Cayman Islands

Politics:

• Analysis

  Cayman Islands politics: Quick View - Premier sacked following no confidenc

  Event

  One week after the release on bail of the premier of the Cayman Islands, McKeeva Bush, the governor of the British Overseas Territory chose to remove him from power on December 19th. The deputy premier, Juliana O'Connor-Connolly, has been appointed to the premiership.

  Analysis,

  The UK governor, Duncan Taylor, announced his decision to evict Mr Bush following a vote of no-confidence in the government of the embattled premier by the Legislative Assembly. The motion was passed by 11 votes to three on December 18th, with Mr Bush abstaining. He had sought to remain in his position and suggested to the governor that only the Legislative Assembly should be dissolved. In a clear sign of lack of confidence, the governor chose instead to keep the Assembly and ask the deputy premier to form a new government. The majority of lawmakers for the ruling United Democratic Party (UDP) are thought to have supported the move. All existing ministers have resigned in consequence and a new cabinet will be appointed. It remains unclear if elections, due in mid-2013, will now be brought forward.

  Mr Bush is the subject of three police investigations concerning influence-peddling, financial irregularities and a land deal. In a statement, Cayman Finance, which promotes the territory's financial services industry, sought to distance the sector from events. The Chairman of Cayman Finance, Richard Coles, stressed that the financial services industry operates independently of the political arm of the Legislature and any potential criminal charges against an individual do not have an impact on the ongoing effective functioning of the government or the Cayman Islands Monetary Authority.

  December 20, 2012

• Background

  Cayman Islands: Key figures

  Kurt Tibbetts

  Kurt Tibbetts has been leader of government business since 2005, having previously held the post between November 2000 and November 2001. A founder member of the People's Progressive Movement (PPM), Mr Tibbetts has represented the district of George Town in the Legislative Assembly since 1992.

  McKeeva Bush

  McKeeva Bush is the leader of the opposition United Democratic Party (UDP), of which he is a founding member. He was leader of government business from November 2001 until May 2005. Mr Bush has represented the West Bay constituency since 1984, making him the longest-serving member of the Legislative Assembly.

  September 08, 2008

• Structure

  Cayman Islands: Political structure

  Official name

  Cayman Islands

  Form of state

  Representative government; UK Overseas Territory

  Head of state

  Queen Elizabeth II, represented by a governor

  The executive

  A nine-member Executive Council, headed by the governor, with three ex officio members: the attorney-general, the financial secretary and the chief secretary; and five members elected by the Legislative Assembly

  Legislature

  Unicameral 15-member Legislative Assembly elected for four-year terms. Following the adoption of a new constitution in November 2009, the number of seats in the Legislative Assembly will increase to 18 in the 2013 election.

  Legal system

  Juvenile Court, Summary Court and a Grand Court of the Islands; appeals from the Grand Court proceed to the Court of Appeal

  Elections

  May 20th 2009; next election due May 2013

  Main political organisations

  The governing United Democratic Party (UDP), headed by McKeeva Bush, and the opposition People's Progressive Movement (PPM), headed by Alden McLaughlin

  Governor: Duncan Taylor

  Executive Council

  Premier: McKeeva Bush

  Cabinet secretary: Orrett Connor

  Key ministers

  Deputy premier, community affairs & housing: Mike Adam

  District administration, works & gender affairs: Julianna O'Connor-Connolly

  Education, training & employment: Rolston Anglin

  Finance, development & tourism: McKeeva Bush

  Health, environment, youth, sports & culture: Mark Scotland

  Internal & external affairs: Franz Manderson

  Legal affairs: Samuel Bulgin

  Head of the Cayman Islands monetary authority

  George McCarthy

  December 05, 2012

Economy:

• Background

  Cayman Islands: Population

  Population estimates
  	2002	2003	2004	2005	2006
  Total (year-end)	43,004	44,144	36,340	52,465	53,172
  % change, year on year	2.6	2.7	-17.7	44.4	1.3
  Source: The Economics and Statistics Office.

  Download text file (csv format)

  • Most of the population lives on Grand Cayman. The population at the last census, taken in 1999, was 39,410, of whom 53% were Caymanian. The government estimated the population at 53,172 in 2006. The number of non-Caymanians increased rapidly in the 1990s, from about 33% of the total in 1989. Many are short-term contract workers. About 95% of the population lives on Grand Cayman, the site of the capital, George Town. An estimated 25% of the population is of African descent, 20% is European and the remainder of mixed race. There was a sharp fall in the population in 2004 as a result of the destruction wrought by Hurricane Ivan; population growth of 44.4% in 2005 was owing to the return of those displaced and the arrival of new reconstruction-related migrant workers.

  September 08, 2008

• Structure

  Cayman Islands: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011b	2012b
  GDP at market prices (CI$ m)	2,883.2	2,715.8	2,626.6	2,669.7	2,740.9
  GDP (US$ m)	3,473.7	3,272.0	3,164.5	3,216.5	3,302.3
  Real GDP growth (%)	-0.8	-7.9	-4.0	1.1	1.8
  Consumer price inflation (av; %)	3.9	-1.3	0.3	1.9a	1.2
  Population ('000)	55.3	55.8	56.2	56.7	57.2
  Exports of goods fob (US$ m)	34.2	46.6	40.7	40.5	42.6
  Imports of goods fob (US$ m)	-947.6	-793.3	-745.3	-851.7	-796.8
  Current-account balance (US$ m)	-537.2	-506.1	-491.8	-511.7	-503.2
  Exchange rate (av) CI$:US$	0.83	0.83	0.83	0.83a	0.83
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Download text file (csv format)

  December 05, 2012

• Outlook

  Cayman Islands: Country outlook

  Cayman Islands: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: A referendum is planned for July, proposing changes to the Cayman Islands' voting system regarding election of legislative assembly representatives. A Memorandum of Understanding (MoU) has been signed to improve the oversight of regulated entities that operate across national borders. A private-sector pensions reform bill was presented in May for public consultation, the first major revision since their inception in 1998. The economy showed signs of recovery in the first three quarters of 2011 with GDP growth of 1.2% year on year. A tax-exempt special economic zone (SEZ) is being developed in the hopes of attracting knowledge-based enterprises.

  DOMESTIC POLITICS: On July 18th Caymanians will vote in a referendum on whether to change the voting system to a constituency model with one legislative assembly representative per constituency, as opposed to the current model where several members may be elected from each electoral macro-district. The current system means voters in more densely populated areas elect several representatives. The change would more closely match the number of legislative representatives to an area's population and geographical location, and improve democratic representation by better reflecting voter intentions where voting preferences are mixed. The referendum was mandated following the adoption of a new constitution in 2009 that will expand the number of elected representatives to 18-from 15 currently-at the next general election, due to be held on May 22nd 2013. However, the government of the premier, McKeeva Bush, has campaigned vigorously against voting system reform. More fragmented voting could make it harder for a government to win a working majority. The change could also increase the chances that independent or local single-issue campaign candidates win seats, weakening the grip of the two main political parties, the ruling centre-right United Democratic Party and the opposition social-democratic People's Progressive Movement. However, a majority of ballots (50% plus one vote) will be needed for the referendum proposal to pass. As abstentions will be counted as a "no" vote only those intending to vote "yes" are likely to attend the ballot. This has led to fears of possible intimidation and reprisals by the government against those working in the civil and public services.

  INTERNATIONAL RELATIONS: The US Securities and Exchange Commission (SEC) has signed an MoU with the Cayman Islands Monetary Authority (CIMA, the financial services regulator) as part of its long-term strategy to improve the oversight of regulated entities that operate across national borders. The SEC's supervisory co-operation arrangement is meant to enhance its ability to share information about regulated entities, such as investment advisers, investment fund managers, broker-dealers and credit rating agencies. The MoU establishes mechanisms for continuous and ongoing consultation, co-operation and the exchange of supervisory information related to the oversight of globally active firms and markets. The SEC attaches particular importance to the Cayman Islands as a major offshore financial centre and home to large numbers of hedge funds, investment advisers and investment managers that frequently access the US market.

  POLICY TRENDS: The Cayman Islands government put forward a pensions reform bill for public consultation on May 28th. The National Pensions Bill 2012 is the first major revision of private-sector pension rules since they were first created in 1998. According to the government, the main objectives of the new bill are: to enhance the process whereby pension contributions are monitored and enforced; improve the regulation of pension plans and pension administrators; and encourage pension contribution compliance, in order to enhance pension savings and reduce the potential future fiscal burden on the government. Together with the establishment of a new Department of Labour and Pensions and planned amendments to the Labour Law, the government has proposed new arrangements for the regulation of pensions by CIMA. Other key changes arising from the bill include an increase in the retirement age, new and enhanced mechanisms to improve compliance, provisions for additional voluntary contributions to supplement pensions and better information on pension plan performance.

  ECONOMIC GROWTH: The Economics and Statistics Office of the Cayman Islands has reported that the economy showed signs of recovery in the first nine months of 2011, with GDP growth of 1.2% year on year, compared with a contraction of 5.8% in the year-earlier period. Growth has been led by the improved performance of the hotels and restaurants segment and the real estate, renting and business services segment, which grew by an estimated 7.5% and 3.4% respectively. However, the mainstay financial services sector continued to suffer from mixed results. Banking deposits at the end of September 2011 fell by 2% year on year to US$5.2trn. As of September 2011, the total number of licensed bank and trust companies stood at 250, an annual fall of 4.6%. The insurance sector saw the number of captive insurers falling marginally over the period, although income from premiums rose to US$2.1bn. The number of mutual funds fell by 1.7% year on year. Despite the still-weak economic performance, the government was successful in significantly reducing the public-sector deficit. Revenue increased by 7% over the period while expenditure increased at a lesser rate of 4% (and capital expenditure fell significantly), narrowing the fiscal deficit from US$61m in the first nine months of 2010 to US$17m in the same period of 2011.

  EXTERNAL ACCOUNT: In his last full year in office Mr Bush is pushing ahead with the development of a tax-exempt SEZ known as Cayman Enterprise City (CEC). A law on SEZs to facilitate the development was passed by the Cayman Islands legislative assembly in September 2011. Investors located in the zone will benefit from tax exempt status for all income, corporations and capital gains taxes. The CEC is aimed at attracting knowledge-based enterprises in six broad areas: Internet services, biotechnology, media, commodities, education and outsourcing. Manufacturing and engineering activities have been expressly excluded from the CEC's remit and companies licensed to operate in the zone will also be prohibited from trading within the Cayman Islands. A driving force behind the development of the CEC is a property development firm, Hon Development. The project's infrastructure is due to be constructed in three phases, with 500,000 sq ft of built area available for leasing by 2016. In the meantime, companies will be permitted to operate from independent premises on an interim basis. The government is keenly aware that other Caribbean jurisdictions such as Barbados are considering similar plans, and hopes to begin attracting companies before physical infrastructure is put in place.

  June 11, 2012

View detailed map

Country Briefing

Land area

264 sq km; Grand Cayman 197 sq km

Population

54,379 (October 2010, official census)

Main islands

Population census, 2010

Grand Cayman: 52,120

Cayman Brac: 2,162

Little Cayman: 115

Climate

Sub-tropical

Weather in George Town

Hottest months, July-August, 24-30°C; coldest months, January-February, 18-24°C (average daily minimum and maximum); average monthly rainfall, 119 mm

Language

English

Measures

Imperial system

Currency

Cayman Island dollar (CI$) = 100 cents. The exchange rate is pegged at CI$0.83:US$1

Time

5 hours behind GMT

Public holidays

January 1st, Ash Wednesday, Good Friday, Easter Monday, mid-May (Discovery Day), third Monday in June (Sovereign's official birthday), early July (Constitution Day), November 11th, December 25th-26th

March 12, 2012