Cayman Islands, Central America
During his voyage to the Caribbean in 1503, Columbus reached the Cayman Islands, which he christened “Las Tortugas” (turtles) due to the presence of many turtles on the islands. The archipelago consists of Gran Cayman, Cayman Brac and Little Cayman, and is surrounded by coral reefs.
A short time later the islands came into French possession, or rather the French pirates’ possession, which a historian painterly called “the fathers of French colonialism in the West Indies”. Without exaggeration, it can be found that the Cayman Islands were the most important base of the southern pirates in the Caribbean for most of the 17th century.
The first permanent colonial settlement was established on the island of Gran Cayman, and the majority of its residents came from Jamaica. It was not until 1833 that the residents began to take an interest in the other two islands. The conflicts between the European powers also affected the Caribbean and especially the Cayman Islands. As Jamaica was therefore entrusted with the British crown under the Madrid Treaty in 1670, it was decided that Cayman should be part of Jamaica. This dependency relationship was maintained until 1959, when the archipelago became an independent British territory.
In 1972, a new constitution came into force, which conferred local autonomy on the islands. The governor is appointed by the British Crown and is responsible for defense, foreign relations, internal security and some social arrangements. There is also a local government and 12 members of the Legislative Assembly.
The Cayman Islands only have few natural resources, besides the beaches and the sea which are highly valued by the tourists. Besides the breeding of turtles, local industry and agriculture meet only the domestic needs. Cayman’s residents are skilled sailors, and the country has an important source of income in the money the sailors send home.
Tax exemption has resulted in a large number of banks and management companies setting up offices in the country. In 1987, 515 banks were registered in the Cayman Islands which is a country located in Central America According to Countryaah.
A quarter of the economically active population works in tourism. The archipelago’s hotels have a total of 5,200 beds. The increase in the number of visitors has attracted a significant emigration, which in 1988 made up 35% of the population. In 1989, the archipelago was visited by 618,000 tourists. On the other hand, the fishing industry suffered a severe setback this decade, which it has not yet recovered from. In the islands, turtles have begun to breed instead of capturing them before.
The Cayman Islands are firmly on the agenda of the UN Decolonization Commission, which protects the peoples’ right to self-determination and independence. Nevertheless, there is no stronger demand for changes in the agreements with the British krone in the country. When the Malvinas War broke out in 1982, the islands contributed $ 1 million to finance Britain’s war on Argentina.
In August 1991, McKeeva established Bush as an adjunct member of the Democratic Progressive Party (DPP) – the first political party in the country in decades. The DPP wants changes to the country’s legal status. It is currently considered as dependent territory of the United Kingdom. DPP is working for a change to the Constitution that will entail:
- a multi-party system is created
- increase in the number of government members
- the introduction of a prime ministerial post
- increase in the number of members of the legislative assembly to 15
- the governor gets the title of president of the extended government
The BCCI banking scandal in 1991 highlighted the conditions of banking and financial speculation from the islands. In the same year, 5 countries initiated efforts to close the BCCI due to the bank’s systematic fraud activities. The bank’s two main offices in Luxembourg and the Cayman Islands were subject to tax exemption and an extensive banking secret.
In January 1996, a major Mexican drug dealer was arrested. He controlled the third most important supply channel for cocaine for the United States. The arrest revealed the banks in Cayman’s participation in the laundering of drug dollars from Texas during their journey to banks in Switzerland.
In 1997, the government was forced to abandon the printing of additional taxes otherwise budgeted. This was due to strong pressure from public opinion.
In January 1998, the government denied 910 gay tourists – predominantly from the United States – from boarding their cruise ship. The rationale was that they “did not meet the necessary conditions for conduct”. The British Government understood that it did not share this “discriminatory” practice.
On May 5, 1999, 47-year-old Peter Smith took over as governor.
In June 2000, Cayman was put by the OECD on the black list of countries that do not do enough to prevent money laundering. The country was only removed a year later when it had tightened its control over financial flows in and out of the country.
In February 2002, it was discovered that the North American energy group Enron used about 700 companies registered in Cayman to avoid paying taxes to the United States federal government. In April, the Cayman government signed an agreement with the United States on the exchange of tax information, with a view to unveiling the tax-dodging North American businesses.
In 2003, Cayman was embroiled in the Italian Parmalat scandal, which was missing $ 4 billion. euro in its accounting. It became the biggest financial scandal in Cayman this year. Bank of America declared a Parmalat document false. The document claimed there were $ 3.95 billion US $ on an account of Bonlat Financing Corp registered in Cayman.
In September 2004, Hurricane Ivan hit Cayman Island hard before continuing toward Cuba. The hurricane was a category 4 hurricane and extremely dangerous. It cut off the water and electricity supply on large parts of the island, and the stores were subsequently closed.
The hurricane also caused the parliamentary elections to be postponed to May 2005. By this, the opposition party got the Progressive People’s Movement (PPM) 9 out of 15 seats in parliament, the government party 5 and the last seat fell to an independent candidate. Three out of five sitting ministers lose their seats in parliament. The ruling party suffered its staggering defeat after waging a highly personal-oriented election campaign, rather than focusing on the issues the people were interested in: security, the economy and education. PPM chairman, Kurt Tibbetts, was appointed as the head of government.
In July 2007, Head of Government Kurt Tibbets published the results of a study of the former government’s financial activities. Acc. Tibbets required some of the previous administration’s agreements and contracts to be investigated by the legal authorities.
The Cayman Islands have continued to be tax havens, and in May 2009, US President Barack Obama specifically referred to the island as a tax haven and that the United States would work to get that kind of closure.
Also in May 2009, a referendum was passed that adopted a new constitution that gave the island more extensive self-government in relation to Britain. The November parliamentary election was won by the opposition whose leader, McKeeva Bush took over as prime minister.
The UDP government fell in December 2012 when it lost a vote of confidence. A new interim government was formed consisting of UDP members and UDP outbreakers who had formed the Peoples National Alliance (PNA). In the May 2013 parliamentary elections, the UDP suffered a staggering defeat, declining from 9 to 3, while Peoples Progressive Movement (PPM) rose from 5 to 9. Therefore, PPM could form a new government with its leader Alden McLaughlin as prime minister. Former Prime Minister Julianna O’Connor-Connolly used the election to change party to the new government party, which gained a majority.
Cayman remains one of the world’s most important financial centers, whose primary purpose is to act as a tax haven and as a center for money laundering from criminal operations. Cayman is only surpassed by Switzerland.