The low-lying coral islands of Grand Cayman, Little Cayman and Cayman Brac are located about 150 miles to the northwest of Jamaica. The islands were discovered in 1503 by the explorer Christopher Columbus, and originally named Las Tortugas, for their plentiful turtles. The turtle, an emblem of the islands, remains on the Caymans' Official Seal of Government.
Today, the Caymans rank as the fifth largest financial centre in the world, after London, New York, Tokyo and Hong Kong. First colonised by the British in 1670, the Cayman Islands in 2001 remain a British Overseas Territory that recognises Queen Elizabeth II as its official head of state, and is run by an internally autonomous representative government. The capital city is George Town, on Grand Cayman.
The Governor of the Cayman Islands, currently Peter Smith, is the Queen's representative and the head of the Cayman's nine-member Executive Council. The Council also currently comprises Attorney-General David Ballantyne, Financial Secretary George McCarthy and Chief Secretary James Ryan. The Legislative Assembly elects five additional members: the leader of government business and Minister for Planning, Communications and Works (Kurt Tibbets); the deputy leader and Minister of Government Business, Environment and Transport, (McKeeva Bush); the Minister of Community Development, Women's Affairs, Youth and Sport (Edna Moyle); the Minister of Education, Human Resources and Culture (Roy Bodden); and the Minister of Health and Information Technology (Linford Pierson).
The Cayman legislature is a 15-member Legislative Assembly elected for a term of four years. The last elections were held in November 2000 and resulted in a change of government. The next elections are due by November 2004. Elections are contested by teams and independent candidates rather than by political parties, although there have been recent signs of a nascent party system. The electorate has grown rapidly. At the turn of the 20th century, the Cayman Islands had a population just over 5,000; it had grown to 11,300 by 1971 estimates, and reached 16,677 by the 1979 count. By mid-2000, it had reached 39,020. To date, Cayman has assimilated this rapid growth with a minimum of disruption.
The colony's economic advantages are a stable history and political system, combined with freedom from direct taxation. For most of its past, however, Cayman made its principal living from seafaring: in the 19th century it was well known for its schooners, and until the mid-1960s its marine industry was the main economic driving force. With a total area of 118 square miles, no rivers and little agriculture, the Cayman Islands had seemed to offer little by way of onshore industry.
Since the 1960s, however, Cayman has been transformed. Finance and tourism have grown into the powerhouses of the economy – the latter facilitated by the opening of Owen Roberts International Airport on Grand Cayman in 1952. Snorkelling and diving have been particularly successful. Cayman today boasts more than 500 trust companies and banks, and by the fall of 2001 had some 520 captive insurance companies on its register.
Last year, Cayman agreed with the Paris-based Organisation for Economic Co-operation & Development that the islands' financial and regulatory regime would meet and continue to meet “the highest international standards”. Cayman was therefore one of the first jurisdictions to be excluded from the OECD list of tax havens.
In June of this year, the Cayman Islands were removed from another list – this one being developed by the Financial Action Task Force – of jurisdictions with non-cooperative records on money-laundering, where it had temporarily been placed a year earlier. Financial and legislative reforms instituted by the Cayman government have thus satisfied the demands of the international community and Cayman has rightly maintained its place among the global family of nations.
Unemployment in the jurisdiction, near 4%, remains low. The GDP of the Cayman Islands, as of 1997, was equivalent to US$1.108bn, with a 4.9% growth rate in 1999. Last year's annual report from the Caribbean Development Bank indicated that economic growth has decelerated, owing in part to a slowdown in tourist arrivals and the strong US dollar. The jurisdiction's own currency, the Cayman dollar, was first issued as legal tender in 1972, following the collapse of the Sterling Area, and its parity was switched from Sterling to the US dollar in 1974. Its link has remained fairly constant: as of September, CI$0.83 was equivalent to one US dollar.
In the wake of the many initiatives that have focused on the need for, and uses of, international jurisdictions in the past few years, a two-tier offshore world is emerging. Cayman, Bermuda and one or two others are in the first tier and look set to benefit from their whole-hearted acceptance of the need to operate within the confines of international law. Other, lesser jurisdictions, seduced by the short-term benefits of unsavoury practices, will likely be excluded from the top table. Cayman's regulators deserve praise for having realised, at a critical early stage, the need for probity and integrity in their international activities.