By Just A Citizen
Our country is in dire need of an injection of fresh ideas to drive growth and build prosperity. Over the last five years, our GDP growth has lagged behind our Eastern Caribbean Currency Union (ECCU) neighbours, averaging below 2%. The COVID-19 crisis has further severely eroded GDP. In layman’s term, the average citizen is feeling an economic pinch and in some cases real hardship. Unfortunately, the end is not near and we are not even at the beginning of the end.
I took some time to review a few of the citizen by investment (CBI) and resident by investment (RBI) programmes operating across the globe given its importance to our local debate.
There are 14 countries with an active CBI programme, which are Dominica, St. Kitts & Nevis, Grenada, Antigua and Barbuda, Vanuatu, Malta, Cyprus, Montenegro, Turkey, Bulgaria, Austria, Cambodia and Jordon. Many other countries operate a RBI programme with notable countries such as the United States of America, United Kingdom and Canada included as well as other major European Union countries including Portugal. They refer to these programmes as “Golden Passports”.
The CBI programme offers immediate dual citizenship and second passport to an individual for an investment or contribution to a national development fund of the country facilitating the CBI program. The RBI programme, on the other hand, offers permanent residency then a pathway to citizenship after fulfilling certain criteria over time. Both the CBI and RBI programme are usually supported by rigorous criminal background checks.
In our region, St Kitts & Nevis is the poster child for running a successful CBI programme. The CBI programme in St Kitts & Nevis started in 1984, the first of its kind anywhere in the world. St Kitts & Nevis is the smallest independent nation by geographic land size (104 sq. miles) and population size (52,000) in the Western Hemisphere. Like many nations in the Caribbean, its economy was based on a single agricultural crop of sugar. The country closed its sugar industry in 2005 after several decades of losses. The country faced the uphill battle to diversify its economy mainly with tourism and financial services. Although its CBI programme started in 1984, the take off of the programme started in 2013.
The GDP of St Kitts and Nevis is EC$2.7 billion compared to St Vincent EC$2.1 billion. Over the last five years, St. Kitts GDP growth rate was on average above 3% while St. Vincent recorded an average growth of 1.5%. A key measure of wealth is GDP per capita. St Kitts GDP per capita is EC$52,000 while St. Vincent is average at EC$20,000 — over 60% lower. An indicator of the strong CBI programme in St Kitts & Nevis is that construction and real estate is 50% higher compared to St Vincent. Prior to the COVID-19 crisis, St. Kitts unemployment rate was estimated at 4.9% while St. Vincent is approximately at 20%.
Comparatively, St. Kitts is performing far better than St. Vincent on a like for like basis. While it must be said that St Kitts had a head start with its tourism product, a substantial factor is the inward flow of investment funds to develop the country through its CBI programme.
The CBI programme in St Kitts offers the benefits to citizens of another country to acquire a second passport for a significant contribution to a national fund or investment in real estate. The current cost is US$150,000 non-refundable development fund contribution or an investment of US$400,000 in real estate plus applicable taxes and fees. It is unclear what revenues are earned by St. Kitts CBI programme but its economic dominance in the Eastern Caribbean is a clear indicator that this is significant.
An example of a RBI programme is in the European country of Portugal. Their programme offers permanent residency with an investment of US$500,000 in real estate. Their programme offers a pathway to citizenship after five years. This programme is a major source of foreign direct investment into the country of Portugal. The great United States offers green cards to persons investing in their country in specific businesses and hard area regions of the US. As we all know, there is also a pathway to citizenship for such persons even in the US.
COVID-19 has forced all of us to become creative and bold. Our foreign revenue streams along with tourism have virtually dried up overnight. Our unemployment rates are rising. A CBI programme is a potential game changer if administered in an effective manner in St. Vincent and the Grenadines.
Alternatively, if on principle some politicians think that a CBI programme tramples on the sacrament of citizenship then we should deliberately introduce a RBI programme. If done properly a RBI program can also dramatically boost the St. Vincent economy. CBI or RBI programmes are not about selling passports to unscrupulous individuals, the historical evidence is there for all to see the benefits this can bring to a country. We will fail our people if we do not seize this opportunity to attract investment to St. Vincent and the Grenadines.
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected].