WASHINGTON, DC - COUNTRIES across the sub-region are once again being urged to save the revenues from their respective Citizenship By Investment Programmes (CBI) for rainy days and clawback their spending habits going forward.
Since the onset of the pandemic back in 2020, territories, including St. Kitts-Nevis, have utilized their respective programmes to prop up their ailing economies to the tune of millions of dollars without having to approach lending agencies such as the International Monetary Fund.
But just as the region comes out of the ravages of COVID-19, a lot of social programmes are still being sponsored through CBI programmes.
In the case of St. Kitts and Nevis, the Government has increased the number of social programmes available to the nation due to its agenda of governance.
But many of those social programmes were inherited from the previous Team Unity Administration, such as the Poverty Alleviation Programme and the Alternative Pathway Programme better known as the PEACE Programme, and they are very difficult to wean people in the short term.
The Government has revealed that the PEACE Programme is costing it EC$2M per month or EC$24M annually, while the STEP Programme is costing more than EC$1M per month.
So, what does this mean for the country and the state of its CBI Funds which have been the primary source of funding for these programmes?
Nigel Chalk, Acting Director, Western Hemisphere Department, warned that though the programmes have been beneficial to those countries, they are individually volatile at the same time.
“We prefer a system where the CBI revenues are basically saved and some spending is derived to be a stream of income,” he said while responding to a question from SKNVibes at the IMF/World Bank Group press conference this morning (Apr. 14) in Washington, DC.
Back in October, it was recommended at a similar meeting that countries with CBI Programmes should begin cutting back on their spending and save for rainy days in order to buffer their economies for any shocks.
Chalk called for there to be a level of transparency and accountability within those programmes for their sustainability, as they are critical for many territories.
In light of growing concerns for those programmes, Chalk opined: “I think it is really important to maintain the integrity, and actually to improve the integrity of these schemes given their reliance on reserve revenues.”
But just as he reminds that there needs to be more transparency, commendations were given to the ECCU for moving to improve the integrity of the programmes for which they come under intense scrutiny from the European Union and the United States.
Just as the programme comes under scrutiny, it had raked in hundreds of millions of dollars for the Federation, as Dr. Harris had revealed while presenting the 2022 Budget that the Federation gained $500M in 2021.
Underscoring that fact was Premier Mark Brantley, who had issues with revenue sharing from the programme, when he revealed last year that based on his Government’s research, the Federation received more than EC$5.1B or US$1.9B.
