Small Business Recovery post Hurricane Ivan

Hon. Mckeeva Bush, OBE, JP Leader of Government Minister for Tourism, Environment, Development and Commerce

Ladies and Gentlemen:

It gives me great pleasure to speak to you this evening on the status of our economy and the important role that you, small businesses, have to play in its recovery. Hurricane Ivan passed our shores almost two months ago, and today, with visible signs of recovery, I am optimistic that we can recapture our past success.

Of the twin pillars of our economy, the financial services industry has rebounded the fastest, with the majority of companies in this sector back to regular operation. The industry continues to grow at a vibrant pace, with over 120 mutual fund registrations, and nine captive insurance companies among other registration and licensing activity since September 12th. On average, weekly registration and licensing activity has kept pace with its pre-Ivan rate

Our tourism product was hit the hardest, but thanks to the tireless efforts of both public and private sector organizations, we are already seeing signs of the return of tourism. Six cruise ships have already called at port, with a combined maximum capacity of over 16,000 passengers. While we are still limiting the number of ships in port to two per day, we expect that this maximum will be increased to three or four in the next few weeks. It is hoped that by the 20th November, in time for the American Thanksgiving holiday, that we will be able to lift all travel restrictions to Grand Cayman and welcome back stay over visitors.

These are important milestones for our economy, as they represent a resumption of commerce and a much-needed source of income, especially for many small businesses. I cannot stress enough how important this is to our economic recovery. An estimated 81% of the total number of business in the Cayman Islands have less than 26 employees, 61% with less than 11. These statistics highlight the importance of the small business sector as the backbone of our economy.

Small businesses are a source of innovation, idea generation, and ingenuity. They generate jobs that challenge their employees to be resourceful and efficient, to make do with limited resources, but not to sacrifice quality in their products and services. Small business owners are predominantly driven by the desire to 'do things better', to compete with larger rivals not just on quality, but on their flexibility and responsiveness to customer demand.

This drive and ambition, to improve their lives and their businesses through their efforts, has an immeasurable impact on our economy. New jobs, new sources of income, the availability of the latest goods and services, are all benefits to our economy and our society which are provided through the tireless efforts of the Caymanian entrepreneur.

With so much riding on the recovery of our economy, it is my deepest concern that this Government does all that it can to ensure that you, the small business owner, get back on your feet.

I know that these have been trying times for you. In addition to rebuilding your personal lives, you have had to rebuild your businesses. Dealing with the loss of electricity, trying to replace damaged furniture and equipment, standing in one line after the next. Some of you have dealt with the frustration of insurance, figuring out what to do about existing loans, wondering how you can maintain your staff, all on top of the fact that little revenue is flowing into your businesses.

I commend you for your perseverance and tenacity, and I admire the drive with which you are putting the pieces of your businesses back together. Throughout this process, keep in mind that my Ministry is ready to assist in any way that it can. We have initiated a small business assistance programme designed to address both your short- and longterm needs. This is an opportunity for rebuilding our economy stronger and better than before, and I would like to ensure that Caymanians can avail themselves of the many opportunities that may now exist.

Through our newly initiated Small Business Assistance Programme, small business owners have access to a wealth of experience in small business operations. The advice, guidance, and training will ensure that business owners have the tools to rebuild strong, viable, and successful businesses. These programmes are being offered for free through the Development Bank, and I would encourage you to contact them and to take advantage all that they have to offer through this programme.

The key piece of this programme, however, is financial assistance. As announced yesterday, the Legislative Assembly approved the issuance of a Government Guarantee for the raising of CI$10 million by way of a bond issue by the Cayman Islands Development Bank. More importantly, $3 million of this fund will be specifically earmarked to assist in rehabilitating the small business sector under the Bank's Small Business Recovery Programme.

Under this programme, a government guarantee will be available for individual loans where the small business owner is unable to adequately collaterize his/her loan at this time but has a viable business. Reliance will be placed on the government guarantee only to the extent of any collateral shortfall. The CIDB will work closely with these individuals to guide them in their recovery efforts.

While these loans will provide a much needed injection of cash into small businesses, I am also aware of the increased costs that businesses are experiencing. To help alleviate this burden, Cabinet has reduced import duty on a number of items to assist in the recovery effort. Primary among these are reductions in duty on motor vehicles, building materials, furniture and fixtures, and as of November 1st, computers and office equipment. Details on these reductions, for persons that require them can be obtained through the Small Business Assistance Programme which is currently being housed at the Development Bank.

Additionally, special consideration is being given to local businesses, on an individual basis, for the deferral of import duty on items needed for their recovery. Beginning next Monday, November 8th, the Portfolio of Finance & Economics will be accepting applications from small businesses requesting the deferral of import duty on replacement equipment not already covered by the existing concessions. Applications can only be made in respect of items yet to be imported. Applications should take the form of a written request that details the items for replacement and their costs, as well as the form of security the applicant is seeking to have accepted to cover the amount of duty being deferred. Applicants are also required to agree to a repayment schedule developed in conjunction with the Portfolio.

These are only a few of the initiatives that have been implemented to assist you in your recovery. More are in consideration and will be discussed during the course of this forum. I encourage you to participate in the panel session, take advantage of the expertise we have gathered here this afternoon, and contribute your ideas on the way forward for small business in the Cayman Islands. I am sure that with your feedback and suggestions, we can work to ensure the successful recovery of the small business sector, and thus the continued success of our country.

Last Updated: 2008-12-05