Bargain Basement Sale of St. Lucian Passports
The Allen Chastanet government recently announced that the special COVID-19 bond for a St. Lucian passport will continue for another 12 months. St. Lucia currently offers the world’s cheapest passport for sale and was originally meant to expire at the end of 2020 but has since been extended until the end of 2021 possibly in an effort to pay for all the borrowing by this government “The Cabinet of Ministers of Saint Lucia has approved the extension of the offering of “The Special COVID-19 Relief Bond” beyond 31st December, 2020 for one (1) more year until 31st December, 2021”
This special COVID-19 bond was meant to be a limited time offer ending December 31 2020. CIP St. Lucia has not even updated their Investment Opportunities webpage with the extension though announced it on their news-blog. The PM has failed to disclose any details about how much of the CIP money has been used or is in the sink fund he mentioned on July 4th.
This cheap mechanism to obtain a St. Lucian passport works as follows:
“A neat trick to get citizenship, the cheapest way for under $50,000 USD in Saint Lucia is to make use of the Covid Relief Government bond option which was introduced for a limited time until Dec 31, 2020. You buy Non-interest bearing Covid-19 Government bonds in Saint Lucia for $250,000 and you get back the entire principal without any interest after 5 years, guaranteed by the Saint Lucia Govt. For Citizenship you have to pay $30,000 administrative costs plus there is $7,500 due diligence fee. All this money goes to the government. The Application fee $2000 is also waived, to make this scheme exciting for clients.
Summing up you pay now $287,500 now and you get back $250,000 after 5 years. That is all in all, Citizenship is yours for just $37,500 USD cheapest possible route for one person. This number could go up for families plus there are also additional agent fee. You can also add child or family members later paying a flat fee.”
The cost for a St. Lucian passport at this rate is so low that one-week at Jade Mountain’s Galaxy Room is roughly the same cost. Is this value of St. Lucian citizenship to this government? Some of the selling points of a St. Lucian passport from above are the following “The Saint Lucia passport is a proof of your citizenship. You can start using the passport from day one, board a plane without any visa to visit EU schengen states (26), United Kingdom, South Korea, Singapore. You also have full rights with citizenship such as right to live, work, study and even right to vote and hold government offices.” As an added bonus, the name of the new St. Lucian citizen is not required to be published in the Gazette like in Dominica.
Do we want to be known as the cheapest place to buy a passport in the world? Is our debt rating so mediocre thanks to our current leadership that we need to provide a St. Lucian passport for investors to purchase St. Lucian government bonds? Maybe that is why investors significantly higher interest rates St. Lucia’s Treasury Bills compared to other OECS islands. These are signs of a failing government led by Allen Chastanet!
Analysis of Current Passport Sale Numbers
The Prime Minister presented the Citizenship by Investment Programme (CIP) results in Parliament on November 24th which covered the period from April 1 2019 to March 31 2020. “During the 2019–2020 financial year, 143 applications for citizenship were granted, resulting in 188 new citizens.” Curiously the article did not explicitly enumerate the revenue obtained from the 143 applications but instead included the total amount over five years. During the period April 1 2018 to March 2019, the CIP programme reported the follow results. “During the 2018–19 financial year, 210 applications for citizenship were granted, resulting in 288 new citizens. Ryan Deveaux noted that during the 2018–19 period, EC$61,914,622.40 was paid to the government.” Based on these numbers it is clear that there was a decrease of 67 applicants (32%) and by extrapolating the figures a decrease of approximately 30% ($20M) from revenue raised.
Why did the CIP numbers fall by more than 30% in only its fifth year of operation? Is this the sign of poor management of the CIP programme? The report presented to Parliament included the following “The report stated, “during the period of negotiation, the marketing agents efforts towards marketing the programme and driving applications was suspended.” This is clear evidence that the current government is unable to manage this programme successfully if they failed to complete this negotiation without causing such a dramatic fall in revenue raised and perhaps why they have chosen to offer the world’s cheapest passport. Is this another failing programme from this government?
The mathematical knowledge of the CIP leadership also leaves a lot to be desired “To support his position, Alfred pointed to St. Kitts and Nevis and Dominica. Like Saint Lucia, the two neighboring OECS countries also operate CBI programmes. St. Kitts entered the business in 1984 and over 16,000 persons have gained citizenship to date. The CEO described the island as the ‘grandfather of the CBI program in the world.’ He said: “They’ve been in this program for 36 years and they’ve given hundreds of thousands of citizenship.” How is 16,000 persons equal to hundreds of thousands? Perhaps with this lack of leadership it is no surprise that CIP revenue fell so dramatically and St. Lucia know needs to be known as the location for the world’s cheapest passport.
The public deserves to know about the CIP programme and why the government has chosen to extend the special COVID-19 bond option? Is that a reflection of difficulty in issuing government bonds the traditional way on the Eastern Caribbean Securities Exchange.
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