The Cayman Islands: Globalization
The interdependence and integration of the world’s economies, or globalization, is no new occurrence, but the rate at which it is happening has been increasing dramatically in recent years. Innovations in technology and ease of transportation have been effectively shrinking the world in recent decades. We can instantly contact someone on the other side of the world through a variety of mediums, whether it be phone, email, video chat or any number of other ways. We can hop on a plane and be across the country in a matter of hours. This “flattening” of the world, as many have called it, is happening everywhere, but is even more apparent in some areas than others. The impact of globalization on an individual country can have many positive as well as negative consequences. The various components of the society of the Cayman Islands, including the economy, government, culture, history, ecology, and social structure, have been impacted by the forces of globalization, and managing the future direction the country takes within the context of globalization will require careful thought and planning. There are several areas to focus on and many improvements that need to be made for the island to continue to be successful. Since the economic and business aspects of the island are without a doubt excelling and performing well, the areas I would choose to focus on are national identity, education, and the environment.
Cayman Identity and Economic Regulation
One area of focus Cayman leaders will need to consider as they chart the future direction of the country is maintaining some sort of balance between promoting the Cayman Islands’ place within the global economy while encouraging a sense of national identity. Since the majority of this global connectivity has occurred in relatively recent years worldwide, it has happened very quickly and has had some major impacts on some places. In the Caymans, this expansion of the banking industry within the global marketplace has all happened in the last couple decades. An explosion of their economy has brought people from all over the world to join in on the wealth that has accumulated there. This sudden influx of immigrants has meant that the already weak sense of national identity has been muddled even more as half the people residing there now are natives of other countries. This polyglot nature of the population creates come conflicted interests and tension between groups of people on the island. Caymanians feel that this is their island and they have the right to benefit from its prosperity, but at the same time, this economic boom would not have occurred if it wasn’t for outsiders who came in to take advantage of the tax laws of the island. Governmental leaders will need to find common threads that tie these diverse groups together as they forge a common identity and a common destiny.
Related to this is the tension that stems from Caymanians versus Ex-Pats. This cannot continue the way it is now if they expect a healthy future for the country. Caymanians need to accept that others will come in if they are not qualified enough to work in the financial jobs. At the same time, they need to work hard to develop what Cayman national identity is. It almost becomes understandable that they make it so hard for someone to become a citizen since the only thing that distinguishes them as Caymanian is that name on their passport. They need to develop what their identity is as a people and a nation is so they can identify themselves as something distinct.
A second area of focus in forging a successful future for the Islands’ inhabitants will be balancing economic development with cultural heritage. With such a young country it is understandable that there are areas that could and should be improved upon, especially as far as government. The problem with this is that what needs the most help is also what has enabled them to be so successful. People have come to this island to conduct business because of the lack of taxes. Especially at the beginning, this worked and continued to bring more people and more money the island. Now it is catching up with them though, because the government has more spending needs because of the higher volume of people and the need to provide those people with necessary services, but there is not enough revenue from taxes to cover the costs of those services.
An example of a segment with strict regulations inside the financial services industry is captive insurance. A captive insurance company is an insurance company formed to finance the risks of a particular group. This most likely happens if a company wants insurance beyond what a commercial company provides, either in dollars or areas of coverage. It could also be formed as reinsurance where insurance companies buy into a captive to insure part of the risk they are taking on with their clients. The Cayman Islands are one of the leading places for offshore captive insurance, though the United States has a growing market of them as well. Cayman is second to Bermuda, and is followed by Vermont for captive domiciles. Though there are a growing number of captives in the United States, many operations choose to station their captives offshore. Ninety percent of these captives are based out of North America. They choose to have their captives there for tax purposes. Captive insurance groups in the Cayman Islands are overseen by the Cayman Islands Monetary Authority. Groups like CIMA have worked hard to establish regulations that eliminate the ability for money laundering activities on the Island. The country even has a PR group in place to counter any negative publicity having to do with Cayman’s association with these types of behaviors.
Education in The Cayman Islands
The financial services industry is booming in the Caymans and is what has allowed them to prosper economically, but further economic development can only come through bettering the way of life, or culture, of a country, and that comes primarily through education. One area of government spending on the Islands that requires more than they can afford is education. The Caymanians want more of their own people in and running the businesses that have brought such wealth to the island, but the problem is that they do not have the education system in place to support this. A country’s ability to advance is largely dependent on the education that its people are receiving. The rest of Caymanian society has advanced very rapidly, but the education system has not kept up at the same pace. This means that with all the jobs coming to the island, employers are looking elsewhere. Though they have a system of higher education on the island, it was clear from talking to people there that if you could afford it, people sent their children abroad for college rather than staying on the island. This speaks loads for its reputation. They need to be able to educate their workforce within the island if they expect to keep any jobs internal. Governmental leaders mapping out the future direction of the country must find sources of revenue to fund a strong public education system. Only through a strong educational system can the Cayman Islands bring continuing economic development while also strengthening the cultural heritage of the country.
The Cayman Islands have transformed themselves in recent decades from a sleepy tropical backwater to a world center for banking and commerce. This transformation has resulted in sweeping changes in the islands’ infrastructure and institutions. However, some of the islands’ institutions have not kept pace with this far-reaching reinvention of Cayman society. The education system in the Cayman Islands is an example of an area for needed improvement. The rest of the society there has advanced very rapidly, but the schools have not kept up with the new pace. This deficiency in the education system leaves a country with many high level jobs, but not enough educated people to fill the positions. Despite a 90% literacy rate, there remains much room for improvement. The government of the Cayman Islands needs to address the improvement of public education as part of their overall vision to improve the economy of the Caymans.
Many of the problems in the educational system stem from a failure of philosophy and vision. The government of the Cayman Islands has seemingly failed to take on the public education of its citizenry and residents as a primary mission. Nearly half of all students in the Caymans are enrolled in private schools. This is an astounding number of students that are privately educated as compared with 11% of K-12 students in the United States receiving their education in private educational institutions. One reason for this great discrepancy is that the private schools on the islands have a much better reputation, and so if people can afford to send their children there, they will do so. A second reason, which also has a large impact, is that expats are strongly encouraged by the government to send their children to private schools. They are only allowed to attend the public schools if there is room, and they are required to pay a fee for being enrolled in the public school system. These fees are around 1,000 a year, depending on the grade level. While fees for private schools tend to be higher than the public school fee, around 13,000 a year, the wealth of private school options, the low reputation of the public schools, and the bureaucratic barriers to public school education for expats combine to reduce public school enrolment.
The failure of the government to fully embrace public education as a primary mission impacts not only the number of students who elect to attend public schools but also the amount of public money directed toward education. Education poses a high level of financial commitment from the government. Students are required to attend school until they are 16. Despite the high number of students in private schools, the majority of island students still attend public school. This means that there are a large number of children relying on government funded education. As with other areas of the government services, this large amount of spending becomes a problem in a county with little tax revenue. They are spending more on these educational programs than they can afford, while still not spending the amount that is necessary to provide a competitive education for public school students.
The weaknesses in the Cayman Islands educational system extend beyond K-12 public schools to post-secondary education. The islands do have several institutions of higher education, including the International College of the Cayman Islands, the Cayman Islands Law School, St. Matthews University of Medicine, and the University College of the Cayman Islands. After talking to other people on the island, though, it became quickly clear that the majority of people left the island to be educated abroad at the post-secondary level. A quality educational system must provide learning opportunities to meet the needs of society from a preschool to post-secondary level, and it does not appear that the Cayman Islands have yet been able to attain that goal.
One very clear problem with the island’s education system that impacts students at all levels of education on the Islands is the lack of teacher training institutions of higher learning on the Islands. Cayman Islands teachers are not educated on the island, which means that teachers and professors at the Islands’ schools need to be brought in from other countries. This lack of teacher training options has been explained as being largely because most students are only interested in the business and finance majors, because of the dominance of that industry on the island, but this flaw in the educational system remains a hindrance to economic development that must be addressed.
The Cayman Islands need to implement innovations to improve the education system with the same level of attention as they are putting to implementing the advancement in other areas crucial to the further development of the country. Education is key to the advancement of any society. If they fail to do so, then the high level jobs of the country will continue to be outsourced to non Caymanians, and economic betterment will not extend to all within Cayman society.
Cayman Environmental Protection
A final area of focus for governmental leaders would be protecting the environment while allowing individuals to pursue economic betterment. One way that I see them as being able to do this is through the distinct environmental characteristics that are natural to the islands. One of the more obvious examples is all the coral and ocean wildlife that brings so many tourists to the island, but this does not distinguish them very much from other tropical locations. They need to embrace more heavily things like the Blue Iguana, which is native only to Grand Cayman. It is the individual things like this that makes the Cayman Islands unique and sets them apart from the rest of the Caribbean. By preserving and promoting their unique national resources, governmental leaders can diversify their economy beyond the business and banking sector and provide jobs for the betterment of their people, while saving the fragile environment of the Islands.
The Cayman Islands have experienced tremendous benefits from globalization in the past few decades and have handled it relatively well, but there is certainly room for improvement. Governmental leaders must balance the competing forces of globalization and national identity, economic development and cultural heritage, and environmental preservation and individual betterment in order for Caymanians to continue to prosper in the future.