The CBI Index: national empowerment through economic support
If the funds raised through citizenship by investment programmes are properly allocated it can lead to a noticeable upturn in a nation's fortunes
Citizenship by investment programmes return a substantial amount of economic revenue to host countries, particularly when these are small island developing states. A remarkable growth story can be seen in St Kitts and Nevis, where, according to the IMF, in 2015 the Citizenship by Investment Programme contributed to 12 per cent of the national GDP, and assisted the country in cutting its public debt from 159 percent of GDP – a figure recorded in 2010 – to 68 per cent.
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Judicious allocation of citizenship by investment funds can thus result in an upturn of fortunes for nations, and in the implementation of critical development agendas.
In St Kitts and Nevis, funds donated to the Sugar Industry Diversification Foundation (SIDF) have been used to support construction, agriculture, education, and entrepreneurship. Projects that have had an immediate effect on the economy include the Agricultural Training Employment Project and the Capisterre Farm Project, which have created employment opportunities for local farmers and boosted production. Meanwhile, long-term undertakings such as the Student Loans Initiative and the Small Entrepreneur and Enterprise Development Programme ensure the next generation of Kittitians and Nevisians will be well placed to meet future challenges and develop key business skills.
Illustrating how citizenship by investment can emerge as a lifeline in times of distress is the Commonwealth of Dominica. In recent years, Dominica’s Citizenship by Investment Programme has come to contribute significantly to the nation’s GDP. However, the island was never so grateful to have established the programme than in August 2015, when Tropical Storm Erika severely damaged infrastructure and property. The programme, which in the 2015/2016 fiscal year generated a significant portion of GDP, allowed the government to focus on “building a more resilient Dominica”, with infrastructure projects taking centre stage. The rehabilitation of Douglas Charles Airport, the Storm Erika Rehabilitation Works Project, and the House Renovation and Sanitation Programme, are just a few key examples. Other ventures sponsored by the programme include geothermal power, small businesses, and tourism facilities.
While Dominica was proactive in the establishment of its programme, Vanuatu did so reactively, launching its Vanuatu Economic Rehabilitation Programme (VERP) after the passing of Cyclone Pam in March 2015. VERP funds are redirected to easing the severe economic contraction suffered because of the tropical cyclone.
How citizenship by investment funds are allocated is crucial to many nations’ welfare and sustainable development. Governments that establish funds for citizenship by investment donations are able to earmark revenue for specific projects, as and when a need is identified, depending on how the fund was set up.
Furthermore, the more governments become transparent in their distribution of revenues from citizenship by investment, the more applicants can recognise the value of their contributions, and the impact that they may have on their new, fellow nationals.
