By Caribbean News Now contributor
MIAMI, USA -- In his latest weekly “The View from Europe
” column, Caribbean News Now contributor David Jessop noted what he referred to as “a parallel universe” promoted by glossy brochures for citizenship-by-investment programmes in the Caribbean emphasising the so called “good life”, in stark contrast to the “gritty reality of everyday life for most citizens of the islands concerned”.
Jessop has a long history of writing about and advising on regional matters as a consultant and former managing director of the Caribbean Council, a specialist not-for-profit consultancy providing services internationally to companies, trade associations, governments, public sector organisations, and regional and multilateral organisations.
“At a purely economic level, it is hard to understand why such schemes are not designed to be sustainable in ways that bring continuing income to the country concerned. Without any residency requirement there is no long term gain in the form of other taxes or fees. Moreover, in the absence in some cases of the equivalent of an independently controlled sovereign fund able to receive fees from citizenship, one-off income remains unrelated to long-term infrastructural, education or public health care needs,” he said.
In an earlier op-ed piece
at the end of last year, Antigua and Barbuda’s ambassador to the US, Sir Ronald Sanders, noted that the terms of the citizenship-by-investment programmes differ from country to country but the underlying basis is the same – citizenship and passports are granted in exchange for a significant financial investment.
“In Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis and (recently) Saint Lucia, there are two options – either a large contribution to a national development fund or a prescribed investment in real estate. Typically the latter means buying land and building homes,” he said.
Sir Ronald Sanders
However, Sanders pointed out, the revenues from the citizenship-by-investment programmes have to be used for financial and social stability now.
“Saving makes little sense if provision is not made for preserving and enhancing the capacity of the country to survive. No point in saving for tomorrow and starving today,” he said.
In a 2014 paper “Selling Visas and Citizenship”, the Migration Policy Institute (MPI) stated that the clearest economic benefits come from programmes that encourage cash payments to the government or national development funds, at the same time noting that “there is no guarantee the money will be wisely spent”.
And the typical lack of transparency and accountability of government officials in relation to such cash payments has been the source of ongoing controversy, especially as regards the issue of diplomatic passports.
The government of every single Caribbean country that operates a citizenship-by-investment programme – Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis and Saint Lucia – and even some that do not have a formal programme, notably St Vincent and the Grenadines, has faced allegations of corruption in relation to the issue of diplomatic passports.
On the other hand, according to MPI, the economic benefits of the property model are unclear.
“Significant property purchase may raise housing values and help stabilize declining prices -- albeit only at the high end of the market, as programs impose minimum property values,” MPI noted.
While housing purchases could stimulate construction activity, creating jobs, evidence of these impacts in practice is scarce. It is also possible that homeownership could generate local consumer spending or taxation by encouraging new citizens to visit the country; however, the extent of this spending is also unknown.
Citizenship-by-investment programmes have spawned a global industry of consultants and agencies advising and assisting would-be applicants. A leading company in this field, Montreal Management Consultants Est., strongly believes that such programmes should empower the entire population of the country concerned.
“Citizenship-by-investment programmes should operate especially to improve the social and economic status of the lower income sector of the population by, for example, providing them with quality, affordable housing,” said Anthony Haiden, the owner of MMCE.