(PRESS RELEASE) – Prime Minister of St. Lucia, Allen Chastanet and other Regional Citizenship by Investment (CIP) countries are welcoming positive statements made by the International Monetary Fund (IMF) on the impact of the CIP to the socio-economic structure of participating countries.
The IMF is recognizing the programme as a significant contributor to revenues and lauds the programme for assisting in reducing national debts, as well as it’s contribution to the country’s gross domestic product.
In its 2019 Staff Concluding Statement, the IMF reports that:
“The Eastern Caribbean Currency Union’s (ECCU) GDP growth accelerated to 3¾ percent in 2018, reflecting buoyant tourism and sizable Citizenship-by-Investment (CBI) inflows, which helped support Dominica’s reconstruction-led recovery from the 2017 hurricane.”
The report continued to state that:
“The authorities’ ongoing collaboration on CBI programs’ financial integrity to improve their transparency and governance could help lower negative perceptions about the use of CBI programmes. Such collaboration could support region-wide sustainability of these flows and financial stability.”
Honourable Chastenet sees the IMF’s acknowledgement and recognition of the CIP to be a powerful statement. He commented that most countries have had CIP programmes as it is a sovereign right of a country to bring in outsiders and have them become citizens of that country. The Prime Minister reminded that even before the formal CIP, people could have become citizens of countries in the OECS via the seven-year residency mechanism.
“For the IMF to come out at this point and make that statement tells you that this programme has a future and role to play in the development of smaller island developing states, particular the islands of the Eastern Caribbean.”
“The fact is the evidence is there. St. Kitts and Nevis had a debt situation in excess of 150% which was a result of the diversification of sugar. There is no way St. Kitts would have been able to resolve that issue without the access to CIP funds. Then most recently in the case of Dominica after Hurricane Irma, with the damage that was caused there, and despite having a donor’s conference, in which millions of dollars were pledged to Dominica and some of the other countries, it has been CIP funds which have assisted in Dominica’s goal to resilience. Clearly, in the absence of CIP monies, these countries would be in a very different position today”
Commenting on the statements from the IMF, the CEO of the Investment Migration Councils, Bruno L’ecuyer says that he is delighted that the IMF has recognized CIP programmes as a major socio-economic contributor to developing states.
“The liquidity injection to Caribbean economies creates significant societal and sovereign value. It helps to diversify the economies of those regions; it creates sustainable employment and eases the fiscal and monetary challenges that are faced by sovereign governments the world over.”
From inception, the CIP has been the centre of many discussions as developed countries debate concerns of the validity of such programmes. These negative global influences can deter potential investors and cause missed economic opportunities for participating countries. When positive counteractions are made by organisations which are as prestigious as the IMF, it gives encouragement to CIP participating countries. CIP Head for St. Lucia and Chairman of The Citizenship by Investment Programme Association (CIPA), Nestor Alfred, supports the IMF’s statements and seeks routes for the programme’s sustainability to create a positive assurance to developed countries.
“The truth is, this is the time where we all need to come together, collaborate and make clear statements. Those statements do not necessarily have to be in words; they have to be in actions.
“The issues of collaborations, ensuring that there is proper due diligence, transparency and accountability are important pillars for the sustainability and continued existence of CIP programmes”
Alfred cites OECS’s founding CIP countries St. Kitts and Nevis and Dominica as examples of economies which would have been disastrously impacted had the CIP been terminated. The two countries have been involved in CIP programmes for 35 and 25 years respectively and CIP programmes have contributed in excess of 50% of the countries’ GDP.
“Again, the translation of the actual benefits of these programmes can be felt and seen in a lot of CIP participating islands. For example, Dominica where the housing developments have been taken for the middle class and low-income people. It is amazing and an IMF endorsement created a comfort level that CIP programmes are useful.”
Still, on the subject of collaboration, the Governor of the Eastern Central Banks (ECCB), Timothy Antoine is calling for unity of CIP in the OECS as an attempt to strengthen the product. Currently, there are five CIP countries- Antigua & Barbuda, Commonwealth of Dominica, St. Kitts & Nevis, St. Lucia and Grenada. However, each of these countries host programmes unique to their territory.
“So, our view is that we have to come together. We believe that coming together will help all of our CBI programmes. Set the same standards, ensure that if you get denied in country A, you cannot get accepted in country B, because it’s a single space. Set the price reasonable, but not too low. We don’t want to sell ourselves short.”
Antoine continued that the ECCB’s view is that the region is seen as one CIP brand despite what individual countries do.
Echoing the call for harmonization is Prime Minister Chastenet. He noted that though we have not found a common position among islands, the IMF’s endorsement confirms the longevity in CIP, given that the compliance aspect of the programme is met.
“Certainly, these smaller islands coming together and harmonizing would be critical. The fact is from a price perspective, it can’t always be the lowest number. It doesn’t help when everyone keeps dropping their prices lower and lower. I am a strong proponent for what Governor Antoine is saying and if we want to see the programme last, and take the words of the IMF that this is a good programme, that it can make a significant difference to your country, then we need to harmonise.”
Speaking on the ECCB’s call for collaboration, Nestor Alfred comments that the ECCB would be the most qualified institution to speak on the impact of CIP programmes on the economic development of the OECS islands.
“Like anything else the ECCB has to ensure that those islands first understand how these programmes are and that it is done in a very sustainable way. Therefore, the ECCB made the call for that level of harmonization as it relates to due diligence and applications all with a defined definition.”
Leading CIP experts, Henley and Partners supports the IMF’s statements and agrees with the ECCB’s calls for collaboration. Managing Partner for Henley and Partners St. Lucia, Mark Maraj states that we should be encouraged by the IMF and ECCB to continue the steps that we are taking to harmonise the region’s CIP programmes.
“ It is indeed encouraging that a body as auspicious as the IMF, in it’s 2019 concluding mission statement of its staff report, would recognize the importance of these programmes to the economies of these small islands, where apart from tourism, is playing an important role in foreign direct investment inflows”
“That encouragement comes with a bit of advice that we continue to work on improving the transparency and governance of these programmes given their importance in these economies. In that regard, the role of the ECCB on signalling its intent to be more involved in these programmes, has good stead for the future”
Both Henley and Partners and The Citizenship by Investment Programme Association (CIPA) collectively accept the IMF’s endorsement and agree that the OECS CIP countries will benefit from greater opportunities by forming alliances. CIPA is therefore willing to work with the OECS Secretariat and the ECCB to ensure that the collaboration is successfully executed.
Full video report can be viewed here : https://we.tl/t-oxcNe0y5Yl