Financial Services Minister Hon Wayne Panton is assuring that investments in Cayman will not be adversely affected as the UK moves forward with executing its mandate to leave the European Union.
“I think in by and large we are in a good position. I do not think we are threatened in terms of a lack of investment and the evidence clearly indicates there are a lot of people interested in investing here,” Mr Panton declared.
Minister Panton made the point as he, together with Premier Hon Alden McLaughlin, appeared on Radio Cayman’s “For the Record” talk show with Orrett ‘OC’ Connor on Monday (25 July).
The Minister, in response to concerns from callers that Cayman could experience negative economic fallout from Brexit, said he believes the contrary could happen and the UK exit could be yield some positives for this country.
“There are opportunities that are presented by a jurisdiction that is now well run, that has great finances, the government is very stable and it is perceived as a place you would want to invest and do business and clearly we do have a lot of interest for those reasons,” Mr Panton contended.
He explained that the UK is facing their own issues with Brexit and the prospect of significant impact and they are going to suffer some economic declines which is already evidenced.
However, he said he does not think the impact of what will happen in the UK will “necessarily translate into significant impacts globally, but obviously we have to see how these things play out.”
On Monday new UK Prime Minister Theresa May, according to the BBC, met with Conservative MEPs (Members of the European Parliament) to discuss “the red lines in negotiations about the UK’s EU exit.”
Tory MEPs’ leader Syed Kamall, in the BBC report, said “there would be months of preparation before the formal exit process began.”
The BBC report pointed out that the “free movement of people is one of the core principles underpinning the union.”
Minister Panton pointed out that coupled with the UK/EU exit there are a lot of other significant global issues such as the US election “which is quite contentious” and terrorism.
With the value of the British pound falling globally Minister Panton was also questioned on the value of the Cayman dollar and its stability.
He pointed out that the Cayman dollar does not float freely as it is pegged to the US dollar.
However, he hastened to add that if there was devaluation or a significant impact against the US dollar then that would affect Cayman and the purchasing power of the local currency internationally.
“But I do not think there is a significant risk. The US dollar has been very strong. It is effectively the reserve currency of the world. So, whenever there is uncertainty going on people typically float to the US dollar and that is very convenient to us to be pegged to the US dollar,” he added.
Immigration was another issue which was raised with the Premier and Minister Panton by callers to the talk show.
However, Mr Panton said immigration issues remain uncertain at this stage.
“Currently we are a British citizen, that makes us an EU citizen as well and we have the ability of free movement in the EU and the ability to live and work there. That is likely to change to some extent, we do not know exactly what it is,” he said.
The EU has four freedoms they value, he said, among those are the ability to have a single market, movement of capital and movement of immigration.
Immigration, he said, was a “significant issue” driving Brexit and “that may well have a significant impact on our ability or freedoms we have as an overseas territory. We will have to see how that works out.”
The issue was also discussed at length at the recently concluded pre-JMC in TCI.
The OT leaders, including Premier McLaughlin, all agreed that Brexit is an “important area that needs urgent attention” and agreed to have it placed on the agenda when the full Joint Ministerial Council (JMC) meets later this year.
The leaders also received assurance Richard Wood, Head of the European Union Department at the Foreign and Commonwealth Office, that they will not be left out of the loop as Britain with its EU exit.
He told the leaders the UK will consult with them as Brexit talks continue and confirmed that the UK would ensure a consultative process will be put in place between the United Kingdom and the Overseas Territories.
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