When Chamber President Stuart Bostock gave his address at the Chamber of Commerce’s Annual General Meeting, he identified integration as one of the four engines of success in today’s world. “The Cayman Islands is a multi-cultural, multi-lingual and international community. Many diverse people have played a part in the country’s success and many are required if we wish to continue down the path of prosperity,” he said.
The country’s success can be clearly identified when the development of the Cayman Islands over the past 50 years is analysed. During that time Cayman’s population has grown from only 8,500 in 1960 to over 52,000 people today. Since the 1970s the average annual growth rate of the population was 4 per cent, a rate at which the population doubles every 18 years.
See Figure 1:
The population increase would not have been possible, had it not been sustained by sufficient economic growth. In fact the economic growth in the Cayman Islands has been driven first and foremost by international demand for both tourism and financial services. While this demand has grown exponentially the population had to grow at the rates it did, because economic demand far outpaced locally available resources.
Neither Caymanian birth rates nor new grants of citizenships would have been able to meet overseas demand, but instead had to be supplemented through immigration.
Still, despite a massive migration into the Islands, the share of Caymanians in the population remained above 50 per cent, indicating that although foreign labour was needed and foreign demand has caused much of the economic growth of the Cayman Islands; Caymanians played a pivotal role and had a large share in the economic success.
See Figure 2:
IntegrationThe substantial population increase posed and continues to pose several problems in terms of integration. On the one hand foreign workers have to be integrated into Cayman’s society and on the other hand Caymanians need to be given the opportunity to succeed in a more developed economy that brings higher paid jobs but also has much higher demands in terms of education and work experience.
The 10-year strategy document Vision 2008, released in the 1990s before wider immigration reforms, aimed for an immigration system that is linked to an overall growth management strategy “to prevent the degradation of Caymanian culture, environment and socio-economic framework”. The immigration systems itself should “protect Caymanians and give security to long-term residents”, the document stated.
Caymanian integration into the workplaceCaymanian integration into an economy dominated by financial services has been targeted by both the immigration and the education system.
The immigration and work permit system in combination with work permit fees for foreign workers ensures that the influx of foreign labour is regulated and subject to rules that put the interests of Caymanian workers first. As such any job has to be offered to qualified Caymanians and a job can only be offered to a qualified foreign worker, if it cannot be filled by locally available labour.
Caymanians have therefore, in theory, a significant advantage to maintain or gain employment over foreign workers. This is however only the case if the immigration system is supplemented by an effective education system.
Where an education system cannot produce the skills necessary for the labour market or when an immigration system pushes local workers into positions that exceed the given skill or experience level, integration attempts will meet the resistance of the private sector and ultimately fail.
As Cayman Finance Chairman Anthony Travers observed: “If you look at the top four accounting firms, you will find that the senior partners at all of those firms are Caymanians, so that one has to say that Caymanian integration had been very successful.”
It is debatable whether this integration has been successful across the board, he stated, conceding that there had been transgressions with respect to Caymanian integration in certain industries.
However, with regard to employment in general, or in other words the quantity rather than the quality of integration in terms of upward mobility, it is difficult to consider the integration of Caymanians into the workforce as anything but successful.
Contrary to popular belief, there is no evidence to suggest that the influx of foreign labour has increased unemployment among Caymanians. Over sustained periods, for example from 1992 to 1999 and 2002 to 2006 unemployment among Caymanians declined despite a rapid increase in the population. Unemployment in the Cayman Islands has in more recent decades mainly been the direct result of an economic crisis, both in 1999 – 2001 and from 2007 – 2009. The drop in external demand as a result of global economic crises caused an increase of the unemployment rate from 4 per cent in 1999 to 7.5 per cent in 2001 and from 2.6 percent in 2006 to 6 per cent in 2009. This unemployment rate of 6 per cent is still well below a rate of 8 per cent or higher prior to 1992.
In contrast, since the recent financial crisis, demand for foreign labour has been even more affected, as 11.3 per cent of foreign workers had to leave the Islands, illustrating the mechanics of Cayman’s immigration system, which effectively protects Caymanian workers.
See Figure 3.
The business licensing regulations, which require a business to have a Caymanian partner, equally support the integration of Caymanians into the economy.
Integration of foreign workers into Caymanian cultureThere is no reason to believe that the dependency of Cayman’s economy on foreign labour will diminish in the future. Simply to sustain economic growth and the standard of living within the Cayman Islands, foreign workers will be needed, as the number of Caymanians in the workforce is simply not large enough to meet the strong outside demand for services.
“It is not that education policies won’t be effective for the development of Caymanians; it is the reality that the significant international demand for our services has always outstripped (by a very wide margin) the number of qualified Caymanians that we can possibly supply to meet this growth,” wrote Paul Byles in an article in the Cayman Financial Review.
Vision 2008 gives a good indication of Cayman’s approach to integration. Based on the realisation that growth, including population growth, needs to be managed, the immigration system should not only regulate the total number of migrant workers coming to the Cayman Islands, but also where they come from.
Acknowledging that “respect for Caymanian and non-Caymanian culture is important for social harmony” one of the demands of the strategy document was to introduce a quota system, limiting immigration from individual jurisdictions to ensure a balance of cultures in the expatriate population and their impact on the culture of the Cayman Islands.
Given the political objectives Cayman legislation has been, quite naturally, more concerned with the integration of Caymanians into the workplace and their share in the local economy than with the integration of migrants into Cayman society.
Still, when looking at integration in terms of the status of non-Caymanians before the law and general rights for Caymanians and non-Caymanians, the integration of foreign workers was also supported by legislation. The protection of human rights, even if only recently enshrined in a Bill of Rights in Cayman’s constitution and enforced from 2012, had long been general practice in the Cayman Islands and non-discrimination and other rights were and continue to be something that Caymanians and non-Caymanians can enjoy.
But immigration measures that include a work permit and rollover system have created new issues with regard to integration. While Caymanian interests are more or less protected, the limitations for most migrant workers have increased. Because the general stay of foreign workers on the Islands is limited to seven years, or nine years if an employee is deemed to be key, there is effectively no strategy for long-term integration in place.
Under the current immigration system foreign workers are treated as temporary guests and it is difficult to see how expatriates that are granted only short-term rights of residency are connected to the long-term interest of the Cayman Islands.
This is also reflected in the economic interdependency between Caymanians and expatriates. Although Cayman’s local economy benefits greatly from the influx of foreign workers through an increased demand for local services, not all of the money earned in the Cayman Islands is necessarily spent there, for example on property, as long as the residency perspective remains short-term.
At the same time, when faced with an economic crisis, current regulations only accelerate the exodus of foreign workers. “Our view at Cayman Finance is that it was never a response to difficulties with Caymanian integration to introduce a roll-over policy,” said Travers,” because the results of that policy had been that there are now 7,000 fewer work permits.”
The effect that this has on local Caymanian businesses needs to be recognised by any policy that is concerned with integration. “We are all interdependent,” Bostock pointed out in his speech, concluding that “we must capture our history and culture but celebrate our diversity and use this unique environment to our advantage”.
It is this fundamental issue of striking the right balance between adequately recognising the value of having a wide range of people from different nationalities and cultures in the Islands, while at the same time protecting Caymanian interests, that needs to be resolved in order to achieve effective integration.
But it must also be noted that although certain short-comings remain both in terms of the upwards mobility of Caymanians in the workplace and the long-term integration of foreign workers into Cayman’s society, economic forces have shaped a system that has been able to accommodate a massive increase of the population and a huge influx of foreign workers over the past 50 years.