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Diplomacy in Action

Cayman Islands (10/04)


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For the most current version of this Note, see Background Notes A-Z.

Flag of Cayman Islands is blue, with the flag of the United Kingdom in the upper hoist-side quadrant and the Caymanian coat of arms centered on the outer half of the flag. 2004. 

PROFILE

OFFICIAL NAME:
Cayman Islands

Geography
Area: 259 sq. km. (100 sq. mi.) on three islands: Grand Cayman (76 sq. mi.), Cayman Brac (14 sq. mi.), and Little Cayman (10 sq. mi.).
Capital: George Town (pop. 15,000).
Terrain: Flat.
Climate: Tropical.

People
Nationality: Noun and adjective--Caymanian(s).
Population (2004 est.): 43,103
Annual growth rate: 2.71%.
Ethnic groups: Afro-European 40%, African 20%, European 20%, other 20%.
Religious Affiliations: United Church, Anglican, other Protestant, Roman Catholic.
Language: English.
Education: Years compulsory--to age 16. Literacy (age 15 and over)--98%.
Health: Infant mortality rate--8.41/1,000. Life expectancy—79.8 yrs.
Work force: 20,000.

Government
Type: British Overseas Territory.
Constitution: 1972; called the Cayman Islands Order.
Branches: Executive--Governor and President of the Executive Council (representing British monarch), Executive Council. Legislative--unicameral Legislative Assembly (15 elected, three appointed members). Judicial--Summary Court, Grand Court, Cayman Islands Court of Appeal, Her Majesty's Privy Council. Subdivisions: Eight districts.
Political parties: No formal political parties.
Suffrage: Universal at 18.

Economy
GDP (2002 est., purchasing power parity): $1.27 billion.
Growth rate: 1.74%.
Per capita income (2002 est., purchasing power parity): $35,000.
Natural resources: Scenic beaches and underwater attractions, favorable climate.
Agriculture: Products--Minor production of vegetables and livestock, turtle farming.
Industry: Types--tourism, banking, insurance and finance, construction.
Trade: Exports(1999)--$1.2 million: turtle products, manufactured consumer goods. Major market--United States. Imports(1999)--$457.4 million: machinery, manufactures, food, fuels, chemicals. Major suppliers--U.S., Trinidad and Tobago, U.K., Netherlands Antilles, Japan.
Official exchange rate (Nov. 2003): CI $0.82=U.S.$1.

HISTORICAL HIGHLIGHTS
The Cayman Islands remained largely uninhabited until the 17th century. A variety of people settled on the islands, including pirates, refugees from the Spanish Inquisition, shipwrecked sailors, deserters from Oliver Cromwell's army in Jamaica, and slaves. The majority of Caymanians are of African and British descent, with considerable interracial mixing.

Great Britain took formal control of the Caymans, along with Jamaica, under the Treaty of Madrid in 1670. Following several unsuccessful attempts, permanent settlement of the islands began in the 1730s. The Cayman Islands historically have been popular as a tax haven. Legend has it that Caymanians in 1788 rescued the crews of a Jamaican merchant ship convoy which had struck a reef at Gun Bay and that the Caymanians were rewarded with King George III's promise to never again impose any tax.

The Cayman Islands, initially administered as a dependency of Jamaica, became an independent colony in 1959; they now are a self-governing British Overseas Territory.

ECONOMY
Although Caymanians enjoy one of the highest standards of living in the world, about 90% of the islands' food and consumer goods must be imported.

From the earliest settlement of the Cayman Islands, economic activity was hindered by isolation and a limited natural resource base. The harvesting of sea turtles to resupply passing sailing ships was the first major economic activity on the islands, but local stocks were depleted by the 1790s. Agriculture, while sufficient to support the small early settler population, has always been limited by the scarcity of available land.

The advent of modern transportation and telecommunications in the 1950s led to the emergence of what are now considered the Cayman Islands' "twin pillars" of economic development: international finance and tourism. In 2002, there were more than 40,000 companies registered in the Cayman Islands, including 600 banks and trust companies. Forty-three of the world's largest banks are present in the Cayman Islands.

Tourism represents about 70% of gross domestic product and 75% of total export earnings. Unspoiled beaches, duty-free shopping, scuba diving, and deep-sea fishing draw almost a million visitors to the islands each year.

Education is compulsory to the age of 16 and is free to all Caymanian children. Schools follow the British educational system. Ten primary, one special education, and three high schools are operated by the government. In addition, there is a technical school, a law school, and a community college.

GOVERNMENT AND POLITICAL CONDITIONS
The Cayman Islands' physical isolation under early British colonial rule allowed the development of an indigenous set of administrative and legal traditions which were codified into a Constitution in 1959. Although still a British Crown Colony, the islands today are self-governed in nearly all respects. The Constitution, or Cayman Islands Order, that now governs the islands came into effect in 1972 and was amended in 1984.

The Cayman Islands' political system is very stable, bolstered by a tradition of restrained civil governance, sustained economic prosperity, and its relative isolation from foreign policy concerns by virtue of its colonial relationship with the United Kingdom. Public discussion revolves around public sector expenditure and social services, the pace of additional economic development, and the status of the large foreign national community on the islands.

Government Structure
Cayman Islands form a British Overseas Territory with a large measure of self-government. The present constitution, which came into effect in 1972, provides for a system of government headed by a Governor, a Legislative Assembly, and an Executive Council, which administers the islands. The Governor is recruited from the U.K. Government Service, serves as the British government administrator, and retains responsibility for the civil service, defense, external affairs, and internal security. The Governor also chairs the Executive Council and appoints to the Council the Chief Secretary, the Attorney General, and the Financial Secretary, while the Legislative Assembly elects the Council's other five members. Unlike other Caribbean Overseas Territories there is no Chief Minister but a Leader of Government Business. The Leader of Government Business is an elected politician, while the Chief Secretary is the most senior civil servant. Currently, the Leader of Government Business is also the Minister for Tourism, Environment, Development, and Commerce.

Responsibility for defense and external affairs resides with the United Kingdom; however, the Chief Secretary has the portfolio for external affairs, and the Cayman Government may negotiate certain bilateral matters directly with foreign governments. The elected members of the Executive Council divide the remaining administrative portfolios.

The 18-seat unicameral Legislative Assembly is presided over by an independent speaker. Elections are held at the discretion of the governor at least every 4 years. Members of the assembly may introduce bills, which, if passed, are then approved, returned, or disallowed by the Governor. The U.K. Government also reserves the right to disallow bills approved by the Governor.

The four-tiered judicial system is based on English common law and colonial and local statutes. The Cayman Islands Court of Appeal is the highest court on the islands, but Her Majesty's Privy Council sitting in London may hear a final appeal.

Political Coalitions
Political parties have operated infrequently in the past, and public officeholders tend to be independents. Since the 1970s, groups of candidates have organized themselves into ad hoc coalitions called teams and run on platforms of shared concerns. In November 2000 elections, voters ousted the leader of the government and two other ministers because of legislation enacted to weaken bank secrecy. Seven new members were elected to the Legislative Assembly.

Principal Government Officials
Head of State--Queen Elizabeth II
Governor--Bruce Dinwiddy, since May 2002
Leader of Government Business--The Honorable McKeeva Bush, since December 2001

The Cayman Islands are represented in the United States by the United Kingdom Embassy at 3100 Massachusetts Avenue, Washington DC 20008; tel: 202-462-1340; fax: 202-898-4255.

The Cayman Islands Department of Tourism, with offices in Miami, New York, Houston, and Chicago, also may provide travel information.

U.S.-CAYMANIAN RELATIONS
Although the United Kingdom is responsible for the Cayman Islands' defense and external affairs, important bilateral issues are often resolved by negotiations between the Cayman Government and foreign governments, including the United States. Despite close historic and political links to the U.K. and Jamaica, geography and the rise of tourism and international finance in the Cayman Islands' economy has made the United States its most important foreign economic partner. Following a dip in tourists from the United States after 9/11, about 500,000 U.S. citizens traveled to the Cayman Islands in 2002; some 10,000 Americans are resident there.

For U.S. and other foreign investors and businesses, the Cayman Islands' main appeal as a financial center is the absence of all major direct taxes, free capital movement, a minimum of government regulations, and a well-developed financial infrastructure. The Cayman Islands is the world's fifth-largest financial center.

With the rise in international narcotics trafficking, the Cayman Government entered into the Narcotics Agreement of 1984 and the Mutual Legal Assistance Treaty of 1986 with the United States in order to reduce the use of its facilities for money laundering operations. In June 2000, The Cayman Islands was listed by multilateral organizations as a tax haven and a non-cooperative territory in fighting money laundering. The country's swift response in enacting laws limiting banking secrecy, introducing requirements for customer identification and record keeping, and for banks to cooperate with foreign investigators led to its removal from the list of non-cooperative territories in June 2001.

U.S. Representation
The United States does not maintain diplomatic offices in the Cayman Islands. Diplomatic relations are conducted through the U.S. Embassy in London and the British Embassy in Washington, DC.

The Cayman Islands are, however, part of the consular district administered by the U.S. Embassy in Kingston, Jamaica. Inquiries regarding visas to the U.S. or other consular matters should be directed to the consular section of the U.S. Embassy, 2 Oxford Road, Kingston 5, Jamaica; tel: 876-929-4850; fax: 876-935-6019. There also is a U.S. consular agent, Gail Duquesnay, in the Cayman Islands to assist in providing services for American citizens--tel: 345-945-1511; cell: 345-916-7326.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program provides Consular Information Sheets, Travel Warnings, and Public Announcements. Consular Information Sheets exist for all countries and include information on entry requirements, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the country. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Public Announcements are issued as a means to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Free copies of this information are available by calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-on-demand system: 202-647-3000. Consular Information Sheets and Travel Warnings also are available on the Consular Affairs Internet home page: http://travel.state.gov. Consular Affairs Tips for Travelers publication series, which contain information on obtaining passports and planning a safe trip abroad, are on the Internet and hard copies can be purchased from the Superintendent of Documents, U.S. Government Printing Office, telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225. For after-hours emergencies, Sundays and holidays, call 202-647-4000.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service representatives and operators for TDD/TTY are available Monday-Friday, 8:00 a.m. to 8:00 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register their travel via the State Department's travel registration web site at https://travelregistration.state.gov or at the Consular section of the U.S. embassy upon arrival in a country by filling out a short form and sending in a copy of their passports. This may help family members contact you in case of an emergency.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more.

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.

STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.



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