In News:

A magnitude 7.6 earthquake recently struck the Caribbean Sea southwest of the Cayman Islands, as reported by the U.S. Geological Survey. While no tsunami warning was issued, tremors were felt across the region, and assessments of damage are ongoing.

Geographical and Geopolitical Overview

• The Cayman Islands is a British Overseas Territory located in the western Caribbean Sea, south of Cuba and northwest of Jamaica.
• It comprises three islands:
  • Grand Cayman (largest and most populous)
  • Cayman Brac
  • Little Cayman
• The islands are part of the Cayman Ridge, an underwater mountain range, with the islands themselves being the emergent peaks of this ridgeline.
• Area: Only 264 sq. km
• Capital: George Town, located on Grand Cayman
• Official Language: English
• Currency: Cayman Islands Dollar (KYD)
• Ethnic Composition:
  • Afro-European: 40%
  • African: 20%
  • European: 20%
  • Other: 20%

Seismic and Climatic Features

• The islands are near the Cayman Trench, a deep subduction zone formed by the interaction between the North American and Caribbean Plates.
• Although major earthquakes are rare, the region is seismically active, and moderate to high seismic events are possible, such as the recent 7.6 magnitude quake.
• Climate: Tropical marine with a distinct wet and dry season; vulnerable to hurricanes, especially during the Atlantic hurricane season (June–November).

Ecological Significance

• Known for crystal-clear waters, coral reefs, and white sand beaches, the Cayman Islands are a global hub for marine biodiversity.
• Key ecological features include:
  • Coral reefs, seagrass beds, and mangroves
  • Famous dive sites like the Great Blue Hole and Bloody Bay Wall
• Terrestrial biodiversity is limited due to the islands’ small limestone-based land area, but they are home to endemic species such as the Grand Cayman Blue Iguana, which has recovered from critical endangerment through conservation efforts.

Economic Importance: A Global Financial Hub

• The Cayman Islands is renowned as a major offshore financial center and global tax haven.
• Zero taxation: No corporate, income, or capital gains tax
• Home to:
  • Offshore banks
  • Hedge funds
  • Multinational corporations
• The islands offer a favorable regulatory environment and strict financial confidentiality laws, although they now comply with international transparency norms.