An independent report published last Friday (June 1) provides further evidence of the Isle of Man’s positive contribution to the global economy.
The Economic Research Report, commissioned by the Isle of Man Government and produced by Ernst & Young LLP, describes the Island as a key commercial partner that delivers many benefits to the international community, to the UK, and City of London in particular.
The report finds compelling evidence of this contribution by showing that the Island provided $38.9 billion in net financing to the UK in the second quarter of 2011, according to Bank of England statistics.
The Island’s progression from a largely rural economy into a diversified and thriving International Business Centre (IBC) is highlighted, along with its position at the forefront of regulatory standards.
The report also counters critics who claim that IBCs cause distortions in the global economic and financial system, saying a large body of independent research has ‘strongly proved the opposite is in fact true.’ It adds: ‘IBCs play a key role in contributing to investment, employment and growth in neighbouring countries in particular, and the global economy in general.’
The Ernst & Young report is based on a robust and independent analysis of the facts and data, and the results of a series of interviews with key stakeholders.
The findings provide solid evidence that the Isle of Man is a responsible and transparent country that benefits the UK and emerging world markets.
Chief Minister Allan Bell MHK said: ‘This report provides an objective view of the Isle of Man’s economic strengths and the significant contribution we make to the global economy. It also emphasises the Island’s vital role, particularly since the credit crunch of 2008, as a provider of financial flows to UK and international markets in three main areas: liquidity, listed companies and investment.’
He added: ‘One of the overriding conclusions from the report is that the UK and Isle of Man benefit from each other’s success, and it is in the best interests of the UK to see the Island do well. This is a message we will continue to deliver to UK Government Ministers, MPs and business leaders in Westminster and the City of London.’
The report charts the Isle of Man’s ‘remarkable’ transformation, from an economy based on agriculture, tourism and fishing, with unemployment exceeding 10%, into a dynamic IBC with per capita income higher than the EU average.
It says the main driver behind 28 years of unbroken growth has been the Government strategy to support the diversification of the economy into high value added sectors such as advanced engineering and Information and Communications Technology (ICT).
The broadening of the Island’s business base, combined with the development of an intelligent regulatory framework aligned to international standards, has also helped to mitigate the impact of the international financial crisis.
The report identifies the resilience of the Isle of Man economy as providing significant benefits to the City and UK during a period of unprecedented turmoil.
‘The Isle of Man has outperformed many IBCs in the provision of liquidity over the past years and in particular during the financial crisis when liquidity was most needed in the UK financial markets. The Isle of Man’s role in supporting the UK economy’s growth and its financial sector is often underestimated. A reduction of this role is very likely to lead to unintended negative consequences, which might be overlooked by policy decisions,’ according to the report.
