Port plan to undergo economic impact assessment

An economic impact assessment for the proposed cruise berthing facility is in the works, The Cayman Reporter understands.

Minister of Finance Hon Marco Archer

Minister of Finance Hon Marco Archer confirmed that PricewaterhouseCoopers (PWC) has been contracted to carry out the assessment. The Cayman Reporter inquired if the assessment has already started and how much this assessment will cost the country, but Mr Archer has not responded at press time.

The Cayman Islands has already done an Environmental Impact Assessment (EIA) to the tune of $2.5 million based on the current proposal of a two finger pier. The EIA indicated that dredging and its silt plume could impact 15 acres of coral reef. Now that the EIA has been completed and the Department of Environment (DoE) is the process of completing a report on the assessment to submit to Cabinet, a call for the examination of the proposal’s impact on the entire economy has been made.

Founder and Director-General at The Cayman Institute, Nicholas Robson, said to grasp the full impact of the proposal its impact on the country’s economy must be evaluated. He believes the economic impact assessment should state how financing a cruise port, that could destroy a significant part of the reef on the south-west of the island, will affect the country. He believes it should look at how many jobs will be affected in the retail sector as well as in to water sports industry.

He noted that it is also imperative to analyse the true strengths and weaknesses of the cruise tourism and stay-over tourism to these islands.

“We should be weighing up the cruise passenger industry and its per-capita spend against stay-over tourism. Should we be looking into lengthening the runway to 10,000 feet to be able to accommodate long haul flights from Europe and points east? The Persian Gulf and China have many high net worth individuals which may well want to come to the Cayman Islands. We have already had Mr. Lee Ka-Shing one of the richest men in Hong Kong residing and doing business here,” he said. Furthermore, Mr Robson stated that it is important for Cayman to know how many cruise passengers it can manage. “If we try and take too many cruise passengers per day none will have an enjoyable experience,” he said.

Commenting on his own stance on the port plans Mr Robson said he is for any initiative that will have the greatest benefit to the majority of the people in the Cayman Islands. “A decision made today will affect the Cayman islands for many years into the future. Furthermore, with Cuba opening up the cruise industry may find that more passengers want to go to Cuba, causing some of the cruise lines dropping Cayman,” he said.

The Advancement of Cruise Tourism in the Cayman Islands (ACT) member Chris Kirkconnell told The Cayman Reporter that the ACT was formed because members involved in the cruise industry felt that the Cayman Islands Tourism Association (CITA), the tourism sector’s representative group, was only concerned about stay-over businesses. Those involved in cruise felt that in order to have a voice they had to start a group of their own.

“Once we formed ACT CITA tried to convince us that we didn’t need a separate entity and it seemed like they were trying to give us some kind of attention up until now. If you look at the member makeup of CITA its much more heavily stay-over focused than cruise,” Mr Kirkconnell expressed. More

 

A Fossil Fuel Free World is Possible: How to Power a Warming Earth Without Oil, Coal and Nuclear

There’s all sorts of, kind of, false beliefs about renewable energy, but things have changed. Wind is, right now, not only one of the fastest — between wind and solar — are the fastest growing new sources of electric power in the United States, but wind is actually the cheapest form of electricity by far in the U.S. today.

Floating Offshore Wind Turbines

The unsubsidized cost without the subsidies is about 3.7 to five cents per kilowatt hour. Subsidies are another 1.5 cents to drop those costs per kilowatt hour. That compares with natural gas which is six to eight cents per kilowatt hour. So wind is one half the cost of natural gas. Utility scale solar is about the same as natural gas now; it’s also around six to eight cents per kilowatt-hour unsubsidized.”

Well, it turns out that people today can actually control their own power in their own homes. You can put solar panels — I mean wind turbines may be only in a few locations in your back yard, but you can combine solar panels on your roof top with batteries and Tesla has a new battery pack that you can put in your garage that can — where you can store electricity during the day that from the solar, and then use it — use that electricity when there are peak times of electricity because that is when the price is much higher. But people can do other things. They can weatherize their home, they can use energy efficient appliances. There are a lot of things that people can do to reduce energy use and go towards 100 percent renewable energy. Using heat pumps instead of gas heaters. Getting electric cars instead of gasoline cars. More

 

 

HSBC to pay $43 mn in probe over Swiss subsidiary’s tax evasion

HSBC said it will pay 40 million Swiss francs ($43 million) in compensation to Geneva authorities to avoid charges of money laundering for its Swiss subsidiary. The fine is the biggest ever in Geneva’s history.

“The investigation found that neither the bank nor its employees are suspected of any current criminal offences,” HSBC said in a statement on Thursday, according to the Guardian. The bank added that the probe was closed.

The Genevan authorities said the payment, which is being described as “compensation”rather than a fine, was in line with the profits obtained by HSBC from processing illicit funds.

The bank also said it has improved practices to keep clients from using the bank “to evade taxes or launder money,” and drastically reduced the number of its accounts.

When announcing the fine, the judge warned HSBC it was its final warning.

“This is an excuse which will only apply once,” Olivier Jornot, Geneva’s chief prosecutor said, according to the Guardian. He also blamed the weakness of Swiss law with regards to criminal funds entering the financial system.

Geneva opened a money laundering investigation into HSBC’s alleged illegal tax activity earlier in February. Swiss police then raided the bank’s Geneva office. Europe’s largest bank came under fire after the International Consortium of Investigative Journalists published a report naming 100,000 clients that were using the bank to dodge taxes.

The revelations came from a list of HSBC’s clients stolen by a former HSBC computer technician, Herve Falciani, back in 2008. Falciani shared the confidential data with French authorities. More

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Why did the Cayman Islands not prosecute HSBC for allegedly money laundering in the Cayman Islands? Editor

 

 

Civil Aviation Unveils Design For New Cayman Air Terminal

The Cayman Islands Airports Authority (CIAA) has unveiled the interior conceptual drawings for the multi-million dollar expansion project at Owen Roberts International Airport (ORIA).

Commenting on the design created by Florida based firm RS&H Group, CIAA’s CEO Albert Anderson said, “The interior design is very impressive and I am confident that once completed the new expanded airport will be a first-class terminal facility

The CI$55 million expansion project should take around three years to complete and will nearly triple the current space at the airport. Construction on the first phase of the project is expected to begin this summer.

Here is the Cayman Islands Government's chance to save money and show their support for alternative energy. Covering the roof and parking lots with solar panels, and using LED lighting would set an example for Caymanians and Caymanian businesses to follow. Editor

 

Economic Legacy of Lee Kuan Yew: Lessons for Aspiring Countries

Developing countries have much to learn from Lee Kuan Yew, the first prime minister of Singapore who transformed the republic from a third world economy to one of the most advanced countries in one generation.

Lee Kuan Yew

The lessons for countries aspiring to learn from the Singapore development model are clear – strengthen institutions and improve governance.

But this is much easier said than done. To begin with aspiring countries need to improve the rule of law so that no one is above the law of the land. Equally crucial, they need to reduce corruption as corruption is regressive – small and medium-sized firms pay higher amounts in bribes than large firms.

Thirdly, they need to reform public institutions such as the civil service, bureaucracy, and public administration. Fourthly, they also need to improve the environment affecting the private sector through regulatory reforms, reforms of labour markets, and provision of clearly-defined property rights.

The dilemma is that such reforms generate benefits only in the longer term, making them hard for policymakers and politicians with a shorter time horizon to set as priorities. Yet without them, other policy measures to support sustained economic growth will become less effective and ultimately unravel.

Importance of good governance

Strong institutions and good governance – the economic legacy of Lee Kuan Yew for aspiring countries

The Singapore model of good governance is well-recognised. Development theorists of the past were of the view that economic development could be explained solely by factors like the availability of natural resources, high levels of saving and investment, and openness to foreign trade and investment.

More recently, the Growth Report published in 2008 by the Commission on Growth and Development headed by Nobel laureate Michael Spence has found that an additional factor has also to be good governance, based on mainly Singapore’s development experience under Lee.

As Senior Minister Goh Chok Tong, who participated in the Commission, puts it, for a delicious dish “besides having the right ingredients and the right recipe, you must have a master chef”.

Economic development does not just happen. It must be consciously chosen as an overarching goal by the government.

Good governance means a government that delivers political and economic stability, implements the correct macroeconomic policies, articulates a vision for the country and implements it.

This requires a capable, committed, and credible government, governments that people can trust in, and leaders who are above the board. An abundance of natural resources is neither necessary nor sufficient for a country’s economic development. What is required is good governance.

A case of good governance is Lee’s choice of the Singapore development model in the 1960s and beyond.

The Singapore Development Model

After the separation from Malaysia in 1965, Singapore was similar to a typical developing country of today. GNP per capita was about US$300, unemployment rates were high, and racial disharmony was rife. The announcement by the British in 1968 that they would withdraw their forces from Singapore was also expected to aggravate the unemployment situation further. How should jobs be created?

As the prime minister of a small country, Lee was always thinking big and making bold decisions in the interest of the country. Mr Lee adopted a development model based on export of labour-intensive manufactured goods to world markets. Lee invited multinational companies from all over to invest heavily in Singapore. Produce in Singapore and sell to the world, he told them.

To provide an attractive investment environment, the government built the appropriate infrastructure, cut tariffs and quotas, offered tax incentives, and implemented appropriate macroeconomic policies. The Economics Development Board (EDB) Singapore was established in 1961 to provide a business friendly environment to foreign investors and to convince them that Singapore was a good place to invest.

The National Wages Council (NWC) was also established in 1972 to make sure that the benefits of foreign investment were shared and also to accelerate Singapore’s move up the development ladder. Mr Lee also met foreign investors regularly and listened to them and their grievances.

Although pragmatic, Lee’s choice of an export-oriented development model driven mainly by foreign investment was a risky strategy at the time. This is because in the 1960s and 1970s, foreign investment was not welcome in the developing world.

The dependency theorists, in particular, argued that foreign investors from developed countries typically exploit cheap labour and extract natural resources of the developing countries. It is only after the success of the Singapore development model that export-oriented development strategies driven by foreign investment has been popularly adopted all over the world.

‘It’s not how you start but how you arrive’

In the 1980s and the 1990s the type of investment Singapore sought to attract shifted gradually from labour-intensive industries (eg, garments, textiles, and wigs) towards more high-tech and knowledge-based industries (eg, chips, wafer fabs, and disk drives).

Lee noted that, since the unemployment problem had been overcome, the new challenge was “how to improve the quality of the new investments and with it the education and skill levels of our workers”.

Lee’s attempt to make Singapore the Asian financial centre and global business hub is also bold. Unable to compete with Hong Kong then, Lee tried especially hard to convince foreign bankers and international financial institutions to come to Singapore by establishing integrity, efficiency, the rule of law, reliability, and stability.

In his words, “[the] history of our financial centre is the story of how we built up credibility as a place of integrity, and developed the officers with the knowledge and skills to regulate and supervise the banks, security houses and other financial institutions….”

Overall, Mr Lee’s development strategy which focused on strengthening institutions and improving governance was successful. Other developing countries will, however, face difficulties in adopting this strategy.

A case in point is South Asia. Countries in this region had begun their reform programmes in the early 1990s by focusing on macroeconomic areas – monetary and fiscal reforms, and industrial deregulation – which had contributed to a more rapid economic growth.

These reforms, however, eventually ran out of steam – because of red tape, endemic corruption, and lack of rule of law – and have contributed to the recent economic slowdown. Lee’s model followed his dictum, which he shared with the King of Bhutan: “It’s not how you start the journey that counts, but how you arrive.” More

 

Disconnected: Hundreds live with no power in Grand Cayman

(CNS): A freedom of information request to the Electricity Regulatory Authority (ERA) has revealed that more than 640 CUC customers have been cut off by the power supplier, mostly as a result of non-payment of bills. Many of those cut off are families who have been living without electricity for 90 days or more.

The request, which was submitted by a CNS reader, asked for the details of residential customers who had been cut off because their bills were not paid. The statistics show hundreds of people, including children, across Grand Cayman have been without a power supply for more than three months, confirming fears that the number of people living in real poverty is increasingly significant.

The ERA said it was not able to break down all the statistics because CUC merely tracks non-voluntary disconnections, which may also be due to safety reasons and not always because customers failed to pay their bills.

The ERA also explained that CUC did not indicate whether these more long term cut offs were commercial or domestic. Although some businesses may indeed be involuntarily disconnected, the situation would not be for extended periods, as any commercial enterprise without power would not last for very long. It is fair to assume that the disconnections are predominantly residential.

The largest number of disconnections are in the capital, where 306 premises have been cut off for more than three months, as at 24 November. Another 119 customers in Bodden Town were disconnected by CUC and some 117 in West Bay. Meanwhile, another 29 people were cut off in North Side and a further 23 in East End. A spokesperson for the ERA explained that the missing 47 are accounts that have been written off as CUC believes they are abandoned premises.

In addition, the ERA was able to state that 273 residential consumers had been disconnected for a period of less than 90 days, but these figures are constantly changing and any number could have been reconnected to the supply while additional households could have been cut off.

However, on 24 November there were 51 households in Bodden Town, six in East End, 50 in George Town, Seven in North Side and 59 in West Bay without power that had been disconnected within the last 90 days.

CUC recently confirmed to CNS that the firm is now cutting off power suppy without warning to customers who fail to pay their bills within 30 days. More