I had the pleasure of talking to Kristin Surak, an Associate Professor of Political Sociology at the London School of Economics and the author of The Golden Passport: Global Mobility for Millionaires.
During our talk, Kristin detailed why and how she wrote one of the most comprehensive books on investment migration I’ve ever read, and it touches on some major points of concern within the industry.
Ahmad Abbas: Kristin, let me start off by saying I thoroughly enjoyed the book. I just finished reading it, and I found it highly insightful, comprehensive, and entertaining. But one question did come to mind: how did a university professor end up writing one of the best books on investment migration I’ve ever read? Tell us a bit about yourself and how we got here.
Kristin Surak: About nine years ago, I was studying international mobility and looking at so-called “guestwork” programs – schemes that bring workers into a country for a set period of time and usually for low pay. They work and contribute to the country but, in the end, they have a hard time becoming citizens.
Around that time, Malta began its citizenship by investment program. It was all over the newspapers and seemed to be the opposite of what I was studying. Rather than poorly paid foreign workers who have all sorts of barriers thrown up against naturalizing where they are, here was a case of wealthy people getting citizenship in countries they’ve never been to. I was intrigued.
But what got me hooked on the topic was learning how complex the investment migration world is. The media coverage was incredibly superficial. Their line was, “Oh no, countries are prostituting themselves, and it’s only criminals and tax evaders who are doing this. It’s just cash for passports.”
Early on, though, I had the chance to attend an industry meeting and there I realized, “Wow, there’s a big scene around this, there’s a whole industry.” And it’s not just trading cash for passports. There is a time-consuming bureaucratic process and a complex market around it. I was fascinated.
Ahmad Abbas: It reminds me of my first impression of investment migration. It is astonishing to find out about this huge industry running in the background. What were your initial thoughts on the matter as a qualitative sociologist?
Kristin Surak: It was really interesting. Overall, the numbers are pretty small. Of course, good numbers are often hard to come by, and government statistics are still recovering from the COVID lag, but it’s fair to estimate that about 50,000 people, more or less, naturalize through citizenship by investment yearly. It’s an incredibly small percentage in a world of over 7 billion people.
But what intrigued me was how the world of CBI upends many common assumptions about citizenship and globalization.
I wasn’t interested in the academic and moral debates of whether a country should sell its citizenship. It was the complexities of the industry itself that fascinated me. How is it possible to build a market around a sovereign prerogative?
This isn’t as easy as it seems because, in the modern world, only the sovereign can produce citizenship, and it has to stand behind every sale. There’s no secondary market in citizenship – at least not a legal one. At the same time, the state is also the ultimate rule-maker of the market, regulating its operation.
So, then, how do you trust this product when the producer is also the rule-maker? How can you be sure that you won’t get sovereign default and the state just cancels your passport, for example? And this has happened historically, especially in the 80s and 90s. But it is fascinating to see how that has changed now.
Look at Cyprus. When it tried to revoke the citizenship of about 30 investors a few years ago, it got bogged down in courts, primarily because it was offering not merely a travel document but the legal status of citizenship.
Citizenship by investment is much more resilient now than ever, which led me to dive deeper into the workings of the industry. Why do people look for these options? How does the market function? What are the biggest challenges?
The overall scene is fascinating, especially in terms of demand. A lot of people, especially in the West, think that citizenship is all about ensuring equality. But in reality, it undergirds a system of great inequality worldwide since citizenship is a tool for keeping people out.
People with privileged citizenships – and privileged passports – take for granted the rights that they get, not only at home but also abroad. But those with less privileged memberships are far more aware of the inequalities between citizenships across the globe. And because citizenship is a sticky status that follows you wherever you go, the implications are massive in a globalized world. A lot of academic debates miss this.
Ahmad Abbas: Tell me about your experience researching and writing the book. It must have been an interesting journey.
Kristin Surak: Actually, many journeys – to 16 countries on four continents since 2015. In the beginning, when I started going to events and talking to the people in the industry, I felt like an anthropologist studying some sort of subculture. It was great fun.
Early on, I built a database of the programs and compiled any statistics I could get my hands on.
Then, I went to industry conferences in hotspots like Dubai, Shanghai, Hong Kong, London, and Moscow before the invasion of Ukraine. At these events, I got a lot of insights from service providers looking for business or client connections, as well as some of the bureaucrats running programs and even investors and people looking for options.
I built good relationships and kept growing my network to get varying perspectives from different parts of the supply chain. So, when I visited countries with CBI programs, it was relatively easy to meet people on the ground. I talked to bureaucrats, lawyers, journalists, and everyday locals to get their perspectives. All in all, I spoke with over 500 people in 16 countries.
In the book, I integrate these different insights to reveal how the global market works and unpack what this means for globalization more broadly.
Ahmad Abbas: And I can confidently say you’ve achieved that comprehensiveness, but this brings us to one of my favorite parts of the book: Your definition of citizenship. You wrote, and I quote, “Citizenship, in the contemporary world, is a sovereign prerogative over which governments retain exclusive control.” Then, you dive into what makes a citizen a citizen. Would you mind expanding on that for our readers?
Kristin Surak: A lot of people assume that citizenship is fundamentally about identity and some “social contract” with a government in which a person gets rights in exchange for duties to the state.
In contrast to that, I understand citizenship in a way that’s very similar to Dimitry Kochenov’s work: it’s fundamentally a legal status. I can believe that I’m a French citizen and self-identify as French, but unless I have the legal status, the French government isn’t necessarily going to let me in.
Duties, too, aren’t fundamental to citizenship – required military service, usually only for men, is on the decline, and tax is more often tied to where a person is than what citizenship they hold. Plus, citizenship is hardly a social contract since it’s only on very rare occasions that citizenship is an actual choice. We’re typically stuck with the citizenship we’re born into.
A lot of people believe that citizenship is only about the rights it gives a person within a country. But CBI reminds us that citizenship can also bring benefits outside a country – things like visa-free access, residence possibilities, and business opportunities.
In a globalized world where people and money move across borders, these extra-territorial benefits of citizenship are massively important. But it also means that third countries play a big role in determining the value of citizenship as a commodity. The upshot is that geopolitics plays a big role in the market since powerful countries and organizations can influence the value of another country’s citizenship.
Ahmad Abbas: In the book, you don’t stop at the definitions. You have a remarkable roadmap of citizenship by investment’s history, and you also go into detail about the current programs. Based on what you learned and how you analyzed that information, which programs do you think are well-defined and which aren’t there yet?
Kristin Surak: That’s a good question. Determining what counts as a case of citizenship by investment isn’t always straightforward. As a sociologist, I wanted to understand what was going on in practice, not just on paper. So, the definition I use to count programs goes beyond mere legal provisions to look at the actual operations.
However, there are a lot of grey areas when one looks closely. For example, Pakistan has a legal provision, but it’s not clear whether anyone is doing it or if the country is even accepting applications. Cambodia has a provision for naturalizing investors, but there’s a lot of murkiness to the process, government connections are needed, and so forth. It isn’t just a formalized channel that anyone can apply for as long as they tick the correct boxes.
In Austria, it’s possible to naturalize by making an economic contribution to the country, but that contribution is always tailored to the individual rather than being standardized. For me, that’s not enough to count as a program.
In my definition, whether or not a country is offering an active CBI scheme comes down to its structuring and its operation. Based on that, about ten countries are running programs. Still, it’s important to look at why only those select cases have taken off. In the book, I devote a chapter to covering the countries that many people don’t know that much about – the marginal, aborted, and frozen programs.
Ahmad Abbas: Of the programs that are flourishing, I assume five are the Caribbean programs, which you cover in-depth in your book. What interested me there was your comprehensive coverage of how transformative these programs have been for microstate economies. But in a recent article you posted in the Wall Street Journal, you mentioned that much bigger countries and economies, like Turkey, are launching citizenship by investment programs. What’s going on with this transformation, given that economic development is often the motive for starting a program?
Kristin Surak: As you mention, these schemes are crucial to microstate economies; I detail that in my book. The Caribbean programs have evolved significantly since they were first introduced, but what is more interesting is how the countries have evolved with them, following the dynamics of the market. In several countries, the programs are more than ten percent of GDP. Citizenship, for some small islands, is effectively the number one export.
For bigger places, the economic story is less dramatic. In Turkey, a country with a population of 85 million, a CBI program is not going to have the same impact at the macroeconomic level. However, that doesn’t mean that there are no economic benefits or risks. To assess that, you have to look at specific sectors where the money is going, which in Turkey means real estate.
And then you have to look at the structure of the construction and real estate sector overall and the impacts on certain cities, which in Turkey means Istanbul, Izmir, and Antalya. And ideally, you would then analyze what’s going on in specific neighborhoods in these places. It can have a transformative effect in particular localities,
Real estate investment can have trickle-down effects that boost certain sectors as well. It may not be as economically crucial for bigger countries, but it can address specific needs if the right conditions prevail. But the net positive or net negative economic impact depends on how the program is structured. Real estate may be overvalued, projects many never complete, and so forth. Plus, the long-term economic effects can be different from the short-term impact. Accurately assessing the economic impact of the programs requires a lot of nuance.
Ahmad Abbas: But I do think larger countries have to deal with more scrutiny and geopolitical pressure. You actually discuss this in your book, highlighting the almost-program in Albania and the side-stream option in North Macedonia as examples. This brings me to another point: superpower pressure.
You acknowledge the EU’s stance on all of this, but you make an interesting statement that it is the US that is the true puppet master behind the scenes. Can you expand on that a bit?
Kristin Surak: Absolutely. It’s not really the EU, but only specific branches within the EU that have taken a stance on the programs, with the European Parliament making the most noise. They have some security concerns, but in general, the subject plays well to a broader populace that doesn’t like the idea of the rich buying their way in, even if there are a lot of inconsistencies in the arguments they give.
But if you look at how the scene really operates, the US is much more influential, acting as the puppet master behind the scenes in important parts of the global market. It plays a much savvier game than the European Parliament because it’s relatively quiet about its position and influence. Effectively, Washington is watching who goes through the programs as best it can.
Rather than trying to shut them down and drive them into a more nefarious realm, it wants to be in the know – a much more powerful position. The US also has a break pedal over the programs in other countries in its control over corresponding banks. It’s an especially useful threat to wield over microstates that are dependent on imports.
Watching these dynamics reveals the incredible influence of the US globally. Think about this: Washington is able to impose its foreign policy agenda onto the citizenship and naturalization policies of another country. Washington can determine whom another country makes its own. It’s mind-blowing.
We saw this in the Caribbean and with Malta, for example, when the US told the islands to stop naturalizing Russians – and even while it still grants visas to and naturalizes Russians itself. The geopolitical power is astounding. Citizenship by investment is a tiny world, to be honest. But it’s through issues like these that it tells us so much about how globalization really works.
Ahmad Abbas: So do you think a shift in geopolitical alliances, not immediate but down the road, from West to East for these microstates would be a real possibility?
Kristin Surak: I’m reluctant to make predictions, but if that were to happen – if countries with CBI programs were to shift their alliances in that direction – it would be really interesting to watch.
The East – or the Global South – is home to the bulk of demand. Of course, many potential investors are looking for visa-free access to the West, but it’s not the motive of everyone.
Turkey, for example, now accounts for at least half of all CBI naturalizations globally and it doesn’t offer visa-free access to Europe. A long-standing Iranian expat or a Bidoon stateless person in Dubai may seek out CBI options to make life easier in the UAE or the Middle East, rather than for anything to do with the West.
The benefits that citizenship by investment programs offer outside the West are little talked about, but also very important. It would be interesting to see if those become a selling point for key programs as well.
Ahmad Abbas: Speaking about the East, you dissect citizenship by investment’s operational supply chain to a remarkable extent in your book, and you go into detail regarding how the Chinese market works. Do you think other markets, such as the MENA or Russia, will ever reach the same level as the Chinese markets in terms of operational complexity?
Kristin Surak: One of the difficulties I faced when looking into the Chinese market was that it underwent many shifts while I was tracking it. It is ever-changing, and keeping up with it is challenging.
It’s also a massive market. When I first started studying it before Covid, it was half of global demand. But, incredibly, the supply chain wasn’t hooked into the global market in the same way as in other places. The big-name firms that dominated the scene elsewhere were unheard of in China.
Historically, too, it’s a very old market, stretching back more than twenty years. For a long time, the government ran a costly registration system, which added a layer of bureaucracy to opening and growing a business.
Plus only Chinese nationals could run one, leading to some behemoth firms, all Chinese, dominating the scene. Eventually, the government deregulated. Now investment migration firms no longer have to register with the police and pay a sizeable deposit, for example.
But these changes didn’t create an open market: a foreigner cannot simply set up a citizenship by investment consultancy on their own – they still need a Chinese partner.
The upshot is an entirely different market structure to what one finds everywhere else, whether in MENA, India, Russia, and sub-Saharan Africa, in terms of size and operations.
The big question now is what will happen since the very strict quarantine restrictions have been lifted and Beijing is cracking down on investment migration and money leaving the country.
Demand is there, but will potential investors continue to work with Chinese firms, or will they leapfrog them and go to service providers in Singapore, Bangkok, London, or elsewhere? That will be something very interesting to watch.
Ahmad Abbas: You also go into detail about the regulation of the industry as a whole, and that is yet to happen, so I wanted to get your thoughts on this, do you think it is possible?
Kristin Surak: Ironically, perhaps, the very borders that the citizenship industry tries to help people overcome and that generate profits for it are also the borders that separate segments of the supply chain as well. As such, any government that tries to regulate simply runs up against its own jurisdictional limits.
When the US influences things, it’s largely through geopolitical power plays rather than mere legal regulation. To regulate the industry as a whole may be a good project to have, but I’m not sure it can get off the ground.
Ahmad Abbas: I agree. Kristin, I’ve immensely enjoyed our chat, just like I enjoyed reading your book. What I really liked was how I could sense your surprise finding out certain matters. It is extremely well-written, too. To wrap up, I wanted to end with a lighter question: what is the factoid that surprised you the most during your research?
Kristin Surak: Oh gosh. Yeah, that’s such a good question. One thing that caught me by surprise were the complexities of the motives of the people looking into these options. What goes into their calculations, how they identify, what their friends think, all of those issues were absolutely fascinating and wonderfully fun to explore.
I was also surprised by some of the answers I got when I asked local people about how they view their country’s citizenship by investment program. Their observations could be so incisive.
One of the most interesting individuals I spoke to was a DJ in St Kitts. I asked him what he thought about the program, he said, effectively: “Do you know why we have St Kitts? It’s because a bunch of Europeans went to Africa, started the slave trade, and they raped, pillaged, and plundered their way to economic success. So, we’ve got St Kitts, and because of that, we’ve got citizenship.
And what are we doing? We’re selling it, but we’re not raping and pillaging and plundering our way to economic success.” He packed a lot of insight into how globalization really works into that observation.
You can find Kristin Surak’s book, The Golden Passport: Global Mobility for Millionaires, on Amazon.
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