Premier and Minister for Financial Services and Commerce, the Hon. André M. Ebanks MP will move a Government Motion to the upcoming meeting of Parliament asking Members to support, in principle, the establishment of a Cayman Islands Sovereign Wealth Fund.
A sovereign wealth fund is a national savings and investment mechanism that allows countries to pass forward current economic strength to future generations, allowing money set aside today to grow over the long-term for the benefit of the people of the Cayman Islands. Owned by the country and managed independently from political influence, a sovereign wealth fund creates an alternative revenue stream and increases resilience against future economic shocks or natural disasters.
If supported in Parliament, the motion does not make any commitment to funding or entitlement but would authorise the NCFC government to carry out the research, consultation, due diligence and policy development required to return to Parliament with a detailed proposal, including any potential legislative requirements.
Premier Ebanks said, “The premise is straightforward. A period of economic and fiscal strength is an opportunity to save for the future. The NCFC government is looking beyond election cycles when we talk about building a stronger, fairer Cayman Islands and a sovereign wealth fund, done right, would pay dividends for many generations to come.”
Sovereign wealth funds exist in many countries and are established under a variety of rules governing how they are funded and in what circumstances capital can be withdrawn. Sovereign wealth funds are not intended to supplement ordinary spending in annual budgets and can sit alongside other national funds such as the National Disaster Fund, the Environmental Protection Fund or the potential Newborn Investment Fund in the Cayman Islands.
Mrs Julie Hunter MP, Parliamentary Secretary for Financial Services and Commerce, has been closely involved in developing the motion for a Cayman Islands Sovereign Wealth Fund and will also speak to the motion in Parliament laying out its benefits to future generations of Caymanians.
“The principle is no different for a country than for a family. We save when we are able to, and those savings compound and grow over time,” said Mrs Hunter. “A sovereign wealth fund is a way to pay forward the prosperity we enjoy today, while ensuring there are clear parameters for how the money can be utilised.”
Governance would be a central focus if Parliament gives the approval to proceed in principle. A working group of suitably qualified experts will be tasked with defining the rules on how a fund would be managed and invested, ensuring institutional distance from the government of the day and setting out the terms under which distributions could be made.
“The details are still to be settled, that’s the work that would come next,” she said. “The key question is whether we as a country believes in putting aside something today for the generations that follow.”