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When the dust settles and some semblance of normalcy returns, we will see a clearer picture of what this global pandemic has brought all of us. Just like the world wars that drained economies from east to west, so will this plague that has not only claimed too many lives but billions of dollars in business as well.
We hope to flatten that curve soon, but we are not out of the woods yet. The truth is that we won’t be fully okay until a vaccine has been developed, which scientists say could take anywhere from six months to a year or more. We must accept that the economic consequences of this catastrophe could be much worse than the 2008 financial crisis. Immigrant investors have a distinct advantage but, given the looming downturn, that ship has sailed.
Small islands in a dual bind
For small island developing states that rely heavily on tourism and economic citizenship programs, this will be a painful double whammy. From cruise ship and hotel cancellations to a decrease in citizenship applications, the effects may last a while. Larger nations that offer permanent residency through investment won’t be spared either. This epidemic greatly affects their processing times and possible changes in health screening procedures.
Thanks to their rising wealth, the single largest migrant investor application source is China. As of this writing, the Chinese government has been showcasing that they are getting back on their feet and that the manufacturing powerhouse is open for business. Behind all that is the preparation for a possible second wave of the virus while their high net worth families are busy recuperating lost income.
For these, acquiring citizenships and residencies through investment may not be a priority at this time or for months to come. A reactionary demand from the Chinese market may be short-lived. The 21st century is the era of global travel and tourism has been a cash cow for many countries. Visa-free travel has been a banner for citizenship programs who use it as a selling point to get more applications. Mobility scores have been a chief deciding factor for investors, especially in the Chinese market given their weak passports. With freedom of movement curtailed across the globe, visa-free travel is, for the moment, not an asset. In a few cases, it may have even become a liability.
Small-state CIPs will become flexible on price
Though we are unlikely to see any data, we wonder: How many economic citizens traveling on their second passports at the height of border closures encountered extreme difficulties? Many of them won’t entertain the thought of being repatriated to small islands at this time.
What could be more challenging is that we may see travel restrictions like those ordinarily imposed on, for example, most African nations, turn permanent. Having China as the epicenter of the virus will be a geopolitical nightmare of titanic proportions.
For residency by investment permit holders of European, American, Commonwealth, and other developed economies, the narrative is not necessarily better. Though they may have advanced healthcare systems, these are all enormously overwhelmed now. The huge populations in their city centers do not help the situation either, leading to a false sense of security.
Increasingly, we see a grim economic future ahead but there is always light at the end of the tunnel. Small islands offering citizenship for investment will see the need to implement further reduced fees to shelter their economies from the ongoing tourism slump. This stopgap measure may not be enough.
Food security will become a selling point
If there is one thing this global disease has taught us, it is the value of continuous local food supply. A resource of organic products from land and sea can greatly contribute, not only to the needs of a country’s own people but as a resilient export as well. Furthermore, instead of strengthening individual export production, a combined regional output would help make dents in international demand. Regional harvests such as Caribbean breadfruit or South Pacific mahi-mahi should be considered.
The European Union has been pushing the “Made in EU” branding, so, why not “Proudly Caribbean Made” or “From the South Pacific”? The continued implementation of the Caribbean Community’s CARICOM Single Market and Economy can include this as part of their project.
For its part, the Pacific Island Countries Trade Agreement by the members of the Pacific Islands Forum may also institute something related. Citizenship and residency investments focused on real estate are on the correct path, although real estate tourism should no longer be the focus. We should see more of these investments towards agriculture and fishery, small-scale manufacturing, and the health sector, the pillars of survival in a post-pandemic world.
Healthcare as an additional benefit – and as an investment option
One of the benefits of having an alternative citizenship and residency is the enhancement of the quality of life. Rather than highlighting the right to travel as a reason to acquire citizenship, countries that offer fast-track programs should emulate the larger economies. A great motivation for high net worth applicants to live securely in their new countries could be fore-grounded by offering them easy access to premium healthcare. An investment program for a well-equipped modern hospital instead of a five-star hotel will benefit the entire country and will even attract medical tourism income.
Obtaining another citizenship or residency means that you open your options to a better life for you and your family. That means better security, healthcare, education, mobility, and financial opportunities. In the last five years, we have seen a meteoric rise of citizenship and residency programs. How many of them tick all the boxes?
With decreased wealth, applicants will be more prudent and will find the best options. It may not exactly be a price war, but it will surely be a value-for-money battle. We may expect an increase in inquiries for these programs. Larger states such as Spain and Italy who have been badly hit may widen their residency doors. While smaller economies such as the Solomon Islands, who have yet to launch their citizenship scheme, may see this as an opportunity to undermine competitors.
Only time will tell how the marketplace will have reacted in a year or two, but the mindset of the applicant will remain constant. The programs that tick the most boxes will see the most benefit. A refocus must be done as early as now if these programs are to survive the economic effects of this pandemic.