PM addresses CBI controversies, pledges reforms

Prime Minister Dr Terrance Drew addressing the National Assembly
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By Loshaun Dixon

During his address to the National Assembly on Tuesday, Prime Minister Dr. Terrance Drew presented the results of his administration’s thorough examination of the Citizenship by Investment Programme (CBI) in St. Kitts and Nevis and its effects on the federation.

The Prime Minister’s remarks represented a major advancement in the programme’s management in terms of accountability and openness.

Dr. Drew commenced his address by reaffirming his commitment to the citizens of St. Kitts and Nevis, stating, “Over the past few weeks, I have stated publicly that I will address the people of St. Kitts and Nevis…On the results of our administration’s internal review of our citizenship by investment programme.”

He highlighted the provisions in the Citizenship Act and the Constitution to highlight the significance of the CBI programme, which enables people to become citizens through a significant investment.

Dr. Drew emphasized the stringent due diligence procedure that candidates must go through in order to be granted citizenship and a passport to St. Kitts and Nevis, while highlighting the programme’s forty-year history.

“After an investment of a substantial amount and a satisfied vigorous due diligence process, then that person can apply for citizenship by law.”

Dr. Drew revealed that since taking office in August 2022, closely monitoring the CBI unit’s operations has been a top priority for his administration. He recognised the important problems found in this review, which prompted prompt action to resolve.

“These were some of the issues that I had been informed about prior to taking office, that needed some significant attention,” Dr. Drew revealed. He recognized the need for urgent action, commissioning a comprehensive review of CBI regulations and data to provide transparent information to citizens at home and abroad.

The CBI programme is now a key component of the country’s financial architecture, and the prime minister noted its economic significance. However, he expressed concern over its overreliance on volatile CBI revenue, citing observations from the International Monetary Fund (IMF).

He spoke of the significant economic effects of the Citizenship by Investment (CBI) programme in St. Kitts and Nevis, in addition to stressing the importance of the programme as a crucial source of funding for the federal government.

Dr. Drew also remarked about the necessity of economic diversification.

“CBI generated 43% of the overall cash revenue of the federal government between 2008 and 2022,”

he said, revealing that during this period, the programme contributed significantly to government coffers, raising a total of 5.678 billion EC dollars in revenue, averaging roughly 378 million EC dollars per year.

“In the last five years of the previous administration, CBI generated 50% of the overall cash revenue for the federal government,” said Dr. Drew, shedding more light on the programme’s impact. It increased to 57% in the previous two years.” He claimed that this is an example of the risks associated with depending too much on one source of income, reiterating the worries expressed by the International Monetary Fund (IMF) about the vulnerability that arises from relying too much on erratic CBI revenue.

Despite praising CBI revenue for helping the country become less dependent on foreign aid, Dr. Drew warned against complacency, pointing out that the previous government did not succeed in diversifying the economy.

“In 2022, CBI revenue reached an unsustainable level of 60% of total federal government revenue. Our administration has been focused on diversifying our economy.”

Dr. Drew stressed the need to lessen reliance on CBI inflows. He pointed out how crucial it is to look into alternate sources of income in order to protect the country’s economic stability.

Concerns about particular projects authorised by the previous administration—like a prison project financed by CBI shares—were also raised by Dr. Drew. “It means, therefore, that 5,500 main applicants…can access our passport,” he explained. Highlighting the potential magnitude of this provision, Dr. Drew noted that a family of four could potentially translate into four times 5,500 passports.

The Prime Minister voiced apprehensions regarding the handling of St. Kitts and Nevis’ Citizenship by Investment (CBI) programme by the previous administration. His remarks shed light on alleged shortcomings and underscored the need for transparency and accountability in the programme’s administration.

“The other aspect that we have to look at, between 2016 and 2022, it was recognized that there was a cheapening of our citizenship by investment programme,” Dr. Drew stated, drawing attention to concerns surrounding the integrity of the program during this period.

He highlighted a crucial issue of market forces affecting the programme, stating, “By their own admission and actions, they said to us that we were not going to be able to achieve, and it was because of market forces.” This acknowledgment, he asserted, raised questions about the government’s response to external pressures and its impact on the programme’s standards.

The Prime Minister expressed grave concerns about the potential ramifications of allowing investors to pay substantially less than previous rates. “They jeopardized our relationships with our international partners, by allowing investors to pay much less than they used to pay before.”

He said that such practices could undermine the programme’s credibility.

Dr. Drew also addressed allegations of underselling and lax oversight, referencing criticisms of the previous Labour Administration. “That is why we heard terms before that the previous Labour Administration was selling passports like black pudding on a Friday afternoon,” he stated, highlighting concerns over the perceived commodification of citizenship.

Moreover, Dr. Drew raised questions about the investment requirements during the previous administration’s tenure, particularly in relation to specific projects such as the prison project. “The average that an investor had to invest was much more than they had ever expected,” he noted, indicating discrepancies between investor expectations and actual investment obligations.

In response to calls for transparency and accountability, Dr. Drew affirmed his commitment to conducting a thorough review of the programme. “I’ve been asked over and over to present authentic reports with good information, which is happening today,” he assured, emphasizing the importance of providing accurate and comprehensive information to the public.

The Prime Minister also underscored the necessity of swift action to address systemic issues within the CBI programme. “It is only because of swift and comprehensive actions of St. Kitts and Nevis Labour Party administration that we still have a CBI programme in 2024,” he declared, reaffirming his administration’s dedication to upholding the integrity of the programme.

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