Published 29 November 2017
Buckie Got It, St. Kitts and Nevis News Source
Timothy Harris and Les Khan, architects of the race to the bottom of Caribbean Investment Citizenships programmes
Basseterre, St. Kitts, November 29, 2017 – Dr. the Hon. Timothy Harris, Prime Minister of St. Kitts and Nevis and Les Khan, Head of the St. Kitts and Nevis Citizenship by Investment Unit can be described as the architects of the Caribbean Citizenship by Investment Programmes’ race to the bottom with the introduction of the ill-advised Hurricane Relief Fund?
When Prime Minister Harris launched the Hurricane Relief Fund less than two weeks after Hurricane Maria devastated Dominica and cause minimal damage to St. Kitts and Nevis, former St. Kitts and Nevis Prime Minister the Right Hon. Dr. Denzil L. Douglas, called on Dr. Harris “to stop his slashing and burning of our Citizenship By Investment Programme that only leads to a race to the bottom.”
“As if that were not enough to offend the sensibilities of right-thinking citizens of our great country and the Region, Prime Minister Harris deepens his deception by claiming that the real intent of the watered-down CIP is to help the devastated countries of Dominica, Antigua and Barbuda and the like. Such is his level of disrespect for our Caribbean brothers and sisters. His approach to helping these countries it would appear is to opportunistically cut the cost of our CIP by 50% to deliberately undercut those same countries’ ability to attract resources through their own CIPs to assist with their recovery efforts after being severely battered by the two recent hurricanes. I liken this to cutting off your neighbours’ legs, then offering them a pair of crutches,” said Dr. Douglas said.
“This is a truly shameful move by St Kitts,” said Mahdi Mohammed, CEO of Guide Consultants in a comment carried by Caribbean News Now.
“This is simply a ploy, a blatantly opportunistic move to improve the competitiveness of the St. Kitts and Nevis CBI programme at the expense of their Caribbean neighbours,” said Mohammed, adding: “What offends me more than anything is that St. Kitts and Nevis is fully operational, having escaped any major damage from the two recent hurricanes. Now Dominica has lost every source of government revenue except its CBI programme and St. Kitts and Nevis is attempting to undermine even that,” Mohammed said.
Antigua and Barbuda’s Ambassador to the United States, Sir Ronald Sanders, said the action of Dr. Harris “is a most unfortunate development. If it is implemented, it will hurt the relief and rebuilding efforts for Barbuda and Dominica, both of which were devastated. What is needed now is solidarity and joint action, not opportunism. It is to be sincerely hoped, that the decision will be reviewed and overturned in the interest of solidarity with neighbouring states that are truly struggling in the wake of these monstrous hurricanes and need every cent they can get.”
“The international and regional community is finally discovering the greed, dishonesty, insincerity, deceitfulness and untrustworthiness of Dr. Harris. His silence for days after Hurricane Maria destroyed Dominica is an indication of playing for time to hatch his diabolical plot,” said a Caribbean personality who spoke on condition of anonymity.
The entrepreneur behind Dominica’s Jungle Bay development, a man who has been involved in Caribbean citizenship by investment for more than two decades, cautioned that if Caribbean leaders don’t get together “sooner rather than later” to agree on a price floor for their CIPs, the result could be an all-out price war depriving the OECS-countries of “hundreds of millions of dollars, which the struggling Caribbean economies rely on for development.”
Speaking to Investment Migration Insider’s editor during the Industry Elite Summit in Beijing on Thursday, man being Sam Raphael, expressed dismay at what he considers a completely unnecessary – and damaging – under-valuation of Caribbean CIPs.
Political leader of the Grenada Progressive Movement, Terry Forrester said Prime Minister Harris lacks foresight in his decision to reduce the cost of his country’s Citizenship by Investment Programme by 50 percent in an effort to raise funds for his country after the passing of Hurricane Maria.
“We are all saddened by the devastation but this sends a shocking and terrible message to the international community and indeed to the rest of the Caribbean. The St Kitts and Nevis prime minister needs to understand that this is a time for the region to come together as brothers and sisters to seriously look at the many challenges facing our region and to develop medium and long term strategies to be more self sufficient and independent. His decision speaks to a problem of serious systemic deficiency, which correlates to equal systemic social problems that are now affecting our region,” wrote Forrester.
Announcing the new option, the Hungarian-based Corpocrat Magazine headlined its article: “St. Kitts Citizenship just got ‘cheaper’
A few weeks after Antigua and Barbuda’s announced that its citizenship under the National Development Fund (NDF) has been reduced to US $100,000. The previous price was US $200,000.
Prime Minister Gaston Browne speaking in parliament said the Citizenship by Investment Programme (CIP) has been doing poorly this year as over the last two months, there have only been three applications under the NDF.
The Antigua and Barbuda real estate option remain priced at US $400,000 and the Business investment option at US $ 1.5 million.
Chairman of Grenada’s Citizenship by Investment Committee, Kaisha Ince announced during the 11th Global Residence and Citizenship Conference in Hong Kong it was lowering the contribution requirement for a single applicant from US$ 200,000 to $150,000 as the discount will bring the programme closer in line with pricing elsewhere in the region.
The Grenada Citizenship by Investment Committee has further announced that dependent children may be aged up to 30 years old and are no longer required to be enrolled in school. Previously, only children under the age of 26 who were currently enrolled in school qualified as dependents. Dependent parents above the age of 55, moreover, will no longer be required to pay the additional contribution of US$50,000 to qualify. The programme regulations had previously only waived the additional contribution requirement for aged dependents over 65.
David Jessop, a consultant and former Managing Director of the Caribbean Council in an article which appeared on several websites including that of the London School of Economics and Political Science London, England said although Citizenship by Investment schemes showed early promise as a spur to national development, increasing competition in the region and beyond, is creating a dangerous zero-sum game in which states try to offset declining income by further reducing pricing.
After analysing the changes in the Citizenship by Investment Programmes in St. Kitts and Nevis, St. Lucia, Grenada and Antigua and Barbuda, Jessop noted: “What is emerging is an apparent race to the bottom.”
“Unfortunately, OECS governments have shown little willingness to address questions about the sustainability of their citizenship programmes, or to indicate whether they have fresh ideas about the ways in which they might redesign existing schemes to ensure continuing income without lowering fees any further,” said Jessop.
A London-based legal advisory firm involved in the Citizenship by Investment Programmes confirmed what the international news media, stakeholders, investors in real estate and concerned persons have been saying. That the Hurricane Recovery Fund option introduced by the Timothy Harris administration gives a family, four St. Kitts and Nevis passports for US$150,000.
“That is selling one St. Kitts and Nevis passport for just US$37,500, compared to Dominica and Antigua and Barbuda at US$100,000 and US$200,000 per passport,” said a stakeholder.
Under the Denzil Douglas administration, in order to become a citizen of St Kitts and Nevis, the minimum investment under SIDF was a US$250,000 one time donation or US$400,000 investment in a property.
“Construction of real estate will be affected as there will be a significant reduction in the purchase of cement, concrete, lumber and other material from S. L. Horsford, TDC, Builders Paradise and Nichols for the building of homes and condos. There are several spinoff effects,” said Deputy Political Leader of the St. Kitts-Nevis Labour Party Dr. Earl Asim Martin, who added that the livelihood of thousands of plumbers, electricians, heavy equipment operators, sub contractors, carpenters, masons, skilled workmen and unskilled labourers will be jobless as construction is significantly reduced or grinds to a halt.
“The local food vendors who go from construction site to construction site daily to sell breakfast and lunch, other food and drinks to the workmen will see their income drastically red cued as well as the number of large construction sites under the Real Estate option dwindle or evaporate,” said Dr. Martin, a former minister of public works.
Prime Minister Harris while in opposition and his Team Unity candidates launched a massive negative campaign locally, regionally and internationally to undermine the programme and on taking office in February, immediately closed the Citizenship by Investment Unit in Basseterre and the Dubai office for several months thus creating further havoc for hundreds of economic citizens, most of them Iranians, who had fled from Iran and were living in Dubai and Abu Dhabi.
With the Dubai office closed, the Passport Office in St. Kitts sent the new passports directly to Iran. Some were also sent to the St. Kitts and Nevis Embassy in Taiwan, which in turn sent the new passports to Tehran. The Dubai and Abu Dhabi-based Iranians never received their passports and opted to take economic citizenship in Dominica.
When Dr. Harris closed down the Citizenship by Investment Unit in St. Kitts for several months in 2015, the Silver Reef investor, Sebastian Mottram, told WINNFM that the once leading programme in the world, is now “at the tail end of the market” as competitors Dominica, St. Lucia, Grenada and Antigua and Barbuda “steal the march and creeping into the market.”
In May, Prime Minister Harris further harmed the industry with the bombshell announcement that he was phasing out the Citizenship by Investment Programme.
Photo: Prime Minister Harris (right) and Les Khan
