Tuesday, June 4, 2013

Election 2013 – changing faces

The other week, 85% of Cayman’s 18,000 eligible voters voted in our first election since 2009. The 18 elected Members of our home-rule Legislative Assembly comprise nine from the spendthrift PPM, three from the wasteful UDP, and six unaffiliated and so-far uncontaminated. We were relieved to get rid of the UDP, but wary of their replacements.

The first thing the new Premier said was, “We will spend more money”. To which the British FCO (Foreign & Commonwealth Office) replied, “Come to London and we’ll talk about it”. Britain has enough of its own national debts without allowing one of its nano-colonies to incur more. Two years ago Britain put a freeze on new borrowings by our local populists; she’s not likely to bend on this issue.

The second thing our new Premier said was, “We will not fire any government workers, no matter how useless”. (Well, I made up the last bit, but it’s a given.) He didn’t assure us he wouldn’t raise taxes and the local cost of living.

Either wage-levels will rise to compensate, or fewer migrants will bother to come here. Fewer migrants would reduce our economic activity, and produce less tax revenue. Already there are 3,000 Caymanians registered as unemployed and refusing to participate in the labour market at current wage-levels.

The third thing the new Premier said was, “We will force the private sector to hire the unemployables”. That would tighten government’s existing stranglehold on the private sector. Already we are burdened with a regiment of Soviet-inspired state commissars who monitor the hiring, firing and promoting of all employees – and even intra-company transfers. Forcing another 3,000 reluctant workers (mostly unskilled) onto private payrolls will make local businesses’ even less efficient than they are now.

At a time when major Western nations’ obsession with offshore tax-havens is at full throttle, it’s open to question whether Cayman can survive another four years of irresponsible fiscal management. Britain imposed a “Framework of Fiscal Responsibility” a couple of years ago, as a desperate last resort, but our local dons will ignore it whenever they can.

The objective of the Framework was to force our local politicians and Civil Servants to balance their annual budgets, reduce their Public Debt, and establish a cash reserve to provide for the unfunded pensions and lifetime medical care of our bloated and rotten Civil Service and its dependents. If the FCO clerks can maintain their focus for long enough, all will be well. If not, not.**

Last month’s election changes nothing. Corruption is endemic, and increased numbers of bureaucrats being paid from the Public Purse to run their families’ private companies won’t change that. The doctrinaire protectionism of ethnic Caymanians will only get stronger and more permanent.

 A mass-grant of citizenships in 2003 released thousands of immigrants from their indentured bondage, while generating bitter and lasting resentment among ethnic Caymanians. Since only ethnics may stand for election and (in general) be appointed to government Boards, the quality of our governance will continue to suffer from the exclusion of long-term immigrants’ experience and expertise.

The Economist magazine last month (28th May edition) quoted me as saying, “The real problem is not sagging revenues but public-sector profligacy”. What I actually told the writer over the phone was, “There is far more money flowing in to government’s coffers than they can sensibly spend. So what they do is piss it away.” Weasel words cannot hide the reality.

** Last September I posted a blog titled “A day late and a dollar short” that deplored the FCO’s Attention Deficit Disorder in respect of its colonial obligations.