The new minister of Finance in St. Vincent and the Grenadines is maintaining the policy of the ruling Unity Labour Party against a citizenship-by-investment (CBI) programme for the country.
SVG remains the only of the five independent Organisation of Eastern Caribbean States member nations without a CBI programme, also called economic citizenship.
However, Gonsalves said that contrary to being the economic magic wand he said the opposition New Democratic Party was making out CBI to be, there is a strong correlation between CBI programmes and OECS countries having to undergo restructuring imposed by the International Monetary Fund.
Gonsalves, who became Minister of Finance last November, was responding in Parliament last Thursday to a question from opposition lawmaker St. Clair Leacock.
Leacock, who is Member of Parliament for Central Kingstown, said the Government of SVG’s position on the “elsewhere” and otherwise referred “we nah sell passports” policy with reference to CBI programmes is fully understood even though not appreciated.
“This is against the background of consistent earnings in or around half a billion Eastern Caribbean dollars per annum in the sister islands of Grenada, St. Lucia, Dominica and St. Kitts and Nevis.
“To the extent we have, in principle, rejected this large revenue stream, please explain the justification of the following budgeted schedule of local and external loans over the last 10 years: 2009 — EC$121 million; 2010–EC$144 million; 2011–EC$86 million; 2012–EC$104 million; 2013–EC$112 million; 2014–EC$169 million; 2015–EC$177 million; 2016–EC$178 million; 2017–EC$158 million; 2018–EC$148 million, all of which could have been financed from this new established sustainable source of income without being a burden on our taxpayers,” Leacock said.
But Gonsalves told Parliament that he has a “difficulty conceiving of citizenship as a financial matter.
“I think that to reduce citizenship to this crass trading arrangement does a disservice to citizens who have lived and died and fought in St. Vincent and the Grenadines.”
He said that Leacock continued to present CBI as “some sort of a panacea”.
“A few weeks ago, I was amused when he suggested that if we have CBI all the high school, all the secondary schools, maybe all the primary schools in St. Vincent and the Grenadines could have a track. Because, wave your citizenship wand and everybody get everything.”
He said that the premise of the question was that “apparently, if we wave the CBI wands, we won’t need to take out loans…
“So imagine my surprise when I see in the Antigua and Barbuda estimates for 2017, a country that has CBI … they have a bonds of 195 million, $66.9 million in CDB loans, and other loans and advances of $22.9 million.
“I don’t know why they didn’t wave their wand.”
Gonsalves said that in St. Kitts, in the 2017-18 budget, there are treasury bonds of $85 million, $257 million in bonds and other borrowing.
“I don’t know why they didn’t wave their citizenship wand. And the reason, as we well know, is that the majority of those countries have been spending their windfall on recurrent expenditure, not capital expenditure.”
The finance minister further said that what is budgeted is not what is borrowed in SVG because of implementation, human resources and issues.
“So, to quote the number is for the casual listener to then add up all this number and say, ‘O my Lord, look at all the money that they have borrowed.”
He said that in 2009, while EC$121 million was budgeted, EC$66 million was borrowed, EC$6 million, EC$80 million less than the budgeted amount was borrowed in 2011, while the EC$54 million borrowed in 2012 was EC$50 million shy of the budgeted amount and in 2017, EC$83 million was borrowed while EC$158 million was budgeted.
Gonsalves further said that while St. Kitts and Nevis has had a CBI programme since 1984, they ran up a debt to GDP ratio of over 200 per cent and ended in 2011, after their CBI programme was mature, in the hands of the IMF.
“I don’t know why they chose the International Monetary Fund and didn’t wave their CBI wand,” Gonsalves said, adding that Grenada, which reinstituted its CBI programme in 2013, went to the IMF in 2014.
Dominica, which had CBI since 1993 went to the IMF in 2002. He added that Antigua and Barbuda went to the IMF in 2010 and instituted their CBI programme thereafter.
“So, what I see here, with the exception of St. Lucia, is a strong correlation, not causation, between the International Monetary Fund and citizenship by investment programmes…
“Under the stewardship of the former minister of finance, and the current and future prime minister, we have never had to go to the International Monetary Fund to bail us out. We have not gone to the IMF. And so, the level of urgency that has driven the decision-making processes of some of our brothers and sisters have not been felt in St. Vincent and the Grenadines,” Gonsalves said.