EDITORIAL - Citizenship for investment good idea

The last time this newspaper checked, there was no rush of capital into Jamaica - despite the efforts of the Government's investment promotion agency, JAMPRO.

Last year, for instance, foreign direct investment (FDI), despite a two-thirds jump over the previous year, was a mere US$362 million, or less than half of the annual average of US$800 million for the second half of the last decade.

Indeed, since the collapse of the global financial markets in 2008, the rate of recovery for FDI in Jamaica has, broadly, lagged behind its peers in Latin America and the Caribbean. And domestic capital for investment is scarce, especially for what is required to jump-start an economy that has been largely stagnant for 40 years.

The upshot of this is government debt of nearly 150 per cent of national output, whose servicing requires more than 40 per cent of the Government's Budget and more than half of what it collects in taxes and grants. That translates to a run-down physical and social infrastructure and an official unemployment rate of 14 per cent, but with real joblessness perhaps 20 percentage points worse.

That is why we disagree, on a number of fronts, with Francis Kennedy's ideas on how to induce rich foreigners to put their money in Jamaica in a cash-for-residency/citizenship scheme. In fact, we would urge the Jamaican Government to proceed with urgency with a capital-for-citizenship scheme before, like with too many things, we completely miss the opportunity.

Mr Kennedy would have prospects jump through hoops. We believe that the process can be easy without sacrificing the requisite safeguards.

In any event, we believe that Mr Kennedy, the president of the Jamaica Chamber of Commerce, has his eye on the wrong ball.

He is concerned about a lot of people "invading" Jamaica to "run isolated entities" and, therefore, believes that any programme to have high-net-worth individuals call Jamaica home should focus on investments in "particular projects".

Our emphasis is on capital formation, growth in domestic savings, and net investments, and having these translates to job creation and economic growth.

Further, we would remind Mr Kennedy that should Jamaica throw its hat into the ring for this type of capital, our competition would not only be those countries in the Caribbean that have already gone this route. So, too, have many of the global economic powerhouses.

OFFER MORE TO INVESTORS

For 20 years, the United States has issued EB-5 visas that allow residency, after two years, and green cards to people who invest US$500,000 in projects that create at least 10 jobs. The scheme has brought in nearly US$7 billion and created 50,000 jobs.

If you have net worth of CDN$1.6 million and also have half of that amount in free cash, you can invest it interest free, for five years, in Canadian government bonds or other approved instruments, and gain residency and a fast-track to citizenship.

In Britain, if you put £2,000 investment into a business which you will run yourself and also have money in the bank, you can have residency for up to five years and citizenship in six. That path to citizenship can be accelerated with higher investment. Australia, too, is in the market.

Jamaica, if it wants a piece of the action, has to be competitive.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.