thought leadership by Kevin Hosam Managing Director & Licensed Agent Exclusive Concierge
THE IMPORTANCE OF CIP TO HOST COUNTRIES More than any period in the life of CIP/CBI programmes, the last two years have emphasised the need for this significant non-tax revenue source for Caribbean economies. The five countries in the region which offer citizenship by investment programmes primarily rely on tourism receipts to fund government operations. However, for most of 2020, commercial aircrafts were grounded globally with the consequence that tourism revenue was zero. For these small island nations, the governments were able to meet most of their financial obligations from the revenue generated through their respective citizenship by investment programmes. Over the past seven years, in the case of Antigua & Barbuda and Grenada, and for more than a decade in the case of Dominica and St Kitts & Nevis, CBI programmes have played an increasingly vital role in the fiscal life of these countries. It is estimated that CBI contributes upwards of 40 percent of Dominica’s and St Kitts’ GDP and 10 to 15 percent of Antigua’s, Grenada’s and St Lucia’s. The funds are also used to support much needed social programmes and the budget of some government departments, including social security and pension disbursements. Apart from the direct cash that flows to the government, the programmes also contribute to the economy through real estate and construction projects, supporting the maintenance of existing jobs and creating new ones in those sectors. Following the 2008 global meltdown caused by the collapse of the USA sub-prime mortgage fiasco, financial institutions shifted away from lending to hotel projects in the Caribbean region. Financing for such projects largely dried up as a result. Currently, 99 percent of hotels being constructed, renovated, refurbished or expanded are doing so under CIP/CBI. In St Kitts, there are over 120 approved developments, whilst in Antigua,
32
THE CITIZEN
