Immigration policy bolsters Cayman’s growth
In the second part of a five-part series looking at Cayman's growth story, and whether we in Bermuda can learn anything from it, we analyse population growth, the role of immigration and make-up of Cayman's labour force.
More than 30,000 people in the Cayman Islands are there on work permits: a remarkable statistic for a territory with a total population of 68,000.
The spike in incoming guest workers — permit numbers rose 3,000 between February and November last year alone — is a reflection of the rising demand for labour from a fast-growing economy.
In Bermuda, the statistics tell a contrasting story. In 2018, the number of work permits issued fell by 10 per cent to 9,369, the Bermuda Government revealed this week. That is down more by 40 per cent from the figure of 15,648 work permits in 2009. Meanwhile, official estimates of the island's population remain just below the 2010 census level of 64,000 people.
Construction and tourism are the leading users of Cayman's imported labour. That is not surprising given the ongoing property development boom and visitor numbers that climbed to 2.4 million in 2018.
Business-friendly immigration policies, based on ensuring that the economy's labour needs are met where local talent cannot be found, have fuelled population and economic growth.
Furthermore, Cayman provides a defined pathway to citizenship for foreign workers aimed not only at attracting and retaining foreign talent, but also at growing the population — a target of 100,000 has been mooted.
Foreign workers who have lived in Cayman for nine years can apply for Permanent Residency.
Another category of PR offered to the wealthy is the Certificate of Permanent Residency for Persons of Independent Means. And those who invest substantially in Caymanian businesses can also apply for PR.
People who have lived in Cayman for 15 years, provided they have had PR for five years, can become naturalised, become a Caymanian citizen and get a British passport as an British Overseas Territory Citizen.
Steve McIntosh is one of those to have attained Caymanian citizenship. Born and raised in Scotland, he arrived in Cayman in September 2001 as a chartered accountant.
Three years later, he founded recruitment firm CML, which specialises in finding employees for financial-services firms.
Cayman's economic fortunes depend heavily on inward investment, he said, and for those starting companies there was “nothing more toxic than being told whom you can hire and whom you can't”.
He added: “We are fortunate in that in Cayman we have a great availability of talent. The Government has a view that if you can't find talent locally, then it's okay to bring it in.”
Employers always preferred local staff, he said, because they came with local relationships and local knowledge, and required no work permit.
Government's policies were “heading in the right direction” from a private-sector hiring perspective, Mr McIntosh said.
He added: “Bermuda, being further along the development cycle, has given Cayman a lot of lessons in what not to do in recent years.”
He said economies in smaller countries like Bermuda and Cayman were far less complicated than those of larger countries — and therefore it was easier to see the impact of government policies.
Mr McIntosh said that for the most part, the community understood the link between a business-friendly immigration policies and a flourishing economy.
He added: “Over these past 18 years we have been through a few cycles. We are always in either a virtuous circle or a vicious one.
“The voices of protectionism are always there, and they are at their loudest when we're in a vicious circle. It doesn't matter how much economic success we have — those voices persist.”
Protectionism could only worsen economic difficulties, he argued, adding that its proponents in Cayman saw everything as “zero-sum: any benefit to you comes at a cost to me”.
Some have reservations about the consequences of an open immigration policy. Kenneth Bryan, an opposition Member of the Legislative Assembly, says some Caymanians are being left behind amid rapid growth and inflation.
Mr Bryan first stressed: “Caymanians have always been an open and welcoming people — we have never been anti-expatriate.”
While that remained true, he added, “people are beginning to understand how immigration policy can affect their lives”.
“It's becoming concerning, not because of the expatriate individuals, but because of the impact of bringing in cheap labour on the work structure,” Mr Bryan said.
He gave the example of a Filipino with an associate degree being willing to work for the Cayman minimum wage of CI$6 ($7.20) an hour, giving businesses the chance to recruit a high quality of labour for a low price.
Meanwhile, a Caymanian who had returned home after earning a degree overseas, could not afford to accept such a low wage. The overall impact was that wages were being driven down, even as the cost of living soared, he argued.
Mr Bryan is also concerned that the Cayman Government is not planning adequately for the continued development.
“What I find concerning is that the Government has taken this approach to grow, grow, grow — more businesses, more taxes — but without a proper evaluation of what this will do for the people.
“There are projections for Cayman to have another 7,000 to 10,000 work permit holders. Do they have any data as to what this could mean for our traffic problem? Or to the cost of housing?”
The Royal Gazette has requested an interview with a representative of the Cayman Government for this series, but so far no one has been available to comment.
Jude Scott, chief executive officer of Cayman Finance, a body that represents the territory's financial services industry, said many Caymanians directly benefit from international business.
“We have about 7,000 people working in the financial-services industry and about 50 per cent of that is local talent,” Mr Scott said.
“For those Caymanians and their families and dependents, they have a direct understanding of the benefits of the industry.
“People who are not in the industry sometimes do not have a good understanding of it.”
Cayman Finance has gone directly into schools to get its message across and to provide high school graduates a better pathway into the industry.
The programme comprises a series of workshops in students' last year explaining the industry and career opportunities.
“We pair them up with mentors from the industry and then provide them with one month's work experience with one of our member firms,” Mr Scott said. “We've found that to be very successful in helping educate the next generation of professionals to have a good understanding of the industry.”
Between 50 and 70 students benefit each year, he added.
The Government is also proactive in trying to match Caymanian job seekers with prospective employers through its JobsCayman online system run by Workforce Opportunities and Residency Cayman, which also probes immigration and work permit complaints with a team of nine investigators.
Cayman recorded 116 work permit offences in 2019 in the first 11 months of last year. Given the growth in work permit numbers, Alden McLaughlin, the Premier, quoted by the Cayman Compass, said “we have to rely on technology as a major tool to assist us to know whether or not employers are treating Caymanian applicants fairly when they apply”.