Opinion: What's in it for you?

What an exciting time to be alive!

These days, the news cycle does not give us any respite. Regardless of where you live, it feels like every week brings announcements that affect our day-to-day: some are exciting, some are scary, and many are both!

Here in the Caribbean, we are used to abrupt change, and we typically use it as an opportunity for improvement and adaptation. We are also cognizant that this consistent exposure to sudden shifts over the generations has played a significant role in our resilience as a region, as individual nations, and also as individuals.

ADAPT OR DIE

Our citizenship by investment programmes (CIPs) have themselves been the subject of abrupt change recently, forcing the five governments who offer them to 'adapt or die', if you'll allow the expression.

It has been one year since the five Caribbean CIP countries published their now-famous Memorandum of Agreement, with the objective of improving and standardising the due diligence procedures to ensure that only applicants who meet high standards are accepted as citizens.

This anniversary feels like a good time to look back at the changes that have transpired in such a short time:

Price increase

This simultaneously attracts wealthier applicants while also increasing the economic benefits generated for each country.

Mandatory interviews

These are carried out by a due diligence specialist, allowing the CIU to better corroborate certain information declared by applicants.

Additional checks on applicants with the FIU and JRCC

Working more closely with each country’s financial regulator and intelligence agency enables a more comprehensive assessment of each applicant.

Collective agreement on treatment of denials

If an applicant is rejected in one country, they cannot be approved in another, thus protecting the region as a whole. This is especially important since access to one country allows access to all.

Stricter guidelines for authorised programme promoters

Actively monitoring the promotional activities of their licensed agents and authorised representatives will reduce reputational damage that can occur when the Caribbean CIPs are misrepresented.

Suspending applications from sanctioned countries

This move reduces the risk that the Caribbean CIPs will be used specifically to evade sanctions.

Establishment of a regional regulator

This commission’s ultimate mandate is to standardise CIP legislation, governance, and risk assessment across the five programmes, monitor its implementation, and sanction any bad actors.

Each change on its own is a significant endeavour. The fact that they have been successfully implemented together in such a short period is a testament to the governments’ commitment to protecting the value of citizenship and the passport for its local citizens and to the partnerships built with international governments.

THE RISKS OF NOT ADAPTING

We have seen firsthand the actions other countries can take when they deem a programme unsafe: the UK has cancelled visa-free travel agreements with Vanuatu, and the EU has threatened, penalised and litigated its way to some programme closures or modifications and even some citizenship revocations in Europe. These are unacceptable consequences for local citizens, so it is encouraging to see the five governments working closely with the ECCB towards setting up an industry regulator to standardise legislation and sanction bad actors.

By all accounts, the UK and US governments are pleased with the collective progress while simultaneously assessing each programme individually, with an eye towards reducing the inherent risks of these programmes (i.e. the costs of their cost-benefit analysis).

THE FLIP SIDE: BENEFITS

But all decisions come down to a cost-benefit analysis. If the risks are the cost, what are the benefits? To what end are we allowing foreign investments in exchange for citizenship? How are these programmes helping the Caribbean Community? What good are these programmes doing for our international partners, our relationships, our reputation?

Everyone wants to know, “What’s in it for me?”

Answering that question is the next step in the adaptation. We are mitigating risks - great. Now, let’s talk about the benefits.

We need to highlight the success stories - in Antigua & Barbuda, the CIP is directly responsible for constructing hotels and infrastructure projects, affordable housing, energy projects, direct government budget contributions, higher education scholarships, road improvements, disaster relief, pension support payments and more.

Are the CIPs improving the quality of living? Improving our homes and well-being? How about improving education and access to it? Enhancing government fiscal positions or reducing debt burdens? Expanding government services? Stimulating entrepreneurship and trading? Investing in infrastructure and the long-term development of the nation?

The answer is a resounding YES! But for some reason, we don’t talk about it enough.

We need to highlight the success stories - in Antigua & Barbuda, the CIP is directly responsible for constructing hotels and infrastructure projects, affordable housing, energy projects, direct government budget contributions, higher education scholarships, road improvements, disaster relief, pension support payments and more. There are so many success stories; let’s talk about them SCREAM FROM THE ROOFTOPS about them.

The same can be said for the other four Caribbean CIP nations, but these positive stories don’t dominate the headlines, so we forget what good the CIPs have brought and will continue to bring to the people.

MEASURABLE BENEFITS

For the last 11 years, the Government of Antigua & Barbuda has worked hard to build a wonderful programme. The decision-making has been guided by the same values that I personally cherish for our industry: integrity, long-term development and a win-win outcome for Antiguans & Barbudans and CIP applicants.

To ensure the CIP remains healthy and beneficial for many years to come, it’s imperative that we continue to generate concrete and measurable benefits that we can parade to our fellow citizens and international partners.

I personally believe that the best way to achieve this is to specifically direct the CIP capital to the following endeavours:

• Build income tax-generating businesses. In tourism-centric economies, that usually means hotel development and airport/port expansions.

• Invest in specific infrastructure projects. Whether the country is in need of improved internet connectivity, water services, roads and bridges, or other essential developments, using the capital raised for these infrastructure projects allows the government to show measurable results.

• Reduce the cost of living and operating a business by developing low-cost energy sources.

• Lower government debt, thus reducing the burden of debt-servicing on the government’s yearly budget.

• Advance the education system. In the short term, it allows a country to attract international students who directly and immediately contribute to the economy. In the long term, educating a nation means cultivating problem solvers, innovators, and societal leaders.

The Government of Antigua & Barbuda has done well so far using the CIP for these endeavours. I would love to see a published list of projects to which we can point when ‘bragging’ about the programme’s benefits.

ADAPT, DON'T DIE

The long-term sustainability of a citizenship by investment programme is always determined by two questions - “Are you mitigating the risks of letting in bad actors?” and “What are the local citizens gaining?”

Improving and standardising the due diligence procedures addresses the first question, which was urgent and necessary. The next step in adaptation is shining the spotlight on the programme’s measurable benefits. By doing this, you increase the chances that it will remain for many years to come.

Article written by Patrick Peters, CEO of ClientReferrals. www.clientreferrals.com