The following is an editorial printed by Cayman Net News yesterday, under the headline 'Not a good example for Cayman to follow' and reproduced here with permission:

As we have pointed out in earlier editorials, our sister British Dependent Territory, Bermuda, is often held up by the current government majority as an example for the Cayman Islands to follow but, at the same time we have also suggested that there are grave doubts as to the wisdom of such a proposition.

Yes, on the surface, there are some similarities between Bermuda and the Cayman Islands: we are small island territories, each enjoying comparatively high standards of living by virtue of great success in the financial and tourism industries. Bermuda is somewhat more advanced constitutionally than the Cayman Islands, but that is only as a result of the negligence of successive governments here.

We each face immigration pressures and, indeed, the Cayman Islands have followed the Bermuda model for controlling the influx of foreign workers in the shape of the immigration term limits, or rollover policy.

However, there are also some significant differences, not the least of which is that Bermuda has always been a much more polarised society on the basis of race, with the inherent tensions created thereby.

These racial divisions and distinctions in Bermuda are now being used politically by the government there, in much the same way as our own government, for its own political ends, seems intent on creating homegrown polarisation between us and "the others", as articulated by one Cabinet minister in reference to foreign workers.

Indeed, the latest developments in Bermuda could sound the death knell for the island's financial sector and, in the normal course of events, the Cayman Islands ought to be the beneficiary, but that is now by no means a foregone conclusion.

According to a recent article in Bermuda's Royal Gazette, businesses there may soon be forced to recruit and promote black Bermudians ahead of other candidates through newly-drafted "employment equity" laws.

The new legislation will reportedly require firms of 40 or more employees to set up policies to ensure black Bermudians achieve "a degree of representation in each occupational group in the employers' workforce that reflects their representation in the Bermuda labour force".

Not surprisingly, local business leaders claim that the proposals will encourage senior executives to leave the island, and this comes on top of existing concerns surrounding Bermuda's political climate and work permit problems, about which we have also written in recent weeks and months.

Indeed, we pointed out that, in a process that is already starting to take place in Cayman as well, Bermudians are facing job losses as a result of unforeseen and unintended consequences of that country's own six-year rollover policy.

International companies are now outsourcing jobs overseas because of difficulties associated with hiring foreign workers on limited-term work permits.

This will directly affect local people and their place in the workforce because, as companies increasingly seek to outsource overseas jobs that have previously been filled by expatriate employees on work permits, they will also outsource lower-level jobs that would ordinarily be filled by locals.

Such outsourcing will inevitably be followed by the businesses themselves leaving for more accommodating jurisdictions and one of those alternative destinations might have been the Cayman Islands.

However, once they do their research, no individual or company that has been burned in Bermuda is going to risk the same thing happening here. In addition, competition for traditional offshore business such as captive insurance is getting fiercer, with several onshore jurisdictions such as the state of Vermont in the US is now making substantial inroads into the sector hitherto reserved for Bermuda and the Cayman Islands.

We have been warning for many months of this and other consequences of Cayman's own rollover policy but, hitherto, we have been excoriated by the People's Progressive Movement (PPM) administration and its supporters, who seem intent on following in the footsteps of Bermuda to its eventual demise.