Caribbean CBI schemes risk EU visa backlash

The head of a University of the West Indies think tank suggested on Monday that the era of easy revenue from “golden passports” sold by several Caribbean nations is over, after some of the world’s richest nations, including former colonial powers, urged them to toughen safeguards on citizenship-by-investment schemes or scrap them entirely. 

 

Professor Don Marshall, director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES), said Caribbean nations have relied too heavily on selling citizenship and offering financial incentives to foreign investors, rather than focusing on developing productive, diversified economies.

 

His warning follows a shift in EU policy, outlined in a report published on December 19, which builds on a hearing in April this year that deemed Malta’s “golden passport” scheme illegal. The European Court of Justice ruled that the scheme violated EU law by commercialising citizenship and undermining mutual trust among member states. The Report from the Commission to the European Parliament and the Council – Eighth Report under the Visa Suspension Mechanism – emphasises that strengthened screening, rigorous safeguards and a shift towards productive, diversified economic strategies are now essential not only to protect visa-free access but to ensure the region’s long-term economic stability.

 

The EU report states that citizenship carries real security and mobility implications.

 

Caribbean states operating CBI programmes must now implement rigorous safeguards or reconsider them entirely, or risk suspension or loss of visa-free EU travel with major economic and diplomatic consequences. Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, and Saint Lucia rely on such access, but the report warns that without stronger security measures, this privilege and the travel freedoms of thousands of citizens could be jeopardised.

 

Professor Marshall explained: “A number of EU countries specialise in anonymising and privatising money flows into their financial centres without being themselves subject to black lists or grey lists. This is because they, together with the OECD (Organisation for Economic Co-operation and Development) and FATF (Financial Action Task Force), are at the centre of those intergovernmental bodies that make up the regulatory international financial architecture. Western officials hold all key positions, and consultants who advise in the financial industry are often recruited to advise on regulations.”

 

He added that Caribbean governments, having abandoned industrial policy in keeping with neoliberal economics, had focused on establishing market order and encouraging financial services as key measures to stimulate private sector-led growth and attract investment inflows.

 

“One by one, each government recognised that a direct stimulus was required to further woo inward investment, and so the CBI programme emerged as a policy response. Over time, a race-to-the-bottom ensued among competing countries as financial investment thresholds decreased in exchange for the conferment of local citizenship. What was once a US$250 000 ($500 000) requirement 30 years ago has shrunk to US$100 000 ($200 000).”

 

Referencing Barbados’ recently passed Economic Diversification and Growth Fund Bill, which allocates $225 million over three financial years in annual instalments of $75 million to support foreign investors, Professor Marshall said: “The plain truth is that these initiatives borne out of commercialising sovereignty tell a story of the failure of those assumptions that capital will be drawn to the potential productive sectors of the region’s economies like bees to honey. 

 

“The majority of private inward inflows remain stubbornly in property development and real estate prospecting. Others have been drawn to fossil fuel potential on the islands’ ocean floors but not in its agriculture and biotechnology potential, not in its arts and culture, nor in the creativity of its people.”

 

The political expert added that this was because planners and advisers had not broken with tradition and had not attempted to wrest control of the economy away from the extractivist, low-risk, commercial-dealing biases of the traditional capitalist classes who predominate in chambers of commerce and private sector lobbies.

 

Professor Marshall said: “New arrivants in insurance, banking, retail and property rentals also proliferate in the small and micro-business lobbies and this serves to reinforce the very conservative enterprise culture that must be overcome if these economies are to push past their limited diversification. 

 

“In my work, I continue to bemoan the absence of a developmental state, the failure to delineate an industrial policy, and the failure to engage in initiatives that can give rise to a new economic class. Overcoming coloniality is a transformation venture that goes far beyond flag independence and mere nostrum at the UN.” (SZB)