Published by Loop Cayman
Loop catches up with local economist and financial services consultant, Paul Byles, founder of Spectrum, a policy focused financial services event, on the focus of Spectrum 2022, the industry, and his thoughts on the Cayman Islands current policy issues.
What is the focus of Spectrum this year?
The focus is somewhat varied but key topics include ESG, investment management, regulatory updates and the future of fund administration. This year’s themes continue with a strategic focus for the financial services industry by delving into some important policy issues.
How do you see the immediate future of the industry?
I remain very optimistic about our financial services industry. We continue to face challenges, many of those externally driven but the past 2 decades has demonstrated that the industry as a whole is very resilient, even if some sectors are impacted more than others. The main reason for that resilience is that the Cayman Islands has significant breadth and depth of financial services and that’s a unique feature that none of the other IFCs possess.
As an economist what would you list as the top issues for the Cayman Islands right now?
There are a few challenges, but I would say that cost of living and income inequality are high priority. As our economy has grown, we have not complemented that with the necessary institutions and framework to ensure that there is a good quality of life for the average resident. Economic growth is necessary, but we need better management of that growth, and we also need to ensure that the pace of growth is part of a more comprehensive economic development plan which includes social, educational, health and environmental factors. It is easier said than done but, in my opinion, when you look back at the past 2 decades its pretty clear we haven’t taken a multidisciplinary approach at all.
Financial services has been key to the growth you refer to. Are we benefiting sufficiently from its success?
I think we are benefiting tremendously from the growth of financial services. However, I don’t feel that we have maximized the participation of Caymanians in that industry over the years. If we consider that it is the primary driver of the economy, then its hard to understand why we don’t have more Caymanians participating in it and especially at more fruitful economic levels. There is a misconception that someone has to qualify as an accountant or attorney to be successful in the industry. But there are dozens of other career opportunities in the sector, and I don’t feel we have promoted this enough to young people. In fact, most of the career positions in financial services have nothing to do with law or accounting and many of those career options can be very fulfilling both personally and financially. I would like to see increased focus on preparing Caymanians through education and training specifically geared towards the industry, to participate at a level where most of them are not only enjoying their careers but are also financially successful as well.
What do you see as the drivers of the cost-of-living challenge?
I think the primary drivers are healthcare, utilities, and property but the structure of our economy also plays a major role as well. If you consider our consumption-based tax system, the government’s reliance on import duties as one of its key revenue sources and the fact that we import most of what we consume its inevitable that the costs of goods will continue to be very high in comparison to other systems. The issue for Cayman is not that we don’t know the source of this cost-of-living issue; its that we are not very good at addressing these types of policy issues. Healthcare, utilities, and property are very real challenges but if we took a serious look at each area, I am sure we would find solutions to these, not only for the short term, but that are also sustainable. We need to assess each area and put aside wokeness and political rhetoric and implement the most viable solutions, even if some of those solutions don’t appear politically sustainable initially.
What about your area as a career choice? What would you say to young Caymanians?
I would definitely encourage it! Management consulting can be one of the most exciting jobs because the topics you are dealing with can be diverse and to be honest no day is really the same. If you like that type of thing, then its perfect for you. In reality, most management consultants have a small number of areas that they tend to focus on but even then, you are dealing with a diverse group of clients and sometimes across several countries, so its a very interesting career option. A good grounding in economics, business or finance is good for my areas which tend to relate more to economics, strategy, and financial services but if you are interested in healthcare, human resources or the environment, there are many opportunities for you as well. We have many of the world’s accounting and advisory firms here in Cayman that have consulting departments. And of course, as in my case with FTS, you can start your own management consulting firm as well, once you have gained enough experience and are ready to make that move. I would also add that in the Cayman Islands there are many opportunities within both the private sector and government to pursue a career as an economist, where you get to apply your skillset to helping companies or policymakers to address real issues that impact your community and the country and that can be very rewarding personally as well.
What are some of the more interesting projects you have worked on over the years?
It’s hard to select a small number but I would say that on the academic side one of the most interesting things I’ve been involved with is my research into the relationship between the financial services industry and economic growth which I carried out while at the University of Surrey. I also drafted a five-year economic plan for the Cayman Islands government many years ago and that was very interesting because of the hundreds of community stakeholders that were involved. Unfortunately Hurricane Ivan hit us right after that plan so it became largely irrelevant because the country’s focus for the next 5 years was clearly on recovery. I was also very involved in creating an inward investment framework for the Cayman Islands when the previous investment bureau was established and that included travelling other countries to see how other investment bureaus operated so that was also great project to be involved with. As I said there are many others so it’s really hard to choose!
Finally, what should people look forward to at this year’s Spectrum?
I think the discussion format and involvement of the country’s key financial services stakeholders this year will give all attendees excellent insight into the current state and future of our financial services industry. And even better, as an attendee you can participate in that discussion by asking questions and interacting with these stakeholders on the day.