Leader of the Opposition, the Right Hon. Dr. Denzil L. Douglas has called on St. Kitts and Nevis Prime Minister Dr. Timothy Harris “to stop his slashing and burning of our Citizenship By Investment Programme that only leads to a race to the bottom.”
“I call upon him to have the Parliament approve and ratify any such programme (Hurricane Relief Fund.). I call upon him to place all revenue receipts from the SIDF and similar programmes into the Consolidated Fund as he promised in his election campaign, and not in an unregulated agency run out of the Office of the Prime Minister of St. Kitts and Nevis,” said Dr. Douglas in a statement Tuesday.
Dr. Douglas pointed out that 10 years ago, his St. Kitts-Nevis Labour Party Administration, in response to the financial demands brought upon it by a series of natural disasters in the late 1990’s and early 2000’s, a dying sugar industry, rising oil prices and the overwhelming need to renew the country’s infrastructure and provide equitably for all of the citizens, devised a number of creative policies to set St. Kitts and Nevis on a path of development and prosperity.
“These policies catapulted St. Kitts and Nevis to the Number One position in the Region. One such policy was geared towards resurrecting and rebranding the St. Kitts and Nevis Citizenship by Investment Programme (CIP) and creating thereunder the Sugar Industry Diversification Foundation (SIDF) option. Hitherto, the St. Kitts-Nevis CIP was completely unknown to the World. The administration which I led created a CIP of which everyone could be proud and from which every citizen – professionals, low-income earners and students alike – could and did in fact benefit equitably,” he said.
Dr. Douglas noted that under the SIDF option of the St. Kitts and Nevis Citizenship by Investment Programme (CIP), investors were required to make a contribution of US$300,000 for a family of four persons with increased contributions for additional family members. The programme was highly valuable, bringing in record levels of revenue that amounted to nearly 25% of the gross domestic product (GDP) in some years.
“With these resources, we re-oriented the economy away from sugar agriculture to non-sugar agriculture and financial and tourism-related services. We created a variety of programmes that provided tertiary level scholarships and laptops for all of our secondary school students, provided small business loans and grants for the local entrepreneur including women, and provided cheap loans for homeowners from all socioeconomic backgrounds. We drastically reduced the Debt-to-GDP ratio from 160% to a mere 60% and increased the primary balance many times over. All this we could do because we had a highly-valued programme that was of platinum standard recognised regionally and internationally,” Dr. Douglas said in the statement released.
He told the nation that the current administration under Dr. Timothy Harris has in two and a half years destroyed completely our CIP and, as revealed in a September 23rd Press Release, hypocritically reduced the value of the Contribution (non-Real Estate) option of the CIP by over 50%.
“That the Prime Minister sought to use the passage of two hurricanes that, in his own words, left our country minimally damaged as a pretext for this decision is extremely unfortunate and fits his usual deceptive penchant squarely. Prime Minister Harris ought to have been upfront as to the motivation for his slash and burn approach to the CIP. The Prime Minister’s decision to create a Fund under the direct supervision of the Office of the Prime Minister that is to consist of some US$180 million, he having abandoned the oversight mechanism that accompanied the SIDF, reveals his intentions to create a Slush Fund for himself, his family, his friends and well-wishers. The Fund Prime Minister Harris is creating perfectly fits the textbook definition of a Slush Fund. Nothing more, nothing less!” Dr. Douglas said.
“As if that were not enough to offend the sensibilities of right-thinking citizens of our great country and the Region, Prime Minister Harris deepens his deception by claiming that the real intent of the watered-down CIP option is to help the disastered countries of Dominica, Antigua and Barbuda and the like. Such is his level of disrespect for our Caribbean brothers and sisters. His approach to helping these countries it would appear is to opportunistically cut the cost of our CIP by 50% to deliberately undercut those same countries’ ability to attract resources through their own CIPs to assist with their recovery efforts after being severely battered by the two recent hurricanes. I liken this to cutting off your neighbours’ legs, then offering them a pair of crutches,” said Dr. Douglas, a former Prime Minister.
“One of my greatest concerns, however, is the serious negative impact the slashing of the rate of the Contribution option of the CIP will have on the Real Estate option. This wrong-headed policy renders the Real Estate option worthless. It is the Real Estate option that provides jobs in construction and related field, and promotes the consumption of materials and transportation services. So many developers who have deeply invested in the Real Estate option woke up on September 23rd to learn that their investment to the tune of millions of dollars is now worth hardly anything. The anticipated time to recoup their investment in real estate has moved from one or two years on average to potentially ten years and over, if ever. Thousands of plumbers, carpenters, masons, electricians and others are now on the verge of losing their jobs, and potentially their properties that have been mortgaged to the bank,” said Dr. Douglas, who accused Prime Minister Harris as reckless and demonstrates little understanding of the interplay between the CIP and the local economy.
“He cares only for himself and his family members who are offering services under the CIP. It is that mindset that has incensed the Real Estate Developers to the point where they are seriously contemplating a class action lawsuit against the Timothy Harris-led administration,” disclosed Dr. Douglas.
He said that the new watered-down CIP programme has unfortunately been designed to issue 4,000 new St. Kitts-Nevis passports in 6 months.
“This is an alarm of immense proportion. This number of applications will compromise the due diligence process thereby potentially admitting many undesirable into the programme. Such development, understandably, will evoke concerns in the United States that terrorists and illicit actors using our passports could get into their country. Canada and the United Kingdom will develop similar anxiety,” said Dr. Douglas.
In closing he said it was important that the investment community understands that while Harris is trying to use fake news of “phenomenal devastation” of St. Kitts and Nevis to raise millions of dollars for his Slush Fund, the real danger is that the country is fast losing it credibility.
“Additionally, with the new CIP initiative not having been ratified by Parliament, it raises legitimate questions as to the validity of the citizenship and accompanying passport derived from this initiative,” said Dr. Douglas, who called on Prime Minister Harris to stop his slashing and burning of the CIP that only leads to a race to the bottom.
“I call upon him to have the Parliament approve and ratify any such programme. I call upon him to place all revenue receipts from the SIDF and similar programmes into the Consolidated Fund as he promised in his election campaign, and not in an unregulated agency run out of the Office of the Prime Minister of St. Kitts and Nevis,” said Dr. Douglas.