Cayman development ‘spinning out of control’
In the fourth day of a five-part series on the Cayman Islands' economic growth story, we hear concerns about some of the side-effects of rapid development and population increase.
Unease is growing among Caymanians over the pace and scale of development and the problem of those on low pay being left behind in the fast-growing economy.
That is the view of Roy Bodden, an author, historian, former labour minister and retired president of the University College of the Cayman Islands, who believes the path his country is taking may lead to social unrest.
“Many Caymanians are alarmed now, because they realise the development is spinning out of control,” Dr Bodden told The Royal Gazette.
“We're on a treadmill — and if you're on a treadmill and don't know what you're doing, you're likely to fall off.
“We are not in control of the forces that run the economy. And we know that he who pays the piper calls the tune. The agenda is in reality not set by the elected legislature, but by the movers and shakers who shape the economy.
“The perennial question for me is: for whom are we developing?”
This has long been a concern for Dr Bodden: he wrote a thesis on it as an undergraduate in 1978.
The historical root of the problem is Caymanians have long been selling land to foreigners, on an absolute title rather than leasehold basis, he said.
Decades ago, all Caymanians had owned land and considered it a common commodity, Dr Bodden said. Foreigners moved in and bought waterfront areas that were regarded as almost useless by locals.
“Beach land had no worth,” he said. “We used it as a place to tend to our animals in mosquito infestation season and to beach our boats.
“You couldn't grow cassava, bananas or plantains on it. We were not a people of a leisure class, therefore it had no value to us.
“When the North Americans and Europeans came, the beach land was the first thing that attracted them. They made overtures and many sold it to them.”
Such land sales had resulted in established Caymanians being “marginalised and disenfranchised” in their own country, Dr Bodden argued.
He gave the example of an ongoing legal challenge by Caymanians to establish public rights of way to Seven Mile Beach, an area in which property is predominantly owned by non-Caymanians. The access to the beach was a right Caymanians had enjoyed for centuries, but now they were having to go to court to re-establish that right, he said.
Dr Bodden referred to Andrew Morris Gerrard, who was Commissioner, or Governor, of the Cayman Islands from 1953 to 1957, and who “warned us about selling our birthright for a mess of pottage” and urged that development should be carefully planned. “He warned us of the dangers of over-development, but we didn't heed that,” Dr Bodden said.
Cayman's population has grown to more than 68,000, swollen by foreign workers recruited by the burgeoning tourism and construction industries. The influx has exacerbated a shortage of affordable housing.
“We have more people on work permits than we have established Caymanians working,” Dr Bodden said. “We are importing people for whom we have no proper housing. Developers are building for the high end and not the middle income people.
“So many people are being left behind and this will end in social upheaval. If people don't have decent shelter, they become risks. If a man doesn't have a house he can retreat to, he has no stake in the society, then he has nothing to lose.”
Many of the work permit holders are labourers from poorer parts of the Caribbean region, such as Jamaica, Honduras and Haiti. In recent years, more have come from the Philippines and India.
“Nobody knows how many of these workers we'll need, as there is no plan — it's all harum-scarum,” Dr Bodden said.
“So you get communal living and these people will work for very low wages, driving down the standards. It's a cauldron ready to boil over.”
Inflation is a side-effect of the booming economy that disproportionately hurts those at the bottom of the economic ladder. The Government itself had recognised this with its latest “cost-of-living adjustment” for public-sector workers, giving them a 5 per cent rise from January 1 this year.
But wages in the private sector, particularly at the lower end, have failed to keep pace with inflation, something admitted by Alden McLaughlin, Cayman's Premier. Last November Mr McLaughlin said that a panel of experts was reviewing the national minimum wage to “look at the opportunity for an increase in real terms”.
While the boom has boosted government revenues, critical issues still had to be addressed, Dr Bodden said. In its latest budget, presented last November, the Government had allocated more to social welfare for the poor and vulnerable.
“We have grossly underfunded public pensions, we have healthcare costs sprialling out of control because we have a large number of indigent people who cannot be covered by health insurance, for whom the Government has to be responsible,” Dr Bodden said.
“So I'm saying we are measuring our progress as a prosperous society on a faulty report card.” Poverty in Cayman was “an inconvenient truth that we try to, if not outright hide, pretend that it doesn't exist on the scale it exists”.
Among the six books Dr Bodden has written is The Cayman Islands in Transition, in which he references the impact of development on the Caymanian identity.
He said established Caymanians — those who have been there for generations — are losing out to what he calls the “new elite”, people who have entered the community since the 1990s and who have “more money and more economic power, placing everyone else in the society at a disadvantage”.
The outstanding example, he said was Kenneth Dart, a billionaire who renounced his US citizenship to take Caymanian, Belizean and eventually also an Irish passport. He has been estimated to own between a fifth and a quarter of all Caymanian real estate, but “no one really knows how much he owns”, Dr Bodden said.
Dr Bodden has long advocated the idea of small island communities with similar economies and challenges coming together to pool the knowledge of academics and technocrats to formulate ideas on how to shape their futures.
“We are too small to exist alone and so we have to find a system in which we can learn from one another and cooperate and collaborate with each other for best results,” Dr Bodden argued.
He cited the example of transport policy, an area in which he said Cayman could learn much from Bermuda, which has a one car per household policy. Cayman has no such restrictions.
“Every month, we import about 300 cars,” Dr Bodden said. “The roads are congested, accident rates are skyrocketing, soon insurance costs will be going through the roof. Yet, some people think the solution is building more roads.”
At high school graduation time, vehicle sellers blitzed young people with advertising to tempt them to get their own car, he said.
“It's become a Frankenstein, it's really beating us up. How do you tell someone with four cars that now they can only have one or two?”
Asked what advice he would give the Government to stop the development from “spinning out of control”, he recommended a manpower needs assessment survey to determine the skills that Cayman would need over the next five or ten years and to act accordingly.
He said he was encouraged by young Caymanians who are campaigning against plans for a new $240 million cruise port in George Town harbour. The government-approved project will be put to a referendum this year and will be scrapped if a majority of voters opposes it.
If and when social unrest comes, it will emanate from young, university-educated locals, frustrated by not being able to get the jobs they had been educated for, Dr Bodden said.
“Revolution doesn't start among those on the fringes, it comes from frustrated young professional class,” he said. “These are the people who will blow the door off its hinges.”