By LR Liburd
The St. Kitts-Nevis Observer
Operation Rescue’s Dwyer Astaphan is claiming that an unlevel playing field exists in the Federation’s Citizenship by Investment (CBI) programme’s Real Estate option and it is hurting local developers.
Speaking Tuesday night (Sept. 27) on his non-profit organisation’s weekly radio programme, ‘The Operating Room’, the former Minister of Labour told listeners that he had received information from credible sources about some foreign developers who have allegedly gotten preferential treatment from the previous Administration.
“Our information is that the playing field in the Citizenship by Investment programme, the Real Estate option, is not level. Our information is that it is skewed in favour of certain developers, all of whom are foreign. These are not developers/developments that received their concessions, their packages and their deals since the change of government; these are projects that were approved before the government changed.”
Astaphan stated that although the information received is at an early stage and is not incontrovertible, it has given his organisation cause for concern and “the sources from which we are getting this information are extremely reliable and credible, and that is sufficient for us to take it seriously”.
“Not to mention the fact that the importance of what we are hearing from these sources – given that the information is very important to the public interest of this country and to the whole notion or ambition to empower the people of this country – justifies me bringing it up at this stage although it is somewhat preliminary.”
He emphasised that the problem surrounds Stamp Duty and explained that in the sale of a property, the seller has to pay such duty which has been changed from time to time and is now 10% of the bill of sale.
“In some instances,” Astaphan explained, “I am told that certain developers have been exempted from the 10% when they are selling to the buyer of a unit. So if the unit is $400,000, the Stamp Duty would be $40,000, but they would be exempted from it because of the special package of concessions they received. But the local and other developers would not have been smiled upon, by the powers that were, in the same manner. So from that aspect alone, the few are at a competitive advantage over the others.
“The second competitive advantage which those chosen few have been getting, based on the information coming to us, is that they have been allowed wholesale to bring in workers from China, who work for slave wages there and now brought to our country to do the same, to crowd out local people from getting work, or from the Philippines, Haiti, Nigeria or from Russia.”
He inferred that, per capita income, Russia’s is lower than that of St. Kitts and Nevis and the average Russian is not as well off as their Kittitian and Nevisian counterparts, adding that “I am not being xenophobic and I do not have anything against these people. They are human beings like us who are trying to make a honest living”.
He continued: “The problem I have with it is that they are making a living that is inimical to the best interest of the people of this country, individually and collectively. So it is contrary to the public interest.”
On the subject of concessions, Astaphan said the favoured few has a broad and excessive range, including exemption from having to pay the Stamp Duty when they build a unit and transfer it to the first owner.
“And they get the cheap labour, so the cost of constructing and delivering a unit is significantly lower than that of the other developers. And the developers who are local developers are all in the group but disadvantaged. Somehow, the sun didn’t shine on them enough – or maybe their skins were too dark in a country that is dominated by dark skins – to get that light of favour.”
The former Government Minister asserted that the chosen few who have those projects engage agents throughout the world when they want to sell their units.
Astaphan proffered a comparative analysis between those foreign developers who are exempted Stamp Duty and employ cheap labour and their local counterparts who have not been granted those privileges.
He said if a developer is selling a unit for X dollars and his competitor is selling a similar one in market value for the same price, the developer who does not pay the Stamp Duty and hires cheap labour could offer agents higher commissions.
“If you are selling a unit for $400,000 and can offer an agent in Shanghai or Dubai a 25% commission, it means that he or she can pick up a commission of $100,000. It therefore tells you from the very beginning that the $400,000 is an artificial price, because the actual cost of the unit is nowhere near that,” Astaphan further explained.
The social commentator and critic asserted that apart from the fact that the situation is washed in artificiality, the problem is that the developer who was not given those special anointments with exemption from the Stamp Duty and the ability to bring foreign workers into the Federation is grossly disadvantaged.
He is of the view that any developer who says he or she loves St. Kitts and Nevis would not want to import foreign workers over locals if they are available and equipped to do the same work.
Astaphan proclaimed that most of those foreign workers could be seen on Fridays and Saturdays outside Western Union and Money Gram “bleeding the economy and you have foreign developers, who get the money from their unit buyers to buy the apartments, bring in as little money as possible into the country to build and complete the units”.
He claimed that most of the foreign workers’ money as well as most of the commissions are sent out of the country.
“So what you have here,” he added, “is a sector that is built by an unjustly massive manner to the detriment of locals; an industry that was designed by locals. What kind of leaders would introduce an industry into their country that benefits foreigners and jeopardises locals? That is exactly what is happening in this situation, based on the information we are getting.”
Astaphan also claimed that real estate agents in Beijing or Mumbai, or elsewhere overseas, do not have any seminal, sentimental, cultural patrimonial connection to St. Kitts and Nevis, but their connection is to the amount of money they could make.
He emphatically declared that Operation Rescue would be closely following the information provided by their sources.
Relative to this situation, Astaphan pointed accusing fingers in the direction of former Prime Minister now Opposition Leader, the Rt. Hon. Dr. Denzil Douglas.
“This is yet another aspect of the dismissive, disdainful, thoughtless and self-serving attitude and policies projected by Denzil Douglas when he led this country…I don’t know if it has done it or if it has begun to do it, but this present Government needs to do a proper analysis of this sector in order to ensure that the bulk of the benefit of this industry goes to local hands. The former Government botched it, got it wrong. I don’t know whether it was accidental or incidental, because I am told that one of the companies that is benefitting from this unlevel playing field is a company with which people close to the former dispensation are very close.”