When the “protective arm” of former colonisers were removed from Caribbean economies’ trading arrangements with the push for globalisation, the region was left to scramble for sustainable economic structures.
Most of them shifted to tourism and away from the fading monocrops on which many of their economies shakily stood with preferential schemes from Europe.
To this day, tourism remains a key plank in the economic arsenal despite its fragility. Barbados, for example, remains one of the most tourism dependent nations in the Caribbean. To the chagrin of many who witnessed the devastation wrought on the economy during the COVID-19 pandemic, there has been less diversification away from the sector, despite the calls for a greater focus on agriculture.
We will admit that on paper, economic diversification is much easier than in actual execution for small open economies such as Barbados’.
The one success story has been in the area of global financial services. However, the sector is consistently under threat from ever-changing compliance and regulatory standards.
Many have argued that industrialised countries will never stop moving the regulatory and compliance goal posts as the ultimate objective is to undermine the region’s competitiveness in this multi-trillion-dollar industry.
The very Europeans who urged the region to move away from its dependency on the agricultural crops to more sustainable economic alternatives have been the ones accused of aggressively seeking to undermine and dismantle the global financial services sector in many islands.
Countries in the Eastern Caribbean, from St Kitts to Dominica have shifted from their flagging sugar and banana exports to the highly lucrative citizenship by investment (CBI) programmes.
In Saint Lucia, for example, a foreigner from anywhere in the world with required wealth can obtain an OECS passport and citizenship for themselves and their family for US$100 000 plus fees. For a Dominican or Antiguan passport, CBI seekers must fork out US$150 000 plus fees. The CBI rate for these countries will increase to US$200 000 from July 1.
Over in St Kitts and Nevis, the fee is US$250 000.
It is understood that the OECS countries with CBI programmes have benefited tremendously from injections of significant foreign exchange over the years.
For years, various Barbadian prime ministers have steered clear of the programme despite Barbados’ passport being the top rated in the Caribbean.
The CBI programmes are by no means a panacea for the economic challenges facing the region. Not denying the benefits, the challenges are blowing up in the faces of regional leaders with one former prime minister named in a civil suit in the United States charging suspicious financial dealings involving CBI arrangements.
Attracting several Russians and Chinese citizens, some of whom reportedly never reside in the island but who use the passports to gain visa-free entry to the United States and other countries, the CBI schemes are under increased scrutiny due to the spectra of corruption and money laundering.
Some programmes allow the unborn children and grandchildren to obtain citizenship, whilst others make it more complicated.
With increased scrutiny facing the CBI programmes of the region, two members of the US Congress sought amendments to the Immigration Act by introducing the No Travel for Traffickers Act in 2022 to disqualify any country from participation in the US visa-waiver programme if it allowed individuals to obtain citizenship through investment.
An Investment Migration Council article stated, “In July 2023, the United Kingdom took a decisive stance by imposing stringent visa restrictions on Dominica and Vanuatu, both of which offer citizenship by investment pathways. This measure was rooted in concerns regarding potential misuse and exploitation of these citizenship routes.”
It added: “The European Union has a ‘suspension mechanism’ in place that allows member states to temporarily halt visa-free travel for a specific country in the event of a sudden and significant rise in irregular migration or security concerns.”
There is justifiable unease about the growing influence of the Chinese in the Caribbean as the communist country flexes its economic might through soft economic diplomacy.
In the OECS, Chinese nationals represent a significant percentage of those buying citizenship. Here in Barbados, there is also latent but growing worry about the growing foreign loans the island has obtained from the Asian state.
As the options for sustainable economic planks grow more challenging, the administration is being cautioned to tread carefully on any consideration of citizenship by investment, apart from the very limited scope that exists following recent changes to local immigration laws.
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