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Moxam calls for financial services plan

| 14/10/2014 | 0 Comments

CNS Business(CNS Business): The Chamber of Commerce president said he was surprised that, despite its significance to the local economy, the Cayman Islands Government does not have a strategic plan in place to deal with the financial services sector. At the Chamber’s annual legislative lunch last week, Johan Moxam argued that much more needed to be done to protect the financial industry and encourage its growth. He said Cayman had to find ways for financial services firms to grow their local operations and encourage other financial firms to call the jurisdiction home. The president called for a SWOT analysis of each sub sector of the industry and show how Caymanians will be prepared to improve their participation in what is still the main driving force of Cayman’s economy.

“It is surprising that the primary driver of our economy does not have a written strategic plan for its continued success and growth, particularly in the context that it is becoming increasingly competitive to operate as an international financial services jurisdiction,” Moxam said, as he took aim at government’s failings in a number of areas.

“A strategic plan for the financial services sector should take its place alongside plans for economic development, infrastructure, education, training and workforce development. And these plans cannot sit on a shelf. They require action, delivered with efficiency, and with the expectation of accountability,” the Chamber president stated.

He said feedback from over the years suggests that, at a bare minimum, a plan for the financial services sector should include a SWOT analysis of each sub sector, such as banking, captive insurance, re-insurance, hedge funds, trusts and corporate services, and their support services, such as legal and accounting services.

“This analysis should consider the global factors, competitiveness of other offshore jurisdictions, and the very important domestic policy framework that impacts the sector,” he said. “We would also expect to see a medium term plan spanning at least five years which involves the participation of all of the key stakeholders, such as the government, Cayman Finance and industry groups, and assigns a role to each in the implementation of that plan. The Chamber stands ready to participate in any such initiative.”

Moxam also spoke about the need to for human capital considerations in the plan to demonstrate clearly how Caymanians will be prepared via training and education in order to improve their participation in that industry as employees or entrepreneurs.

“It should also offer a roadmap of the supporting public sector educational strategies and policy environment that will help make that Caymanian participation a reality,” he said. “Those that think the financial services sector is doing well enough or even making too much money simply do not understand how the Cayman economy works and its role on the global stage. We must find a way to encourage more financial services firms to call Cayman home. The direct and indirect benefits are exactly what Cayman needs to grow and support the related industries, such as real estate, commerce and healthcare.”

The Chamber president warned that there had to be an honest discussion with the people to help them understand that developing and promoting the further growth of the financial services sector would result in more jobs for expatriates and population growth. However, Moxam argued that this will ultimately benefit the Caymanian people.

“These private sector revenues become salaries for Caymanian employees. Revenue growth for businesses means more jobs, stable salaries, benefits, training and career opportunities,” he said. “Companies making more money is part and parcel of economic growth. You do not increase the prosperity of a country by frustrating its private sector. You increase prosperity by nurturing it, by unleashing it as a nation’s best source of jobs, income and prosperity.”

The president suggested that if more people understood the importance of a thriving private sector and the opportunities it brings to all, they would understand why it is so important for government to facilitate and support private sector growth.

In his address at the luncheon Moxam advocated for population growth, as he said that to thrive the private sector needed to serve more, not fewer, customers.

“It is no coincidence that during the peak of our economy in 2006-2007, while population, GDP and GDP growth were all higher, unemployment was significantly lower at less than 4%. It is no coincidence that the government had a surplus of more than $50 million per annum, excluding capital expenditure,” he said.

Pointing to the latest Labour Force Survey, Moxam said the local population had fallen by around 1,000 people.

“While some in our society undoubtedly celebrate the loss of a thousand permit holders competing for jobs with Caymanians, there are two sides to every story. The other side of that story is that one thousand fewer residents means Cayman businesses have one thousand fewer customers; Cayman landlords, a thousand fewer tenants; restaurants, a thousand fewer diners, the Cayman government, a thousand fewer people spending money and paying fuel, stamp and import duties,” he stated.

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Category: Finance, Financial Services

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