(CMR) Minister of Tourism and Ports and acting Deputy Premier, Hon Kenneth Bryan, has criticized a report by a regional economist that suggests tourism is not a major contributor to the Cayman Islands economy.
Bryan said the report “Unleashing Cayman's Potential: A Journey towards Prosperity and Unity” by Marla Dukharan has drawn some conclusions that unfairly assess the industry without the relevant data.
He pointed out that the report admitted to lacking data to support some claims.
“While we have found no official data published on the revenue generated from Work Permits granted to the tourism sector specifically, the Tourism Accommodation and Cruise Ship Departure charges amount
to less than 3% of Government Revenues, ” the report stated.
“I think it's highly inappropriate some of the things that she has asserted…an attack on a very important industry on which many Caymanians rely heavily. Tourism is the most dominant sector for Caymanian ownership. It's the easiest pathway to entrepreneurship and being able to have a stake in any one of the industries,” the Minister stated.
Although there are Caymanians are in financial services, Bryan explained that one needs a large amount of capital to get into that space; as a result, tourism is where you find more of the generational Caymanians.
He questioned the reason for the report, stating that it appears to be trying to damage the image of the Cayman tourism industry. He said that based on the ‘political' tone of the report, he is curious to know who asked Dukharan to do the report and her reason for undermining the sector.
According to the report, “Unlike the rest of the Caribbean, which relies heavily on tourism to create jobs, in Cayman, 9,595 work permits were issued in the restaurant, accommodations, wholesale & retail sectors in 2022, meaning 75% of the tourism labor force is imported, so the domestic inputs into tourism in Cayman are very low.”
It further stated, “And the Cayman Islands is the only country in the Caribbean that consistently shows a net outflow of remittances, as foreign workers send a portion of their wages back home. This net outflow of remittances constitutes a drain on the Cayman Islands economy, just like imports.”
The economist also said that “based on the number of tourists vs the size of the population, it is safe to assume that tourism is a significant contributor to the import bill in Cayman.”
Bryan said people are now questioning government policies based on this “flawed” report, so he has to address her comments.
He said one concern now is why the government is spending so much money on the aviation sector if tourism is not generating a large income; however, he pointed out that large players in aviation are from the financial service.
“The general aviation area is actually mainly supported by financial services, not leisure. We are trying to support Financial Services by improving those amenities that when the millionaires or billionaires come with all their companies in the Cayman Islands- which we are happy to have- they have top-of-the-class services in the Cayman Islands so they can continue to register their business where we get revenues and taxes from to help pay for our elderly, our children and those who are in need,” Bryan said.
Bryan said it is unfair that the economist has not linked tourism and Financial Services since one of the reasons financial services do well is the tourism industry. Instead she has drawn the conclusion that the Financial Services sector subsidizes tourism without facts.
Dukharan stated, “I don’t have adequate data to say definitively, but I believe that the financial services sector also subsidizes the tourism and other import-dependent sectors from a foreign exchange standpoint. Because the tourism sector imports everything, including labor, and generates a net outflow of remittances, and the level of leakage is so, high, it is safe to assume that the amount of foreign currency earnings remaining in Cayman from the tourism sector is very likely to be a fraction of tourism’s overall earnings, while the reverse is true for financial services.”
“So – tourism isn’t quite the goose laying the golden egg that many believe it is, and I think it is safe to say that while financial services is producing a bounty of golden eggs, these are really the only solid eggs in Cayman’s basket. And this makes Cayman fiscally and economically vulnerable (not unlike the rest of the Caribbean),” the economist added.
Bryan expressed concerns that with these bold statements, this report was prepared without any data from his ministry or relevant organizations in the Cayman Islands.
The full report can be found at https://marladukharan.com/special-reports/unleashing-caymans-potential-a-journey-towards-prosperity-and-unity/
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