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  • Recession hit Cayman Islands?

    Cash crunch hits Cayman

    By Camilo Thame
    Friday, September 04, 2009
    Sizeable operating deficits racked up by the Caymanian government over the last two months have turned its CI$14.4 million (J$1.6 billion) positive cash balance on July 1, 2009 to a CI$4.3 million (J$464 million) overdrawn account at the beginning
    of September.
    McKeeva Bush, Cayman's Premier Designate
    What's more, a CI$49-million (J$5.3 billion) projected shortfall in revenue for the current month has pushed the government to increase its bank overdraft, which can go as high as CI$15 million, pursue an aggressive privatisation programme and once again approach the UK Government to access a CI$372-million (J$40.1 billion) loan facility made available at a private bank, after the UK Foreign and Commonwealth Office (FCO) last week said it would unlikely approve further borrowing by its Caribbean protectorate.
    Yesterday, the Leader of Government Business (Premier Designate) McKeeva Bush said at a press briefing that operating expenditures and loan repayments could total CI$79 million while revenues are expected to be in the region of CI$30 million during the month of September.
    To meet the shortfall in September, McKeeva said his Government plans for, among other things, "advancing our discussions that we have already commenced on 'private financing initiatives' in respect of the two new high schools and the new Government Administration Building" - projects which have been blamed for ballooning cash outflows.
    "The UDP Government believes that the schools could have been far more modest and less costly - this would have significantly alleviated much of our cash outflows on capital projects," said Bush.
    But even payments on those projects had to be held back in order to meet government's payroll in September.
    Bush also plans to seek approval from the UK Government to use some of the loan fund's facility that was put in place with a local bank.
    "In this respect, Government will be making the submission requested by the UK FCO, next week," said Bush.
    Last week, the UK FCO told Bush via a letter dated August 27, 2009 that the office would have to be "absolutely convinced that there is a sustainable medium-term plan for turning around the public finances and paying off the debt before being able to consider any extension of borrowing."
    The FCO also strongly recommended that Bush consider new taxes, such as payroll and property taxes while the Cayman government should, not presume it could remain prosperous as an off-shore tax haven, given possible outcomes of the next G20 summit and Michael Foot's report on the UK offshore financial centres and given Cayman's heavy reliance on income made from fees on trust fund which have been declining in recent months as a result of the global economic downturn.
    Bush, yesterday, flatly rejected the concept of imposing property taxes as it was not considered "in the island's best interest" but said that the current "financial year will see the introduction of some new revenue measures as well as enhancement to existing revenue sources" and will be decided on later this month.
    According to Cayman News Service, the Government "was also looking for proposals from the private sector in the privatisation of or private-public partnerships for certain public sector services, including the sewage system, prisons, cruise ship facilities, cargo port, the airport, roads, and the Turtle Farm."
    • Don't let negative things break you, instead let it be your strength, your reason for growth. Life is for living and I won't spend my life feeling cheated and downtrodden.

  • #2
    Even More

    Originally posted by Assasin View Post
    Cash crunch hits Cayman

    Sizeable operating deficits racked up by the Caymanian government over the last two months have turned its CI$14.4 million (J$1.6 billion) positive cash balance on July 1, 2009 to a CI$4.3 million (J$464 million) overdrawn account at the beginning of September.
    Sometime last week, I thought of posting information on the current economic problems in the Cayman Islands, but decided to take a wait-and-see attitude if anyone else would start a relevant thread.

    The situation is even more serious for the Cayman Islands at this point in time than the above article indicates, as the British government actually suggested to this dependency that the IMF might be the best option (my words). In addition, paying the salaries of that nation’s civil servants for the month of September might be somewhat of a challenge for the government.

    Of course, while the Cayman Islands and, for other reasons, the Turks and Caicos Islands might be the island nations to be most concerned about at this point, we cannot ignore the fact that the IMF is increasingly being called on right now to implement life saving measures for several other Caribbean nations. Specifically, I’m referring to Jamaica, St Lucia, St Vincent and one or two others!

    Then, there’s the political and social future of the Turks and Caicos Islands, which today seems in limbo.

    Then, there’s the very, very unrelated matter of a certain alleged drug lord in Jamaica….

    Comment


    • #3
      but more than that OECD intiatives hurting OFC's

      Infidelity does not consist in believing, or in disbelieving; it consists in professing to believe what he does not believe. Thomas Paine

      Comment


      • #4
        Originally posted by Gamma View Post
        but more than that OECD intiatives hurting OFC's
        ...not to mention what may impact the OPPs!


        BLACK LIVES MATTER

        Comment


        • #5
          well wi should just be glad we don't have to deal with the PNPs...

          Talk about dodging a bullet !

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