Wednesday, November 3, 2010

Cargo Cult (Cayman's education failure)

An alarming number of born-and-bred Caymanians seem to believe that our Offshore tax-haven could survive the replacement of all (or almost all) its expat administrators by born-and-bred Caymanians.

“How difficult can this work be? Most expats have to be trained by Caymanians anyway, on half the salary. Those who criticise Cayman, send them home and let our people do the work themselves.”

Well, no. Some Caymanians are sophisticated and experienced enough to work in senior positions in the tax-haven industry, yes, but not nearly enough. The rest of them are wishful thinkers. 

Nearly thirty years ago my wife and I worked and lived in an archipelago in the South Pacific. One of the islands was Tanna, famous for being the home of a strange local cult dedicated to the worship of a Messiah they called “John Frum”. The cult was invented by some groups of native Melanesians as a way of explaining the appliances, cars and heavy machines, and the planes that carried them, introduced to the islands by white invaders – especially American support troops during the Pacific War of 1941-45. 

With no concept of how those products came into existence, the cult ascribed their presence to magic – pure and simple. Their former belief-system was abandoned as false (since it had failed to account for the machinery), and the villagers bent their minds to understanding how the magic worked. If they could discover the trick, they could conjure up the products without the intervention of any foreigners. When the Americans went away (promising to return, as Americans do) they left behind the fruits of their magic, which they had called “cargo”. The villagers tried to maintain the equipment, the way they had been taught. How hard could it be, after all?

They failed, and have ever since waited patiently for their man to return and disclose the magic formula. In 1972 the village we visited had a mock airstrip and a mock plane, and they met every so often to check whether John had snuck up on them overnight. As they learnt from the Christian missionaries, a few decades is not a long time to wait for the return of a Messiah. 

Many in Cayman are on the cusp of following the same path, in respect of our tax-haven. Those who have worked beyond the narrow confines of Cayman know there is no magic involved. But those who believe that tax-haven expertise can be picked up from a few evening classes at UCCI might as well be in a cargo cult. It beggars belief that our politicians pay so much attention to the anti-expat lobby at this pivotal moment in our economic history. Yes, the lobby commands a great many voters; but it is pursuing an obviously lost cause. Pursuing lost causes is a distraction we can’t afford. 

Our Offshore industry is reeling under an onslaught from the governments of high-tax nations. Our rulers must somehow find the courage to defy the cultists of the anti-immigrant lobby. Even the government of that South Pacific archipelago (called Vanuatu, today) resists the demands of its local cargo cult; why can’t our government resist the demands of ours?

Sometimes it seems as though our MLAs would rather rule a broken and busted Cayman than not-rule a prosperous one. They turn a blind eye to the slow drift toward the exits, of Offshore professionals and other middle-class immigrants. It’s never easy retreating under fire, so there will be no fuss or fanfare from the departing expats. After all, they have cars and houses to sell, and they want good prices for them. We who remain will have to live with the damage wreaked by the cult.

Good luck to us.