Jersey (officially the Bailiwick of Jersey, a British Crown Dependency) has no public debt, a balanced budget, 100% employment of its roughly 100,000 residents, and in turn is able to provide high quality public services like education and healthcare.
Jersey is very successful at what it does; so, the question is how did it get to where it is?
Colin Powell is the man to ask. Not to be confused with Colin Powell, the former U.S. Secretary of State and retired four-star Army general, this Colin Powell has been Jersey’s Economic Advisor (JEA) since 1969.
We were privileged to meet with Mr. Powell at the Jersey Finance building to tap into his wealth of knowledge.
Mr. Powell stated, “In the early days we made the conscious decision to be an International Financial Center for the long term, and to do so, high standards and quality were necessary.”
Being an IFC for the long term meant that if an investor came in with what looked like a great opportunity, Jersey would not change its laws or policies but would think about the long term effects of any possible transaction.
The term “financial market” encompasses many types of business sectors. While Jersey might be viewed as having a single dominating industry, the financial market, they are not susceptible to economic failure as easily as one might think because the financial market has so many facets. In fact, Mr. Powell informed us that because of Jersey’s success, it has been able to keep a Strategic Reserve that has now reached an amount capable of keeping Jersey up and running for an entire year if the outside economy came to a complete stop.
At around 30,000, the island has a relatively low number of incorporators because of Jersey's high standards. One reason is that Jersey requires a declaration of the ultimate beneficial owner, and for incorporators that would rather not declare, there are other jurisdictions that do not enforce that issue like Jersey does.
Banking is an attractive industry because of economic and political stability, handling about 115 billion pounds. Fund Management is very large with 1,200 registered funds, totaling 260 billion pounds. Trusts bring in about 500 billion pounds, again because of Jersey’s reputation for stability and security. The finance market employs 13,000 people in Jersey and makes up about 40% of Jersey’s direct national income, but the indirect effect is much more.
In addition to the finance industry, Jersey has a long history of agricultural production. Jersey Island is the namesake and original breeder of well-known Jersey dairy cattle. Like Jersey's financial sector, Jersey cattle also have a reputation for high standards and quality. The breed is popular for low maintenance and the high butterfat content of its milk. We enjoyed a lot of real Jersey ice cream!
In closing, Mr. Powell reiterated what we learned from many of our other speakers: Reputation is crucial.
We would like to thank Mr. Powell and Jersey Finance for inviting us to your beautiful island to learn about Jersey as a renowned International Financial Center.