Selling passports
The most intriguing case in the sale of passports is not that of St Kitts/Nevis. That accolade goes to the Comoros. These are a group of islands in the Indian Ocean roughly similar in area and population to the entire OECS. They are, however, not nearly as developed. The islands were once a French colony, but declared their independence in 1974 and since then there have been several coups.{{more}}
An entrepreneur hit on the idea of buying passports in bulk from the Comoros and selling them in the Middle East, where there are not only many rich, but also many stateless people. He set up a company to do the business. Blandishments were lavished on the Comorians. Parliamentarians were taken on junkets to the Middle East. Development projects galore were promised. Suitcase loads of passports were sold, some say 100,000, but there has been little if any development. It is not certain where the money went.
The Comoros are, of course, not the only small islands involved in the passport business. There are many others, including the OECS countries (except SVG), Cyprus, Malta, the Marshall Islands, Nauru, Samoa, Tonga and Vanuatu. This is hardly surprising. Very small states inevitably face funding problems as they strive to operate as fully fledged independent nations. The current state of the world economy does not make the situation any easier. Ways to bolster the economies of these tiny countries have to be found. Passport selling, or the Citizen Investment Programme, to give it the official name, is one such.
Some small states like SVG refuse to do it at all. Others do not do bulk sales. With the aid of consultants, they pursue a more sophisticated approach. Individual applications are required for each passport and there is some vetting. Applicants are required to have a certain net worth. They must either donate money to specified government funds or invest in real estate or some development enterprise. One advantage of this approach is that it enables the small states to argue that what they are doing is nothing new. Australia, Britain, Canada and the US have long had similar programmes. These big countries, however, initially offer only residence, not citizenship. Moreover the price tag is much heavier. In the OECS we talk of US$200,000; in the developed countries the figure is millions.
The desire to hold one or more passports is understandable. If one is stateless, the acquisition of the passport can mean one, at least nominally, belongs somewhere. The passport also facilitates travel; the more countries to which it permits access without visas, the better.
For countries issuing the passport, the programme provides funds which, in the case of small islands, can be significant. Sums as high as 20 per cent of recurrent revenue have been mentioned.
The disadvantage is that some people are very proud of their nationality and do not like to see it bartered about like some commodity. They fear their countryâs passport may become associated with criminals, tax dodgers and the like. They worry that the bigger countries may impose sanctions on their passports, which could make it more difficult and more expensive to travel than it was originally.
These fears are not groundless. Recently the US and Canada imposed sanctions on St Kitts/Nevis. An English judge has ruled that St Luciaâs Saudi billionaire ambassador to the IMO is no diplomat at all. The IMO is of course the International Maritime Organization, a UN body based in London. The Economist magazine has started publishing lists of âgoodâ and âbadâ passports. Even the IMF has become more cautious. In their October report on Antigua and Barbuda they warned that funds from these passport sales are volatile and unreliable. They should not be used to finance government recurrent expenditure. Rather they should be treated as windfalls to pay down debt or cover the costs of a particular development project.
Comments
