Opposition Leader Godwin Friday has made yet another case for the re-introduction of a citizenship by investment (CBI) programme in St. Vincent and the Grenadines.
“Mr Speaker, you think the Caribbean benefits from CBI? We are small fry compared to the big players. We get millions of dollars, they earn billions. And you think they are going to cut their own throat on that?” he said during the budget debate last week.
“Spain and Portugal, Malta, Cyprus, Austria. These are much larger players than the Caribbean. Billions! And, in fact, the estimates are that this programme, notwithstanding the concerns that may be raised in some circles, is actually growing rapidly annually because there is a demand for those services. Pride comes before a fall, Mr. Speaker. We could have been benefitting from this programme for a long time,” the opposition leader told lawmakers.
St. Vincent and the Grenadines remains the only member of the Organisation of Eastern Caribbean States without a CBI programme.
Prime Minister Ralph Gonsalves rescinded the nation’s programme soon after his Unity Labour Party administration came to office in 2001.
He said CBI would never be reintroduced under his government, saying it amounts to selling passports.
But Friday said:
“You want to tell me St. Lucians are not patriotic, they don’t love their country? Dominicans, the Grenadian government and people who have embraced these programmes because they see the benefits that can be derived from it? The Antiguans and Kittitians, they would put up with it for so many years if they didn’t see that this would be beneficial to their country?”
Friday said SVG can build a modern medical centre from one or two years’ earnings from a CBI programme.
He listed the ways in which other OECS nations are benefitting from the programme.
In the meantime, the Ralph Gonsalves Unity Labour Party administration remains opposed to the initiative, saying that it amounts to the selling of passports.
Friday, however, dismissed this view, saying that the OECS nations are SVG’s neighbours.
“St. Lucians are not prostituting themselves to anybody as they come. They have due diligence. It’s a programme that is worldwide. It’s not just St. Vincent. You are sticking your head in the sand when you think that somehow that this is something that St. Vincent can’t afford.”
Friday made his case as he spoke about the financing of the geothermal energy project, telling lawmakers that funds generated by CBI can be used to fund serious infrastructural projects in St. Vincent and the Grenadines.
“It is disappointing for me to see that this government still is not serious about the CBI programme,” the opposition leader said.
He said that in his budget address, Finance Minister Camillo Gonsalves had made light of CBI when he said:
“Some in this Honourable House advocate the sale of passports as a means of development. We chose instead to believe, as Malcolm X once said, that ‘education is the passport to the future, for tomorrow belongs to those who prepare for it today’.
“As we continue on our developmental journey, the passport of education is the one on which we chose to invest.”
Friday said he is a living example of that and the minister’s statement is no news to him.
He, however, added:
“The point is, you can do both things. As they say, you can walk and chew gum at the same time. And, it may well be that the funds raised from CBI programme can assist in the education of those same people whom you wish to help so much.
“So you can mock all you want. The benefits of the CBI programme are real. And many countries, not only in the Caribbean, all over the world, many are enjoying those benefits. You are the minister of finance’, go look it up.”
In US & OECS
Friday said that the United States has an EB5 visa programme, which is not directly a CBI programme, but a permanent resident programme that leads to citizenship that encouraged persons with significant net worth to invest in the United States.
Some 10,000 EB5 visas are issued a year, Friday said.
The opposition leader said that Antigua started a programme in 2012, Dominica in 1993, Grenada in 2013, and St. Kitts and Nevis in 1984.
Between 1984 and 2015, approximately 10,777 applications from 120 countries came through Basseterre’s programme.
In St. Lucia, both the government and the opposition have supported the programme.
“… it is not a question of those persons who go around saying, ‘Oh, yuh selling passports,” he said, adding that CBI is unlike buying produce in the market.
“The people up there who are selling dasheen and so on, they are selling dasheen. You come up, you give them money, that’s the only thing you need to know. The passport is not like that. So, don’t pretend that it is a situation where you just go round the corner and you say, ‘Yuh want a passport?’ and do it.”
Friday said there must be “serious due diligence” in these programmes to ensure that the applicants are persons that a country wants as citizens.
Responding to comments from across the floor, Friday said, “You would always have people slip through. We want to tell me David Ames was a bona fide investor?”
Not trivial sums
Friday said St. Lucia is talking about having persons of a particular net worth and setting up a sovereign fund that can be used as an investment to do things to enhance the longevity of such a programme.
“Mr. Speaker, we are not talking here about trivial sums,” he said, adding that St. Kitts has used the funds generated by CBI to have hotel projects and diversify the economy.
“… in 2014, the revenue generated by St. Kitts, was $767.9 million,” the opposition leader said.
He said the money was used to fund small business loans, upgrade education infrastructure, invest in statutory corporations, build new roads and repair existing ones, upgrade sporting facilities, and invest in cultural activities like carnival.
He said that in 2017, Dominica’s Prime Minister Roosevelt Skerrit said that $507 million was collected under the CBI programme, of which $324 million was used to help with budget financing.
The rest went to public sector investment programme, debt payments, marketing and to do due diligence.
Grenada, in 2017, earned $140 million, Friday said, adding that in most recent times, that figures have increased.
He said that St. George’s has, in place, “a very rigorous due diligence and security vetting mechanism to ensure that the strength and integrity of the programme, which has been lauded as the IMF, as the gold standard”.
Antigua and Barbuda estimates that, in 2018, the programme would yield $64 million in direct investment to the central government and a capital injection of $198.7 million into hotels, residential developments, and other businesses.
“We were talking at the outset about the financing of hotel projects and we are going to borrow US$50 million. St. Kitts now has a Wyndham project that they started this year. It’s over $100 million that is going to be built as a CBI project. It doesn’t mean that they come and give the government money and the government build it. They put it in that project that they have chosen to develop…”
Friday said Forbes has released a list of the 10 most anticipated Caribbean hotels for 2019, on which three in Dominica, funded by CBI, appear.
“… That’s what we are saying: the benefits will far outweigh the disadvantages. Because there are so many things we can do without having to go and add to the EC$1.6 billion dollar debt, to borrow EC$$150 million to build a hotel or to pull the NIS into funding a risky project so that it can be the financier of the government.
“These are things, Mr. Speaker, that you can’t just deal with them in a vacuum when you say that we don’t want this programme because we are not selling our patrimony. Who’s selling patrimony?” Friday said.
St. Kitts’ double salary
He said that the St. Kitts government last December gave public servants double salary as bonus.
Further, any person who makes less than EC$3,000 a month gets EC$500 from the government.
Friday said that the irony is that a citizen of any OECS country that is a citizen by virtue of the CBI programme has the same rights as all other citizens of those countries.
He said that under SVG’s offshore financial services sector, the nation incorporates entities that become Vincentian persons legally and when those persons bring those persons into those companies, they benefit from various tax arrangements put in place specifically for them.
“You’re not beneath that?”
He said that the country also has a ships’ registry.
“When you put our flag on a ship, that becomes an extension of Vincentian territory. When anybody wants to go on that ship, they have to ask us here in St. Vincent for permission to board it. Those vessels never come into our waters and you want to tell me we are not beneath that. And you don’t even get a fraction of the earnings you get from those programme. The CBI programmes are much more valuable than those programmes.”