Come one, come all, quick-quick, few questions asked; we’ll lay out the red carpet!
I’m grateful to my Friend Who Shall Be Nameless for pointing me to a fascinating article recently published by an outfit called IMI, which seems to be a voice-piece for the international migration industry, otherwise known as passport-sellers.
The article contains data on Grenada’s CBI Programme up to the end of the first quarter 2023. It’s all good news; the secret is in the title “Having shattered all records in 2022, Grenada CIP breaks them again in 1Q2023.” Great news, kudos to the government. Or is it? Let’s look behind those glowing numbers.
The article is correct about one thing: Grenada is in the midst of a passport-selling boom: “Since mid-2022, Grenada’s CIP (CBI) has been on an upward trajectory that has no precedent among citizenship by investment programmes, in the Caribbean or elsewhere.” Wow, high praise indeed! In the first quarter of 2023, Grenada issued 980 passports under the CBI Programme. This is equivalent to 3,920 new passports per year: a truly phenomenal rise indeed. How did we achieve this?
One word: Russians. “For much of 2022 and Q1 2023, Grenada was the only among its regional peers to continue to accept Russians, which concentrated CBI applicants of that nationality in Grenada.”. Another Russian invasion. We don’t know how many of those 980 passports were issued to Russians, that would involve a level of transparency that is shamefully absent, but it’s probably the vast majority. And these aren’t stay-at-home Russians, keeping that Grenadian passport in their bedside drawer, just in case things get really bad in Moscow. Oh no, they’re travelling Russians, roaming the globe in yachts and private jets, supremely relieved to be free of the dreaded stigma of Russianness.
A stigma fully deserved, lest we forget. While Russian tanks were crushing civilians on the streets of Eastern Ukraine, Grenada alone among the West, was beating a path to Putin’s door: we’ll give your top people a perfectly legal back door, open only to the rich and the shady. Because let’s be clear: any Russian who shells out US$302,000 per Grenadian passport for an average family of 5, is not your everyday Russian. In some way, these ‘new Grenadians’ are either oligarchs, oligarch-adjacent or oligarch-sycophants. Gleefully flashing their shiny Grenadian passports at UK and Schengen border agents, when hitherto they’d had no end of hassles. And every time this happens, those same border guards frown: they don’t like having this loophole flaunted in their faces. And they tell their bosses, and their bosses tell their bosses, until the message reaches the top echelons of government, who don’t like it either, a fact they’ve made abundantly clear to us pesky passport-selling islands: clean up your acts — or face the visa consequences.
Institutionally, one can only marvel at what can only be described as an explosion in efficiency at Grenada’s CBI Agency — bravissimo! The 980 applicants who were processed, underwent detailed due diligence and were issued with new passports represent a 260% increase in output over 2022. Are these dedicated civil servants all burning the midnight oil, to achieve such a stellar increase in output? Or: could it be that to cope with the 3-fold increase in workload, our overworked public servants at CBI (public servants are always overworked) are simply cutting corners? Looking at rejection rates, it would seem that these days, only the most honest, upright citizens in their home countries apply for Grenadian citizenship: the failure rate is a mere 2.3%. In the past, we were a lot more discerning: between 2016 and 2021, fully 12.3% of all applicants were denied Grenadian citizenship, after rigorous due diligence. At a time of global war and crisis that requires even more stringent vetting than before, we are lowering our standards.
Regardless of where this boom in passport money originates, it’s good news for the government’s coffers, right? Wrong; in an equally unprecedented shift, the vast majority of this passport bonanza is not going into government coffers, but into the pockets of private developers. In 2021, 31% of all CBI inflows went into the National Transformation Fund (NTF); however, by 2022/23 that number had shrunk to 18%. Of the EC$552 million mobilised by the CBI, only EC$103 million was paid into the NTF. The problem with this skewed distribution of benefits is that no one knows with absolute certainty what happens to the money paid to developers. Much of which is hidden behind seemingly innocent words: developer fees, finder’s fees, admin fees — get the drift?
We are led to believe that CBI developers have invested EC$379 million in approved projects, since the beginning of 2022. That’s an awful lot of money spent in a small island; where’s it all gone? The 3 big ongoing CBI projects are La Sagesse, Levera, and Mount Hartman; and whereas we can see physical construction works at La Sagesse, the same cannot be said of the other 2, where to date all we see is clear-cutting of vegetation, destruction of mangroves and site works. This is the problem with the real estate option: we know with absolute certainty how much money goes into the NTF; but for the money that goes into real estate projects, we have to take the developer’s word. Judging by the disparity between physical results on the ground, and the high capital expenditures reported by developers, it’s clear that many of them suffer from what’s known in the industry as optimistic accounting bias — you may call it something else.
Where do we go from here? Can we expect this Russian invasion to continue? It would appear not (some would say: fortunately). After much pressure from the USA, the Grenada Government committed to suspending the sale of passports to Russians, by 31 March 2023 (did that happen?). We can therefore expect some slowdown in the number of passport applications for the rest of the year.
If we are to continue selling passports, we should scrap the real estate option, and let all the money go into the NTF. The real estate option is untransparent and is resulting in the creation of monstrosities and carbuncles that have little chance of achieving long-term sustainability. Just imagine if the entire EC$552 million had gone into the government budget, instead of a paltry EC$103 million: imagine the number of drugs that could be purchased for our beleaguered hospital, the teachers and nurses it could pay, the infrastructure it could build. Instead, we have no real idea of where the bulk of passport money goes, nor to whom. If we are to continue to sell our patrimony, then let THE GRENADIAN PEOPLE reap the economic benefits, not a bunch of shady ‘developers’.
The misinformed preaching again….
“Oh no, they’re travelling Russians, roaming the globe in yachts and private jets, supremely relieved to be free of the dreaded stigma of Russianness.”
….Based on what ???
“shady ‘developers”
Mt Cinnamon – doubled in size through CBI, open and successful.
Six Senses – fully funded through CBI opening this year, creating the first internationally flagged luxury hotel through the CBI program
Intercontinental Hotel, another flagship, international brand, currently under construction and so far over 75% funded through CBI sales.
Silversands hotel – open, operating, award-winning and successful
Beach house by Silversands – fully funded by CBI, 80% complete and opening into Q4 of this year
Mariposa – completely renovated, and returned to full operation through CBI funding
“our overworked public servants at CBI (public servants are always overworked) are simply cutting corners”
….The public servants don’t conduct the due diligence it is done by Interpol, FIU and third-party intelligence agencies.
Furthermore, the staffing in the unit has increased substantially to deal with the increased inflow of applications
“In 2021, 31% of all CBI inflows went into the National Transformation Fund (NTF); however, by 2022/23 that number had shrunk to 18%.”
This is not a decision by government to divert funds. This is based on the actual sales of section 10 and section 11 to the applicants. The bottom line is that the developments in Grenada are far more attractive and successful than the donation option and therefore create a higher number of sales.
At least Grenada is getting some money out of the program. You could be like the US and the EU having millions of uninvited “refugees” arriving and relying on citizen taxpayer assistance to survive.
Er . . . . 4 x 980 = what then if not 3920??
If this continues grenada will very soon not be grenada anymore. Many descendants of grenada born abroad have to struggle to get a passport while other nations that want to run from their own countries that have wealth from who knows where can waltz right in as they feel. It’s like government is not bothering to look at the future at all. How many of our nation want these nations passport’s and lands???….
Besides that how has all the money collected so far helped? Where are the developments on the islands that benefit the people and the tourists that come to visit… The roads are the same. All the areas eg. Grenville and all the parishes that need developing are the same. Are there any new factories to can or bottle what we have in grenada to be exported? Isn’t there supposed to be plans in place to show the people how the money is going to be used or has been used? I would have thought selling passports that should have been capped already would have been allowed to bring up grenada and it’s people by giving the entire island and all its facilities a face lift as well as the mentality of the people but there’s not even one thing to show for all the sales that have gone on so far. NOTHING!!!…except an influx of nations that are able to enjoy the island more than its natives. Besides that when the foreigners move in are they going to be able to tell grenadians that they’re not allowed to party, they’re making too much noise and call our own police force to shut down their activities as I’ve witnessed in the past.. Seems all these nations that are being allowed to buy rather than LEASE their way in are soon going to have more rights in the island than the natives… In reality that’s already the case. They’ve already been allowed to purchase all the best locations on the island making the locals 2nd class in their own little island. We’ve already got areas where grenadians aren’t allowed to go. The areas are being policed letting locals know that they’re not good enough to walk those streets and foreigners are being looked out for where the local areas aren’t. How blind is our nation?… We’ll soon find out when the other nations take over. They’ve already got one foreigner in a position of authority. May The Most High help grenadians when other nations take over this tiny island altogether and the natives end up with no rights. That’s where this selling passport business is going to eventually end up…Does government even bother to recognise that if there’s only 100,000 grenadians and they continue selling passports and land to foreigners that they’ll be more foreigners than natives and they, grenadian people, will no longer be running grenada either?
How is 980 a Quarter equivalent to 3920 a yr?
Agreed on every count. If governments decide to sell citizenship let the citizens reap the rewards.
Excellent piece. Well researched.
We have been against CBI for a long time: https://coralcovegrenada.org/2022/06/18/life-after-citizenship-by-investment/ and particularly against linking it to property development.
It’s scandalous that huge sums of money are handed over to developers without proper accountability. It’s a huge incentive to build projects on a scale that isn’t needed and that would never be built if they had to be self-financed.
And, as Mr Samuel says, we don’t even know what’s happening to some of these major developments. Some are apparently going nowhere already having destroyed the environment. How do we know the money is not going straight into overseas bank accounts leaving us with just destruction or concrete ruins?
If we must sell passports to fund government, at least stop the property development element and retain all the money for the country.