Local economy grew steadily through 2015
Marco Archer, Minister for Finance and Economic Development
(CNS): The Cayman Islands economy grew steadily last year and government officials are now on course to meet growth predictions for the calendar year, according to the Third Quarter Economic Report 2015 from the Economics and Statistics Office. The report found that overall economic activity in Cayman grew by an estimated 1.6% in the first nine months of 2015 and that central government is maintaining its fiscal surplus and reducing public debt.
“Since the beginning of 2013, the local economy averaged 1.5% real GDP growth, that is, ten of the last eleven quarters recorded positive economic growth,” Finance and Economic Development Minister Marco Archer said. “The re-emergence of the local economy on a continuous growth path was achieved through sustainable fiscal policies, improved efficiency in the public sector and the facilitation of private sector development.”
The GDP growth was led by financing and insurance services, real estate, renting and business activities, electricity and water supply, and storage and other services.
Praising the government’s fiscal performance, Archer said he was pleased that the economic growth had been achieved in the midst of continued improvement in the public books, leading towards compliance with the requirements Public Management and Finance Law. “The FCO has confirmed their agreement that the government is compliant with the Cash Reserve Days as required by the Framework for Fiscal Responsibility (FFR),” he stated.
The central government’s overall fiscal surplus for the calendar year at the time of the third quarter was $104.7 million, compared to $92.9 million at the same time in 2014. The total outstanding debt of the central government declined to $518.4 million, down from $543.1 million one year ago.
Peachy! So may the civil servants now have their Cost of Living Allowances (which are several years overdue) restored .post haste?
Mr. Archer, as an economist, tell us what happens when Government pulls money out the local economy and hoards it as surplus. Does it increase economic activity? does the money create more opportunities? does it reduce the cost of living? does it reduce the cost of running Government? I could go on and on and on.
Please craft an economic policy that actually make sense and positively impact the local economy, you went to school on a Government scholarship, we the people deserve some return for that education we paid for.
Mr. 5.09, tell us what happens when you talk a lot about things you don’t get? CIG needs a surplus to repay the debt they created last time around and operate more vote buying programmes.
ohhhhh, now it all makes sense, sitting back down now
Mr Archer is badly in need of both a sense of humility and, more urgently, a sense of reality:
Increase in total population in 2014/15* = 3.7%
Increase in Caymanian population = 2.4%
Economic growth = 1.6% (annualized)
Therefore, real economic CONTRACTION = – 0.8% (counting Caymanians only) or -1.1% (counting all residents).
In other words, no matter which way you look at it, our economy CONTRACTED on a per capita basis, i.e. the basis that actually matters as a measure of living standards! **
Of course, a trained economist like Minister Archer knows all this (well, one hopes!), which makes his delight at his own performance all the more mysterious.
Ironically, the main driver of the paltry (nominal) economic growth has surely been the very immigration-driven population growth that the PPM has been railing against and the projects they tried to prevent in erstwhile opposition.
Heaven help the PPM if they ever succeed in preventing the growth in work permits. Their so-called “economic growth” would collapse, like…examples fail me….Cayman circa 2008/9?
What on earth would they have to congratulate themselves about then?
* P13 of Labour Force Survey released yesterday
** See http://www.economist.com/node/10852462
So the conclusion from your analysis would be that foreign labor imported into Cayman is the driver for the increase in GDP and that the local labor has dragged down growth through lack of productivity among that part of the population. Thank you for your hard work.
Lord, where to begin?
It’s not where people came from that causes the economic growth, it is that they are here both contributing to the country’s productivity and spending money. As contributors to productivity they can’t be credited with the economic growth, that is to the credit of their employer that chose to invest in a project that requires hiring them. However, as members of the community spending money and paying taxes (and thereby causing more productivity in the vendors of the products and services they buy), they do, in a sense, deserve the credit.
The economy would grow equally whether you added 1,000 expats or 1,000 Caymanians to the workforce. Since we are already scraping the depths of the labour market barrel here in Cayman adding 1,000 Caymanians to the workforce overnight would be virtually impossible.
As for YOUR bit about “local labour dragging down growth” (which was never stated or even implied in the original post) congratulations my friend for indulging in two forms of logical fallacy at one time.
Straw Man (Fallacy of Extension)
In order to counter an opponent’s argument, an exaggerated form of it is presented to demonstrate its weaknesses. By creating an extreme caricature of the opponent’s position, the weaknesses are so magnified that it no longer resembles the original proposal, but is a weak, hollow imposter that is easy to knock down – hence the designation of a “straw man”. The hope is that if the audience connects the straw man to the original proposition, it too will appear fatally flawed and lacking credibility.
Reference: http://commfaculty.fullerton.edu/rgass/fallacy3211.htm
Non Sequitur
Literally translated as, “does not follow,” this is a case of a statement that cannot be logically supported based upon the given evidence. In other words, a conclusion is drawn that is not in agreement with the original premise, the evidence provided, or any logical deduction. Sometimes such conclusions arise from a leap of faith to a indefensible conclusion.
Reference: http://www.don-lindsay-archive.org/skeptic/arguments.html#sequitur
Given the costs of work permits that implies that foreign workers must be considered more productive in an amount above the cost of their permit.
Just in case you were confused about where to pitch your patronisation, W, I am aware of the meaning of “straw man” and “non sequitur”, and I have seen many many examples in your historic posts.
What is amusing is that postulate at 7.15am is a legitimate logical inference from your original mathematical analysis but you seem too bloody-minded to see that.
Bloody-minded:
Someone who is bloody-minded makes things difficult for others and opposes their views for no good reason.
http://dictionary.cambridge.org/dictionary/english/bloody-minded
Absolute nonsense!
The fact that GDP increases when the workforce increases in no way implies that local labour is “dragging down productivity”, and that claim simply was not made.
Making something up, attributing it to the other side and then claiming it’s false is dictionary definition “straw man argument”.
ppm have done nothing but maintain the economic policies of the last administration which was policed by the FCO…….
thank god for the FCO because the last time the ppm had a free reign on our finances they bankrupted the country….
deliberate policies and strategies”… such as..?
Can anyone point to a single job that can be linked to a PPM “policy” or “strategy”?
PPM cannot take credit for an improving global economy and Cayman’s savior Uncle DART so please spare us the rhetoric
I’m sorry, but what is it you think he has done precisely to deserve this kind of praise???
He gets credit for balancing the budget when in fact the few actions he has taken have either INCREASED SPENDING or REDUCED REVENUE. In other words if he had done nothing at all we would have a higher surplus than we do.
What has he done to help the fiscal position of these islands? This is not a rhetorical question, if someone can point to something he has done, please do.
The fact is that he was hamstrung fiscally by the FFR. If anyone deserves credit for the surplus it is the FCO and/or the UDP (yes they were corrupt and we don’t want them back but the positive impact on the economy from their tenure in office is undeniable). Yes Marco is as honest as the day is long but that in itself is not praiseworthy, it should be a given.
Meanwhile there is STILL a lack of clean audit opinions or up to date consolidated accounts.
Furthermore as minister for economic development he has overseen a stagnant economy. Name one single initiative that has been started under this government that would have a positive effect on the economy? Again, not a rhetorical question, please name one if you can.
Marco is a hardworking, honest and intelligent man who loves his county and who has done virtually nothing for it.
If we are to give any politician high praise for merely not making things worse and/or not accepting brown bags that is a very low bar indeed.
Marco Archer’s a wolf in sheep’s clothing
Did Minister Archer forget about the 1.4 billion in long term debts for pensions and healthcare liabilities? A country with a total population of 55,000 (with 30,000 being Caymanians) should be very concerned especially when it is being lied to by its politicians as the total debts are further evidence that the current economic model and projections by the government are unsustainable medium to long term.
He has become a real disconnected politician like the rest so not really his fault
That’s lodge dressing up stuff, right?