for interviews to look into possible assistance.
Of those, the CIDB has already carried out 48 interviews. Roughly 50% of those who have been interviewed have qualified for the stimulus as outlined in the programme which covers several areas (mortgage arrears, working capital for businesses, debt consolidation, hurricane shutters and insurance).
I have been informed that roughly half of those who have been interviewed have already received loan approval. The CIDB has approved 21 loans totalling 800 thousand dollars. The CIDB and its staff are working hard to address the many requests for assistance and I commend them for dealing effectively with this short term programme while continuing to service their regular banking clients.
They have put in place additional resources to increase the turn around time on the applications. Another development at the CIDB concerns our recent ability to arrange refinancing for some of the CIDB's existing loans.
When this Government came into office, the CIDB had 36 million in debt. This debt is the source of funding for the CIDB's loans. I am pleased to announce today that as a result of discussions with HSBC and our efforts to work closely with local institutions, the CIDB has secured a new temporary facility which will enable us to refinance 27 million of this outstanding debt at a significantly lower interest rate. Based on current market rates we will be paying an interest rate of 2.79% on this outstanding debt instead of the previous 6%. This will save the CIDB over 300 thousand dollars for the balance of this year alone in interest expense.
Ladies and gentlemen, this is what can be achieved with cooperation with local financial institutions. I must commend the new board and in particular, the new Chairman, for his hard work and dedication to moving quickly to improve the financial viability of the CIDB and presenting innovative solutions towards that end.
My Government will continue to look at solutions in other areas and in particular for the current outstanding debt of the central government to ensure that we reduce the financial burden and put in place a stable financial situation to support the local economy.
I hope that towards the end of the year the Government will have secured the necessary refinancing solutions and at that stage the plan is to include the current CIDB borrowing into those plans.
As I have said before, we cannot fix the existing financial situation as quickly as we would like, but we will not stop until we have addressed the current very serious financial situation that the government is in. It is my belief that the Government must lead the way in sorting out its own situation and this will then give the private sector the necessary confidence to continue investing in this great country.
Hedge Fund Proposal
I have been asked on a few occasions whether, as Minister with responsibility for Financial Services, I have a position on the issue of the now Hedge Fund proposal and would like to make a brief statement at this stage.
I understand that there are some discussions regarding the possibility of CIMA publishing data on the internet or by direct electronic access to their database, concerning the hedge fund private placements registered in Cayman. I also understand that if a decision is made to go ahead this information will likely be available to the general public.
It is important for us to research carefully the pros and cons of this proposal to ensure that we meet any regulatory concerns while maintaining a competitive hedge funds industry at this crucial economic time.
And I trust that the regulatory bodies and the industry will work together as usual to strike the right balance on this issue.
My personal view on the matter is that in these economic times with increased competition in the offshore market, it may not be in our best interest to introduce this change given that it is not something that is being implemented in competing jurisdictions. Furthermore, as far as I am aware, there are no concerns or initiatives emanating from international standard setting bodies, which specifically focus on this issue. We should therefore carefully consider the merits of the proposed change.
At the same time, it is important for me to add that these are only my personal views because ultimately it is the purview of the board of the Monetary Authority, as an independent regulatory body, to consider the merits of such a proposal. However I felt that as the Minister with responsibility for the general development of the financial services industry, it was important for me to make this brief statement on this topical issue.
Pirates Week Name Change
Since announcing my decision to rename Pirates Week, there have been many questions about my motives for doing so. And while our Christian heritage did play a role in it, there were other factors that played an even larger part.
As many of you know, since taking office I have been in and out of meetings with various heads of state across Europe and the Nordic countries. And in that short time I have been asked about Cayman's connection to piracy - a behaviour that has no current relation to us.
While Hollywood may have made piracy into family entertainment through the recent success of its Pirates of the Caribbean franchise, piracy is not just associated with entertainment or activities of the past. It's still a very real threat today.
In early April international news networks carried reports of the US military negotiating the release of Richard Phillips -- captain of an American merchant vessel -- off the coast of Africa. And just yesterday 14 Indian seamen, held hostage by Somali pirates, were freed by a joint military effort by the French and Indian navies. The list of ships and their crews that have been held hostage by Somali pirates is extensive.
Furthermore, we are all too aware that even with one of the most robust financial regulatory frameworks -- which incorporates both international standards of supervision and cooperation with overseas regulatory authorities -- our reputation as an offshore jurisdiction, among some influencers in North America and Europe, remains unjustifiably tainted.
For us, the image of piracy -- or theft, or hijacking, as it is also called -- is not one that we can afford to embrace at this time. I think it's prudent that we do everything in our power to remove any perceptions of, or associations with, piracy from the Cayman Islands.
I understand that Pirates Week means a lot to many residents. And I greatly respect and appreciate the intentions of our National Hero, the late Hon. James (Jim) Manoah Bodden, who implemented the festival as a way of bringing tourists to our shores.
But even while I advocate a name change for the festival and the removal of certain pirate-themed activities, I am not advocating the disposal of the festival itself. It's true that very few visitors and residents enjoy it each year.
I would simply like to see a festival that puts our culture at the forefront. And I believe this is our opportunity to shape this festival into something that represents us culturally, and that reflects our rich maritime heritage.
It is my understanding that many in our community would have welcomed more involvement in the process. I have therefore asked the Tourism Attraction Board, in collaboration with other relevant government agencies, to spearhead a renaming competition. The activities this year will remain the same. Our goal is to implement the new name and renewed festival by November 2010.
While my statement today may not put this matter to rest for everyone, I hope that it has helped to outline the reasons behind the decision.
Yes, my role as Minister of Tourism demands that I champion events that will bring visitors and foreign exchange to our shores. But my role as Leader also demands that I strive to protect that which ensures our very survival.
From the Ministry of Community Affairs and Housing
It's already been publicised that the Minister of Community Affairs and Housing, the Hon. Mike Adam, has been meeting department heads under his portfolio, getting their input in assessing policies, systems and structures. The aim of the Minister and his team is to come to grips with some of our more pressing social needs, and develop sustainable policies to address them.
If Cayman is going to be successful as a global financial and tourism centre - especially in these hard times - we must work hard and together at our social stability. This means creating the environment that supports strong families, and safe communities.
But they say that the sum is greater than its parts, and this is how it should be with government. Minister Adam's department visits have made it abundantly clear in addition to a shared vision and strategy in the ministry, there needs to be a shared vision and strategy in government, across ministries and portfolios. Yes, this will take time to develop, but we are moving toward that goal.
Ladies and gentlemen, there is simply a lot of work to do.
As part of the Minister's review, he has recently visited the West Bay Golden Age Home said.
West Bay Golden Age Home
You may have already seen some statements in the press on the West Bay Golden Age Home.
The Golden Age Home located in West Bay is being renovated to provide increased services and protection to our senior citizens, some of the most vulnerable in our society. It will now be a total of just under 8000 square feet, instead of just over 3,000, as it was originally.
At completion, the Home will have the capacity to accommodate some 20 residents (instead of 9,) and the increased covered space will allow a lot greater interaction between families and loved ones.
The Day Care programme will also be enhanced, which will include extended hours of operation to the elderly residents in the district. This will mean improvement on much needed opportunities for companionship.
Given the nature and use of the Home, it was required that the building be expanded and upgraded to become a first response facility in case of a fire hazard with its own fire suppression/sprinkler system, fire pumps, and stand by generator.
The facility is built to hurricane resistant standards to minimize the likelihood of the residents having to be evacuated from the Home in the event of a minor storm or hurricane.
The elderly residents of the Golden Age Home are temporarily located in a rented residential home in the West Bay area. They continue to be cared for by the professional and caring staff of the Department of Children & Family Services.
I would like to assure the public that proper Hurricane evacuation plans are in place while the residents continue to reside at this temporary site. The home is shuttered and located on an elevation which decreases the level of risk of the residents. However, in the event of an imminent hurricane threat, all residents will be relocated to the John A. Cumber Primary School Hall, an official shelter.
Following the Minister's site visit on July 3, the Project Oversight Team for the Ministry met with the Project Manager and the Contractor on Tuesday 14 July 2009 in order to get a status update on the project. Currently the major tasks outstanding are:
- the required installation of a fire suppression system, i.e. construction of a pump house, installation of a fire pump and sprinkler piping, etc. Once this has been completed the remaining finishing works can be completed;
- the required installation of a stand-by generator.
- the required installation of commercial-grade kitchen appliances and other necessary works.
The oversight team will be convening more frequent meetings with the Project Manager and Contractor in order to provide more timely information to the Ministry, as well to reduce the estimated construction completion timeframe for the project.
A ministry team will continue to monitor the progress of the expansion works and will update the public from time to time.
Youth Services Camps, Summer 2009
The Ministry for Health, Environment, Youth, Sports and Culture recognises the challenge families face in finding positive and productive activities for their children during the summer holidays and, while there is a wide range of camps to choose from, many are simply too expensive.
Therefore, one of the missions of the Ministry is to assist the many young families who may struggle to find affordable, healthy and otherwise wholesome activities for their children over the summer holidays.
The Ministry is working with a number of non-governmental organizations in hosting a series of summer camps; also it is providing financial support to ensure that these camps stay affordable, and in some cases we are even able to offer them for free.
The Ministry is again partnering with the FC International Football Club to offer several football camps across the island, and has made a significant financial contribution to the Cayman Scholastic Football Academy. In addition, the Sports Department is hosting a track and field athletics camp led by National Coach Kenrick Williams and Kareem Streete-Thompson, who recently helped coach our Island Games team. All these camps are free of charge.
We are especially excited about the Youth Services Unit's Sizzling Summer Series. Through this series young teens will receive career guidance and help with the school-to-work transition. There are two other benefits of this programme: It offers summer employment to returning college students and offers campers exposure to such vocations as carpentry, basic mechanical diagnostics and the culinary arts.
This substantial commitment to sports and other summer camps tie in with another Ministry objective: To get our children active and engaged in positive extra-curricular activities.
We believe this endeavour will bear fruit on many levels: Our young talent will be able to develop their sporting and life skills, and it will also encourage children to put their vacation to good use.
A full schedule of summer camps is available from the Ministry or people can call the Sports Department at 949-7082 or the Youth Services Unit at 943-1127.
For further information contact: Susan Watler