The case for citizen by investment, which the ULP gov’t rejects

By Gumbsie

For some time now, there has been a bifurcation of views on whether this country should have a citizen by investment programme (CBI) like other countries of the Organisation of Eastern Caribbean States (OECS).

The New Democratic Party (NDP) supports a CBI programme while the ruling Unity Labour Party (ULP) opposes such a programme.
CBI or CIP offers a fast-track citizenship to foreign investors against one-time economic contribution to the government, such as buying a property or one time contribution to the government fund.

The CBI programme is also referred as a golden visa scheme or resident by investment programme in some countries.
Several countries have official CBI programmes, including five OECS countries, namely St. Kitts and Nevis, Dominica, Antigua and Barbuda, Grenada and St. Lucia.

St. Vincent and the Grenadines (SVG) being the exception in the OECS for not having a CBI programme. St. Lucia established its CBI programme in 2016, while St. Kitts and Nevis was the first country in the world to introduce such a programme in 1984.  Other countries outside the region that have an official CBI programme include Malta, Montenegro, Moldova, Turkey, Cyprus, Jordan and Vanuatu, Mauritius and Egypt.
The government of SVG has posited several arguments why it has not adopted a CBI programme. The Prime Minister, Dr. Ralph E. Gonsalves, said that the citizenship of his country is not for sale.

Weighing in further on the CBI programme, it was stated that “Gonsalves believes in practice, citizenship by investment is not sustainable and is of the view that it brings a lot of vagabonds, criminals and people who want to use their money to escape the extent of scrutiny.” 

In light of the prime minister’s assertion, it must be noted that SVG has an active ship registry programme, where ships are registered and fly the flag of the country. A national flag is the symbol of a country and in many instances, ships flying the flag of SVG have been nabbed in illegal maritime activities, casting a negative image on the country internationally.

Former OECS leaders with equal or a more illustrious academic background than Gonsalves have embraced the CBI programme. Keith Mitchell, PhD, of Grenada, a former lecturer in mathematics at Howard University in the United States,  Kenny Anthony, PhD, a former prime minister of St. Lucia and a former lecturer in constitutional law, UWI, Cave Hill Campus;  Dr. Denzil Douglas, a physician and Timothy Harris, former prime minister of St. Kitts and Nevis, who hold a PhD in economics. For that reason the question can be asked: what esoteric understanding or knowledge does the  prime minister of SVG have that the other leaders don’t possess?

The perplexing decision of Gonsalves not to embrace a CBI programme  can be scrutinised even further, given the fact that SVG is the poorest country in the OECS, based on gross domestic product (GDP) per capita.Many people have argued that a de facto CBI programme exists in SVG, given the fact that some unsavoury individuals were allegedly to be in possession of SVG passport. Interestingly though, a budding real estate developer has stated his intention to construct 40 villas in  Bequia,  which begs the question — who are those villas going to be marketed to and what type of visa would those potential buyers/investors obtain?

Since the collapse of the banana industry, tourism and remittances have become the main pillars of the economy. Moreover, the island has not found another crop to replace bananas that can generate the same amount of revenue to the economy. In the case of Grenada, Dominica and St. Lucia, the CBI programme has more than compensated for the loss in banana revenue to those countries’ economies.
The CBI programme is viewed by many governments as a means to attract foreign direct investment, especially infrastructural development, and improve the social and economic wellbeing of citizens.  For instance, an article in the Sydney Morning Herald noted that countries including Portugal, Ireland, Greece and Spain launched golden visa programs to attract foreign investment in the wake of the financial crisis.

“They brought in billions of dollars of foreign money and are credited with rejuvenating real estate markets in cities where demand had been low.”

The economic benefits of a CBI programme in the region have been immense. Dominica is building a US$370 million international airport, completely funded by its citizenship by investment programme. In addition to the airport, the government has begun constructing 5,000 hurricane-resistant homes for its citizens in the wake of Hurricane Maria, which destroyed 90% of structures in the country.

According to the St. Kitts and Nevis government’s audited report, “The Citizenship by Investment Unit continues to be the largest contributor to the Government’s overall recurrent revenue collections. This collection amounted to EC$543 million in 2021.”

As a result of this windfall revenue from its CBI programme, the government of St. Kitts and Nevis approved a CBI dividend to its citizens and residents at the end of 2022.
In Antigua and Barbuda, the government is using part of the proceeds from its CBI programme to finance the University of the West Indies, Five Island Campus. It has created The University of West Indies Fund. Under this investment option, an investor finances UWI’s fourth-landed campus.”

According to Jeremy Savory, “CBI made up 20% of Antigua & Barbuda‘s GDP in 2017, while it was 25% of Dominica‘s GDP in 2019, which amounted to half of the government’s total revenue.”

Small European Union countries like Malta and Cyprus have also benefited from the adoption of a CBI programme. In Malta, the CBI programme has generated $528 million euros between 2016 and 2022.  Cyprus’s CBI programme is estimated to have generated close to $11 billion between 2013 and 2019.

In February 2023, Ireland and Portugal scrapped their golden visa scheme, while Britain terminated a similar scheme for millionaire investors in 2022. This was done in light of the opposition  to such a programme by the European Union. 

In explaining the European Union objection to CBI programs in member states, Smart Citizenship, said, “The European Union has expressed its criticism towards CBI programs for several reasons. Firstly, they may provide avenues for money laundering and other illicit activities. Secondly, CBI programmes may enable individuals to circumvent immigration laws and gain access to the EU without proper background checks. Lastly, these programs may compromise the sanctity of EU citizenship by allowing individuals to obtain it without any genuine connection to the country.”

More recently, the EU has stridently opposed the golden visa schemes following the outbreak of war in Ukraine last year. It has insisted that EU member states operating these programmes implement much stricter controls to prevent criminals as well as Russians and Belarusians who support the war in Ukraine from benefiting from such visas.

More recently, the EU has stridently opposed the golden visa schemes following the outbreak of war in Ukraine last year. It has insisted that EU member states operating these programmes implement much stricter controls to prevent criminals as well as Russians and Belarusians who support the war in Ukraine from benefiting from such visas.

However, quoting from the Sydney Morning Herald, “Nuri Katz, founder of citizenship-by-investment services firm Apex Capital Partners, says that even though countries may be announcing cuts to programs, it is likely they will come back in some way, shape or form.”

While the European Union may have objections  to a CBI programme, the United States has recently  endorsed the  CBI programmes in the five OECS counties, providing  there is greater oversight of the programme and due diligence of potential beneficiaries.

Many Vincentians believe that a CBI programme in SVG would have assisted in tackling many of the socio-economic problems facing the country. For instance, it has been reported that the National Insurance Service is not financially sustainable in its present state, hence the funds generated from a CBI programme could have been used to recapitalize the NIS.

The national public debt is inching closer to a US$1billion, a CBI programme would have reduced government borrowing from financial and multilateral institutions.
According to an unpublished survey of household and living conditions in 2018, it was reported by the opposition New Democratic Party that the poverty rate among Vincentians stands around 36% — a staggering number given that the survey was conducted before the Covid Pandemic, the volcanic eruption and the Russian-Ukraine war.

A CBI programme could have assisted the government in undertaking poverty reduction programmes instead of turning to a jaded Taiwan for developmental assistance all the time.

As Mahatma Gandhi stated, “Poverty is the worst form of violence.”

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