Thursday, September 8, 2011

House of Cards (Cayman - a British colony)

Some recent events have thrown serious doubt on Cayman’s future as a serious tax-haven and international financial centre. If the Governor’s assent to the waiving of audited government accounts for the past six years didn’t signal Britain’s intention to let Cayman go its own way, nothing will. The disclosure in a lawsuit that our Monetary Authority was no longer monitoring the behaviour of hedge-fund directors constituted another sign.

The Civil Service’s failure to participate in the Financial Times survey on direct private investment told the world that Britain just doesn’t care any more. The UK’s meek response to all the open contempt shown to the Governor and his superiors recently, puts the matter beyond all reasonable doubt. In years to come, these won’t be remembered as straws in the wind so much as whole forests blowing away before our eyes.

Why might Britain be pulling the plug on Cayman after so many years? Well, maybe the 2003 disclosure of MI6 hanky-panky was the turning point. The EuroBank trial will surely have made MI6 a laughing stock in the international spying fraternity; James Bond it wasn’t. Maybe it destroyed the organisation’s credibility beyond recovery, and it’s time for a new start.

The world has changed a lot since 2003. The American Empire is rampant, now, impatient of obstacles. Cuba and Venezuela are two obstacles to US hegemony in its own hemisphere, and Cayman would be a useful staging-post for military action against them. If only the British could be persuaded to surrender control of Cayman...

Well, maybe they can be. Maybe they already have been. The transfer of power would not be of the Diego Garcia kind; the forced expulsion of a whole native people would be too embarrassing, a second time. Anyway, Cayman has a much higher profile than poor old Diego Garcia had fifty years ago. It would be far easier to quietly yield to the local politicians’ incessant demands to change their Constitution. Remove the UK veto on all legislation, and let the demagogues do their own thing - why not? The revised Constitution could lift Britain’s liability in respect of the local government’s borrowings, and Bob’s your uncle.

Of course without the British guarantees, Cayman’s Offshore industry would fold like a house of cards. Everyone who knows anything about tax-havens knows that. And tourism by itself can’t preserve our prosperity. Ah, but never fear - the Seventh Cavalry is here; or soon will be. In the event, the collapse might not last long at all. Nature abhors a vacuum, science tells us- and so does an empire on the rampage. The CIA would have its feet up on the Governor’s old desk before the ink was dry. Good luck arguing with them about the right of native peoples to self-determination.