Selling citizenship or selling out?

Has Grenada become too reliant on citizenship by investment? 

Citizenship by Investment (“CBI”) programmes have provided a fiscal boon for cash-strapped administrations across the Caribbean – Grenada has been one of its most successful promoters. To gain Grenada citizenship, applicants must either make a minimum contribution of USD 150,000 to the National Transformation Fund or buy real estate costing at least USD 220,000. Grenada’s GDP growth projections, around 5-8% through 2022 according to the Caribbean Development Bank, are healthy by regional standards but is the government too reliant on its CBI fiscal stream?  

A former senior CBI official in Grenada explained, “Most recent numbers published by the ministry of finance in Grenada suggests that close to EC$300 million, over USD 100 million in revenue, was generated by the CBI programme in 2021. More broadly across the Caribbean, I’d say that number stands at perhaps a USD half a billion when you combine other jurisdictions which offer a similar programme. The difficulty in terms of transparency and reputation is that not all the countries publish numbers. Often, you have to dig into the annual national budget estimates, to try and find the numbers.”

“Most recent numbers published by the Ministry of Finance in Grenada suggests that close to EC$300 million, over USD 100 million in revenue, was generated by the CBI programme in 2021.”

A former senior CBI official, Grenada

Such ambiguity can be frustrating, especially when trying to get a sense of how important these programmes are to the government’s coffers. It can have political ramifications too – the coalition government governing St. Kitts & Nevis, another CBI hotspot, recently split over an absence of information on CBI revenue provided to members of parliament. St. Kitts is not alone, neither Saint Lucia nor Dominica publishes details pertaining to revenue nor number of applicants. Under political and public pressure, Grenada along with Antigua and Barbuda have published those numbers for some years.  

Opposition to the programme is limited, none of Grenada’s political parties officially oppose the programme. Unsurprising given recent growth – revenue generated by the programme jumped some 40% between 2019 – 2021. With real estate prices across the Caribbean growing at around 2-3% per year, the real estate path is also likely to emerge as an increasingly lucrative fiscal stream within the citizenship pathway umbrella. Opposition figures have touted making some changes to the programme, largely cosmetic. 

A former official in the ministry of finance explained, “In a post-pandemic environment where people around the world are seeking warmer climates for retirement, and in case of global disasters where they want to be stuck, they would prefer a more scenic option, and some just simply want to widen their options. Grenada’s CBI programme has done exceptionally well. This additional revenue came at an opportune time as the government experienced significant budgetary shortfalls during the pandemic due to the resulting slowdown in tourism.”

“Grenada’s CBI programme has done exceptionally well. This additional revenue came at an opportune time as the government experienced significant budgetary shortfalls during the pandemic…”

A former official in the ministry of finance, Grenada

Not everybody is happy, especially in parts of the world where concerns over money laundering persist. There has been pressure on Caribbean governments from the EU to move away from CBI programmes. The EU Commission indicated that it would end the Schengen visa waiver for countries with CBI programmes. On the other side of the world, the move directly affected Vanuatu citizens who now must apply for visas to go to any Schengen member country, citizens across the Caribbean could be similarly affected.  

And so, the snowball effect continues. Now the US Congress has also joined the EU in terms of ending any visa-free access individuals may have from countries with these programmes. So, the Caribbean countries are now scrambling to try to come up with some other iteration of the programme or to make changes to the programme that could satisfy the EU and the US to a lesser extent, and still bring the kind of revenue that this current iteration of the programme generates. Reputation matters, but for cash-strapped Caribbean governments so too does revenue.  

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