Chief Minister Tony Brown used the first Isle of Man dinner for business hosted at the City of London's iconic Mansion House to reaffirm the Island's economic strengths in these current turbulent financial times.
Mr Brown after outlining the Island's quarter century of continuous economic success, told his audience – which included a number of prominent UK politicians – the most important question now was 'what kind of international finance and business centre would survive in the years to come?'
Future global success
Mr Brown said: 'The successful centre of the future will have a diverse and robust economy, offering a full range of wealth management and other services to global clients.
'It will show skill and foresight in navigating international challenges and developing new opportunities.
'It will be respected in commercial and political circles as a country both economically enterprising and internationally responsible. The Isle of Man is such a place,'.
He went on to set out the Island's central ethos of 'quality' and an adherence to international business standards and ethics.
Mr Brown continued: 'We all have to learn from and adapt to economic conditions to survive, and this is especially so during such periods as those we currently face. As a small nation, the Isle of Man recognises and has previously risen to such challenges, and it is this that gives me cautious optimism that we will continue to do so.
Essence of strategy
- 'In essence, the policy of the Isle of Man Government is to be both internationally responsible and economically competitive. Our taxation strategy is to comply with changing international standards on information exchange and preferential treatment, while lowering the standard rate of tax for business.
- The Isle of Man has had one of Europe's fastest growing economies in recent years led by the financial services industry. Business is attracted by our competitive tax regime, professional expertise and sound regulation – coupled with a supportive government and world-class infrastructure.
'New growth areas include e-commerce, film production, international shipping, aircraft registry, and space and satellite business. While more traditional sectors, like high-tech engineering, manufacturing, agriculture and tourism – including the world famous TT Races – are still important to the economy. This diversity of services and opportunities is one of the key factors in making us, as a small Island, unique.
'The financial services sector has been the main driver of the Island's remarkable economic expansion over the past 25 years,' Mr Brown pointed out. 'We have been one of the strongest growing economies in Europe with real growth averaging 8% a year over the last decade.'
Mr Brown explained that latest national income figures showed this growth being replicated throughout the whole economy with GDP rising to over £1.8 billion, representing a growth rate of 7.7 % in real terms. As a result, the Island's per capita income was now 18% higher than the UK and 24% higher than the majority of countries in the EU.
Year on year growth
He went on: 'Whilst competitor jurisdictions have noted contraction in assets under management, we have seen continued growth year on year, with record bank deposits in the region of £54 billion and funds under administration of US$58 billion reported this month. - And it is a business we have fought hard for and won in a very competitive market.
'In the year ahead we expect growth will slow somewhat, but we believe we remain well placed to weather the storm,' added Mr Brown. 'One of the key elements of our success has been the close partnership developed on the Island between Government and business, which has ensured the Island remains both competitive and innovative.'
Mr Brown said the Island had gained endorsement from the IMF and others for the quality of its regulatory regime and cooperation in combating international financial crime. In addition, the Isle of Man has retained it's 'AAA' sovereign credit rating from Standard and Poor's and Moody's for the past five years.
He also pointed out that the Isle of Man was a 'constructive and pragmatic' partner in the OECD Global Forum on Taxation, and acknowledged by the OECD as a 'responsible international finance centre'. Of the 27 TIEAs (tax information exchange agreements) in existence a total of eleven had already been signed by the Isle of Man.
'Model for other countries'
'In fact, the Secretary General wrote to congratulate the Isle of Man for implementing its commitment to improve transparency and to establish effective exchange of information agreements with OECD countries. He also commended our ''innovative international approach'' hoping that it would serve as a model for other groups of countries.'
The Chief Minister concluded that the Isle of Man distinguished itself as a business centre that was both competitive and responsible and greatly valued its 'key partnership' with the City.
The Isle of Man has been ranked first in the world as a platform for non-UK companies floating on AIM, the Alternative Investment Market 100, with Isle of Man companies representing a total market capitalisation last year of seven billion pounds.
'Receiving as we do a substantial percentage of business each year from our banking deposits and our funds under administration from all around the globe, the Isle of Man is proud to be a significant gateway to the City of London.'
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