" noted the key main factors that contributed to Cayman’s success included that "…Cayman is a UK overseas territory, which up until now at least, has provided a sense of security and stability for investors" and that "…the Cayman government has provided a legal and regulatory framework that has allowed the industry to develop and maintain itself…".The renaissance of the Cayman Islands was hailed to have occurred in the 1970s when the sleepy Caribbean islands began to feature in the world economic stage. It is perhaps serendipitous that it was also at this time, that the islands underwent significant constitutional reform after a decade of deciding where it stood in the Caribbean community: would it join other territories and become independent or would it continue to be a UK overseas territory.
By the mid 1960s Cayman made its decision – to pursue a path of internal self government as a UK overseas territory. Hence, the necessary steps began to enable the islands to function within the framework of a more modern democratic system.
The year 1972 saw the completion of this transformation, with the introduction of a new constitution. For all intents and purposes this was extremely timely as the introduction of a modern political infrastructure would only serve to improve Cayman’s image in the eyes of foreign investors as a modern stable place to do business.
The relevance of the 1972 constitutional reform to Cayman’s ‘economic miracle’ meant that in marketing the Islands as a desirable financial offshore destination, key selling points would have included that the Cayman Islands through its constitutional arrangement with the United Kingdom afforded a mixture of internal self-governance and external oversight through the islands’ alignment with one of the world’s oldest super powers, the United Kingdom.
Today, however, the benefits of constitutional reform are less apparent amidst the hurricane of financial turmoil that has engulfed these small islands. For the first time, this tri-island jurisdiction is caught in the perfect storm: international pressure to change the way Cayman conducts its financial offshore industry, a hard hitting global recession and the corresponding threat of domestic bankruptcy.
On the eve of going through all of these events, the islands are also poised to introduce a new constitution before the end of November 2009. Is this irrelevant to Cayman’s present situation or can it be seen as another sign of rebirth for the Cayman Islands and a perfect opportunity for it to reinvent itself?
The Cayman Islands Constitution Order 2009 – an opportunity to reinvent oneself
The Office of the Minister of Finance
With the advent of the new Cayman Islands Constitution Order, 2009 new reforms in Cayman’s governance structure may place the islands in an advantageous position politically as it embarks in an aggressive fight to keep its proverbial head above water.
Two new key constitutional reforms that may be of immediate benefit to the islands political and financial leaders are the new financial regime and the increased international personality that will be bestowed upon the political leaders.
Departing from a system whereby a non-elected representative of Cabinet, namely, the Financial Secretary is charged with the country’s finances, the new constitution will now place this responsibility in the hands of an elected Minister of Finance2. It is hoped that this change in regime would allow the financial vision of the islands to be seamless from conception to implementation because it is represented through one group, the political policy makers that represent the views of stakeholders within the country.
Through the implementation of new government policies under the auspices of the Minister of Finance, Cayman can look forward to seeing government support the financial industry in new and innovative ways.
In preparing for this change, steps are already being taken under the direction of McKeeva Bush, the Premier Designate and future Minister of Finance, to reorganise how government partners with the financial services industry. And under the present administration, this will certainly allow the United Democratic Party government to follow through on their policy initiatives to put in place:
a fully functional Financial Services Secretariat to support the Minister with responsibility for the financial services industry
a properly funded local and international marketing promotional programme for the financial services industry;
new measures to encourage international business to establish physical offices and headquarters in the Cayman Islands.
Likewise from a public finance perspective, the Minister of Finance will also be constitutionally responsible for managing this area. Therefore, new relationships would have to be forged with the private sector to determine the extent to which government provides public services to the financial services industry and to what extent the industry pays for such services and supports the wider economic base whilst remaining a leading competitor within the global financial industry.
Ministerial delegation in matters of external affair