Cargo port could curb inflation, claims minister

| 19/06/2019 | 63 Comments
Cayman News Service
Roy McTaggart addresses Chamber of Commerce members

(CNS): The finance minister came up with a new justification for the cargo element of government’s controversial cruise berthing project Wednesday, as he addressed members of the Cayman Islands Chamber of Commerce. Roy McTaggart noted that the increase in inflation was a reflection of Cayman’s successful economy and its “high level of activity”. But, he said, government was aware of the problems it presented and the development of the cargo part of the proposed port project would help curb the cost of living by bringing in more and cheaper goods.

With inflation running as high as 4.8% last year and 4.5% in the first quarter of this year, impacting those on fixed incomes and low wages the hardest, McTaggart said this was a “product of market forces”, but government needed to support the business community to address the problem of inflation rather than attempt to impose controls on the market.

Speaking at the Economic Forum at the Kimpton resort, McTaggart said that inflation was caused by having “too much money chasing too few goods”. Expanding the cargo facility was a significant part of the anticipated continued growth and continued development of Cayman.

He said this part of the project needed more attention because “it was an essential element if our economy is to grow”. Every country must have a commercial port and it was better that the impact was in the current harbour than damaging somewhere else, he added.

McTaggart said an enhanced cargo facility was needed to ensure “the supply of goods increases”, as he implied that more imports would bring down costs and help with the cost of living.

However, following his full address, in which he reviewed the continued growth in GDP, the fall in unemployment, the state of government finances and all of the elements that are fuelling the Cayman Islands’ “robust economy”, he accepted that one of the major problems of inflation was the increase in the cost of housing and accommodation.

McTaggart also noted the impact that Airbnb was having on rents. With homeowners opting to rent short-term to visitors, this was increasing the cost of long-term rentals for those who live here full time. But he also noted that in general the supply of affordable rental accommodation was not keeping pace with demand, pushing up rents. He said government was trying to help via the National Housing Development Trust and by cutting stamp duty for first-time Caymanian buyers.

The impact of Airbnb was also confirmed by Tourism Director Rosa Harris in her address updating the audience on the continued record-breaking overnight tourism success. Harris stated that the growth in accommodation in Cayman listed on the online platform was significant. She said that over 60% of the entire room capacity was now guesthouse accommodation being marketed through Airbnb.

According to the DoT, between 2015 and 2019, the bedroom stock in the Guesthouse and Villas licensed category, which includes Airbnb, has increased by 61%. Within this same time period, the bedroom stock for Apartment/Condo and Hotel licensed categories each grew by 27%.

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Category: Economy, Politics

Comments (63)

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  1. Anonymous says:

    Let me see if I’m getting this properly, things are so good here that the natives can’t find good jobs unless they work for Gov’t. The new cargo and Cruise ship facility will not increase profits to their businesses, because they are foreigners. When the cruise ship money profits the people involved in that business or helps them retire so they can stay home, that is not a good thing.
    Gov’t hospital is owed over CI$70 million
    A new Gov’t school will cost over CI$100 million plus each teacher will get CI$60,000 per year
    NAU is spending over CI$60 million
    But we don’t think this will help our budget expenses. Explain that to me
    We have more blue spots than anywhere else that I know in the world but no highway from the East? What about small dockage throughout the Eastern Districts?
    How about decentralizing Gov’t offices and make a retirement District for old people to enjoy their last years on earth. Somewhere in the Eastern Side of Grand Cayman. Don’t worry about the new dock it will be good for the country. The Cruise ship passengers will pay for it.

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    • Tell It Like It Is says:

      That statement of increased cargo facilities will bring down inflation is surprising and downright asinine. Higher volumes of produce/products/Cheaper goods will not be imported by the local vendor mafia simply as it has been said the profit margins in the food business are very slim, ( so they say) therefore it makes no economic sense to bring in cheaper goods to further erode their weenie mark ups haha!

      The truth be told our costs for food is only high because of the excessive mark ups and the transit from south to north back down to the Caribbean which increases the overall cost of the goods. I know some of the economists will dispute this because of its simplicity but it’s true.

      On a similar note. Most people will recall a trip by the Premier not too long ago to a neighboring now highly troubled region in the quest of having products shipped directly to Cayman I wonder why there was no subsequent report on this mission hehe!

      Well as they saying goes Only in Cayman.

  2. Anonymous says:

    But will it curb stupidity …..?

  3. Anonymous says:

    Could someone please comment on how increasing the depth of the harbour will allow more shipping? If it means the shipping companies can use a bigger ship (if they have one) then they will just cut down on the number of sailings surely. The ships are not exactly queuing to dock at the moment or leaving cargo in the US for the next ship!

    • Anonymous says:

      You are correct. Increasing the depth of the port alone will not reduce inflation as there are various factors that cause inflation.

      I have nothing against Mr. McTaggart but I enjoyed listening to the former Minister of Finance, Marco Archer, because he always gave in-depth explanations that distinguished between the different causes of inflation. I remember him speaking about it many times so I do not think the port alone is the answer.

  4. Anonymous says:

    The desire to share the voyage itineraries with big northbound shipments from Paramaribo, Santa Marta, Barranquilla, Cartagena, Guayaquil, Paita, Manzanello, and Port Moin must be a salivating temptation for this regime. Being a warehousing and distribution port would be very lucrative ambition for certain connected people without moral compass, some of them with relations in the CI Port already – or worse, we secretly agree to cede the warehousing function to China. Let’s try not to be too obvious guys.

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  5. Anonymous says:

    “Alden, I just thoughts of something else”….yeh, right…next it will be “building the port will stop hurricanes in their tracks” or “the crime rate will drop to 0% if we build the port”. All so believable.

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  6. Anonymous says:

    If the port development is intended to bring in more income to the Islands, isn’t this going to contribute to an increase in inflation rather than curb it? Economists, please chime in with your thoughts.

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    • Silent majority says:

      @3:35pm. You’re absolutely correct, as far as simple Economics is concerned. Hopefully, more goods will result in the same level of moneys (M1) chasing MORE goods, thus having the resultant impact of a downward inflation push.

  7. Anonymous says:

    Encouraging / investing in solar power can also curb inflation but I don’t see government pushing that!

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  8. Anonymous says:

    Another Government add-on to imports is the 1% insurance. This is simply stealing and of course, it artificially inflates the cost of goods. Why is Customs Dept. in the insurance business? Insuring an import should be between the importer and the freight company. If the importer chooses to insure his/her shipment, or not, that should be up to them.

    Government/Customs should NOT impose insurance!!

    Another money-grabbing measure to increase cost-of living and inflation!!!

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  9. Anonymous says:

    Mr. McTaggart, to curb inflation please challenge your Government to explore and implement other revenue sources instead of the same old ‘cash cows’ of increasing fees and duties! Then further, challenge merchants in Cayman to stop passing-on every increase to consumers. Perhaps if merchants would absorb a small percentage of increases and forfeit a small percentage of profits, the net results will benefit everyone.

    I have a 36 year old transportation business and have not increased rates since 2000, despite vast increases in fuel costs, Government fees and general cost of living increases. I guess I’m not driven by greed as much as being appreciative for the customer base which supports my business.

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  10. Anonymous says:

    The biggest cause of inflation is government (CIG) nickel and diming people to death.

    Why don’t they just set import duty at 15% or 20% or 22% or 25% and everyone would know exactly what their costs will be and set their prices accordingly?

    Has anyone ever looked at the details that a poor importer has to deal with, especially the add-ons like Port Fees, Package Tax, Warehouse Fee, Handling Fee, Trucking Charge, Inspection Fee etc. which they randomly assign at set to whatever they feel like on any given day.

    After all of the above fees have been added to the invoice then they also check Freight Charges and Insurance. Note that if the goods are not insured then they have to calculate what the insurance would have been and charge you duty on what it would have been if you had insured the goods.

    Simplify the import charges with one flat fee and save one million trees a year!

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    • Anonymous says:

      They were saving paper recently when the printer at APO did not print any customs slips for THREE weeks!

      Worst part is no one has the initiative to wonder why the parcels are piling up, people are complaining and looking for parcels they have tracked (which arrived 3 weeks before in my case).

      Best part is when you go to press the survey button (which is visible to the staff). I pressed the orange “unhappy face” and the guy at Westshore yells “Miss, you press the wrong one, you must press the green one” – “press it again” WTH???

  11. Anonymous says:

    Well turns out Roy is no better than the rest of them. Disappointed.

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  12. Anonymous says:

    LOL Roy McTaggart Just L.O.L.
    You are acting a rube. (google it)

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    • Anonymous says:

      20 years ago when the population was half of what it is now, the Govt. said get more people in Cayman and more imports, the cost of living would go down, did the cost of living went down ? NO. Higher the population, means more roads, bigger Hospitals, Prisons, Court Houses more police, Security Guards etc, etc ,etc and Govt. raises custom duties ,so the cost of living goes up, Up.

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      • Inside Information says:

        Add to that more social issues, and we’ll only feel the bad ones. Crime breeds in a crowded society when the overlords do not address it early. Money first, worry ’bout you later.

  13. Anonymous says:

    So, by Mr. McTaggart’s logic, Cayman’s imports and the factors affecting them are insular; there’s no impact of global factors such as price increases resulting from Trump’s tariffs, no impact from international transportation costs, no impact from oil prices which will surely increase now with the brewing conflict in the Gulf, etc. etc. It all hinges on a new, more efficient port in Grand Cayman!!??

    Does Roy really believe that crap??

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  14. Anonymous says:

    It’s interesting how the Ministers at the Chamber economic forum for the vested interest parties included comments on the cargo and cruise pier project. When the Finance Minister presented to CIIPA just a few weeks ago to give an update on Caymans Business Environment, GDP product and future development plans neither got even a mention…hmmm one speech for the educated and one for the fools. Hopefully financial services are paying close attention, the contribution of this proposed capital project saddling the country with enormous debt is a real concern. I have great respect for Minister Roy but he really needs to stop ‘towing’ the party line and find his real voice to demonstrate that he deserves to be re-elected.

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  15. Anonymous says:

    Mr. McTaggart you know what else could curb inflation? Duties reduction and you don’t need to build a dock for it. Just saying.

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  16. Anonymous says:

    Seems like the circus has just hired a new clown.

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  17. a former KPMG professional says:

    He is a CPA (certified professional accountant) and the former head of KPMG. His statements don’t appear to be professionally competent.
    A CPA shall have the capability of exercising professional judgment, which is the core of the CPA’s professional competence.

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  18. A lay person says:

    I’m very disappointed in Mr. McTaggart. I thought he had experience with this job. 100 percent dependence on imports is dangerous, so increasing imports is not the answer. His other statements, as mentioned in this article, also raise eyebrow, as they have no economic basis.

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    • Anonymous says:

      Wait. We ARE 100% dependent on imports. What is it besides a bit of local farmers fruit & veg and some local beef that you think a population of this size could survive on? What thing is made here that we use that is not needed to import?
      Genuinely, what are you saying? Everydamnthing here is imported.

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  19. Anonymous says:

    I love how throughout each year, the high inflation rates are published to justify whatever crap the govt is trying to convince the people to support. Yet at the end of the year, the inflation average magically always ends up at back at old standard 3%. Apparently, the way I learnt to calculate averages in school was completely wrong.

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  20. Anonymous says:

    their necks are on the line? huh…..has to deliver otherwise….

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  21. Anonymous says:

    Ah Roy you used to have integrity..what happened man?

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    • Anonymous says:

      the same thing that happens to every politician when the do not have term limits. They become corrupt. It happens little by little, you hold out as long as you can but eventually the all might dollar wins out. It start small, i little kick back here and there, they don’t get in trouble for it so whats the harm in pushing it a little further? they are told its just how government works, after a while they stand for nothing and will sell out for anything.

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      • Anonymous says:

        Truth.

      • Open on Sundays says:

        That is why I’m proud of Winston Connolly for doing his part as best he could and not becoming a career politician.

        As the saying goes, politics leads to power and power leads to corruption and for many, absolute power corrupts absolutely.

  22. Anonymous says:

    Unbelievable, a man like MR. Roy McTaggart doesn’t know anything about economics or Accounting??? You people are obviously not from Cayman Islands. If you were, you would know the McTaggart name and the history it represented in this islands history. His qualifications and career for more than 40 years. You people need to stop the false news. Any country in the world knows you need a cargo dock if you live on an island. I hope people can see the false story. They are trying to make it seem that we are idiots.

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    • Anonymous says:

      It is not that but it seems he has finally become a politician and left being a Professional.

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    • Anonymous says:

      @11:55 Of course you need a dock if you live on an island. Every time I look up from my desk I SEE A F’NING DOCK! A bigger dock means jack shyte in the fight of inflation.

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    • Anonymous says:

      11:55 pm, yes cargo dock 100 % , cruise ship dock NO 100 % . Its not necessary, there is enough cruise ship tourist walking around the water front now, its better to have more stay over tourist come by plane.

  23. Honourable Minister of Dreamland says:

    I would have probably gone with

    “Minister pulls data out of thin air”

    or

    “Minister pulls data out of his ass”

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  24. Anonymous says:

    Just goes to show you how they believe we are idiots. So spending more money to increase the size of the dock with the hopes more $5 cruise passengers are going to come and drive inflation down. 25000 more passengers each day is going to impact the islands natural resources, more sewage, more garbage which are going to increase the cost of living for the residents. Bo Bo I would like to see your theory in one of your economic books. The down side of your theory is when the haves cannot have, increase crime, bigger jails, more cops, dwindling society as the smart ones will have no choice but to go and live elsewhere i.e. the rich retired politicians.

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    • Sammeh says:

      You make yourself sound like an idiot. Let me re-read your comment to you:

      ” … more $5 cruise passengers are going to come and drive inflation down. 25000 more passengers each day … ”

      25000 x $5 per passenger a day = $125,000 per day

      Or $45 million a year. The entire port will be paid off in less time than it takes for you to buy a new car at that rate.

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      • Anonymous says:

        How in the hell does cruise passengers = driving inflation down? If that’s his argument then encourage more over night stayers who spends 100 to 200 times that amount daily and curb inflation by the end of the week. And he’s the CPA? Wow Roy you just lost my support. you honestly can’t believe what Alden, Moses or Mac gave you to read.

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      • Anonymous says:

        And you pay $300 billion to fight crime, clean up the garbage/dump, more money for the unemployment, social services, etc….., so what is your point 7.32? Seems like just another politician in the making with blinkers on! Since you have all the answers, which beach you are going to place 25,000 cruise passengers?

  25. Anonymous says:

    Firstly, I am not against improving / expanding our Port but I am not in support of the cruise piers. Now, with respect to Mr. McTaggart’s economic theory that inflation will be curbed by expanding the port to allow inflow of more goods, I think it’s flawed. There is no evidence that I can see which suggests that there are any shortage of goods. Supermarket shelves are fully stocked weekly, no shortage of building materials at ALT, no shortage of cars, no shortage of fuel etc.

    If I understand correctly, he seems to be suggesting that with a larger Port/dock, merchants will bring in more goods faster and increase their inventory of goods above demand and thereby drive down prices by having to then sell their extra inventory at a discount. That makes no sense!

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  26. Something is rotten in the state of Cayman says:

    Still waiting on the list of those hundreds of jobs that the minister and government said they would publish at the public meeting last year

    Don’t let these idiots fool you
    They will say absolutely anything to get this port through, this entire time they have been singing about tourism and George Town revitalization and now they switch to national inflation because they realize how close people are to forcibly ending this project via a referendum

    They will lie through their teeth to ensure this project happens

    It is your job as voters to not be stupid enough to fall for it

    They want to give you scraps while their donors and special interests run away with millions in contracts and kickbacks

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    • Anonymous says:

      Just look at the Kirkbot activity. They really think we are stupid. Unless they find a way for Kirkbots to vote, the politicians are in for a rude awakening at the polls.

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  27. Anonymous says:

    Are these guys idiots?

    They think that raising cargo capacity will mean that we are each going to consume (for example) more apples than we do today, this driving down prices?

    They remove stamp duty exemption for pre construction deals (which would encourage development and jobs) and then complain about a housing shortage?

    They allow foreigners to own an unlimited number of airbandb units without even needing a Trade and Business license and then complain locals are priced out of the market?

    Maybe we are the idiots. We seem to let them get away with this crap. Time to call them out.

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    • Anonymous says:

      I used to have respect for Roy. Just shot it all with one politically motivated speech. I refuse to think he believes what he just said. What a load.

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    • Anonymous says:

      “They remove stamp duty exemption for pre construction deals (which would encourage development and jobs) and then complain about a housing shortage?”

      Or so their choice of builder can bring in their materials cheaper and pocket more cash building a dock we don’t need.

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    • Anonymous says:

      Petition a vote of no confidence.

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  28. Anonymous says:

    Or you could just pressure businesses to pay their employees properly instead of jack up prices to maintain or increase only their standards of living. I can’t afford to buy almost anything I used to spend money on and 5 years ago I didn’t even look at my bank account. No idea who is buying anything in this town or having any fun except people on six figures or two incomes.

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    • Anonymous says:

      Man how lucky we will be, the new dock will solve all the problems. CHEC will be here with all the cheap labor, living in barracks and bringing in all there own supplies. Unity team has saved us all.

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  29. J|) says:

    Build the dam dock CIG you have 75% of us behind you!

    (pun intended.)

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  30. SMH says:

    Voodoo economics by the ppm.
    We hoped McTaggart was different. SMH

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  31. Anonymous says:

    A nice man spouting pure bollocks to support an expensive and unnecessary project. I expected better from you Roy looks like you are now a yes man like the others.

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  32. Anonymous says:

    It goes without saying that enhanced port facilities from what was built in 1950 is going to make our port more efficient.

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  33. Vote of no confidence for the elected officials that supportthis poor idea. says:

    Ahh put a sock in it politicians, ministers or whatever fancy title floats your dinky boat. They’re are too many locals who love their Island too much to let it continue to be raped by needless and greedy over development. Forget the cruise dock, it won’t happen because we have strong willed patriots ready to stand up for their beloved Island.

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