CBI after COVID – Changing needs and new opportunities
By some accounts COVID-19 has just about changed everything we know about the world that we live in. Well, almost everything.
Be other changes as they may, one permanent fixture going forward will be Citizenship by Investment (CBI), the idea of committing a significant long-term investment into a country with the prospect of obtaining citizenship of that country. Where a country is part of a wider political and economic reality, the investment should be seen as an investment into that wider reality. An investment made into Austria, Cyprus, Greece or Malta is just as much an investment made into the European Union. More often than not that fact is overlooked.
CBI is actually much more than ‘citizenship’ by ‘investment’. For sure it can bring successful investors from many different countries, developed and developing, to other countries which need such insights, such expertise and, yes, perhaps in some cases and maybe at some times, even needing some of their funds. The vital issue here is knowing one’s client and knowing their source of wealth. Where there are any doubts upon these points the recipient countries should be protected and the applicants resolutely refused. That is emphatically what happens in serious CBI programmes, with some European programmes having refusal rates as high as a third of applicants presenting themselves.
Of course, CBI is more than this. In most countries where CBI exists, and certainly within the ambit of the European Union, such programmes involve a residence link and many other commitments which must also be fulfilled and which taken together constitute a significant relationship. So it’s not only about the financial investment. It’s about the wider commitment of applicants and their families to their intended country of adoption.
So what is COVID’s impact in all of this?
One thing that COVID has changed is the desirability of certain objects, of certain upmarket lifestyles, certain idols and even certain destinations: Luxury goods manufacturers look on with trepidation at what might happen to spending patterns in this area. Dashed is the perception that life on a cruise ship is the way to live; gone is the gawping craze for personalities from the world of sports, music and the arts; and in all of what has become the COVID hurricane the fancy ideas of many that life in Western Europe and North America are always superior to life in the up-and-coming developing world (if one can even call countries like China that any more): these ideas are completely dead and buried.
Whilst there can be no doubt that cities like New York, London, Milan and others will rebound, and we are working and hoping for that in earnest, there is equally no denying the fact that some of the old world’s shine has perhaps been lost for good. Europe and America’s failure to contain the outbreak of COVID, their creaking hospitals and national health systems, their sobering pleas for Personal Protective Equipment from the likes of Turkey and China, their staggering death tolls amongst the eldest and the poorest. Even if not completely shattering the old world’s positive sheen, these realities have at the very least dented its image.
There are of course other things that increasingly bring the old and new worlds together, not least the other great threat of our age: the reality that is climate change. Crippling floods and destructive hurricanes, truly apocalyptic forest fires: when it comes to these calamities there is no distinguishing today between the developing countries and the richer parts of the Western world. Climate change, even more so than COVID, will be a great leveller: if left unchecked it will take the fortunes of the entire world to a new nadir. Going forward the only true differentiator will be the resilience which countries can bring to bear against the onslaught, but that will come at a great financial cost and against the background of general despair.
How are CBI countries faring?
Many CBI countries have suffered at the hands of COVID but most of them have coped well and are showing the way forward in how to deal with the emergency. And not because they are necessarily richer than other countries, rather because they may have been more alert to the consequences, more methodical in their approach or more committed in their responses. Conscious of the importance of human life, the most successful countries have adapted quickly to the new realities. The country success stories out there should be a matter of solace for their current populations and a matter of interest for future investors seeking a better future for their families.
In many countries a significant portion of funds from CBI programmes has been earmarked to tackle the human and economic crisis associated with COVID: funds which are not available from sovereign wealth funds or resource-rich endowments and which otherwise would have required raising from other sources, possibly third-country taxpayers. Whilst within the EU and UN context solidarity between nations should have prevailed in the face of adversity, in reality self-sufficiency was the only way. Going forward, CBI funding can be a significant contributor not only to urgent health emergency responses but also to longer-term projects which in their small way help protect the planet.
In fact, many CBI countries already face the threat of climate change from the front line. Countries in the Caribbean are sadly not unfamiliar with the devastation imposed by extreme weather. Some other countries have seen floods and fires on a biblical scale. Many of these countries may have beautiful beaches to their name but they have hardly any natural resources to speak of. In many cases perhaps their only significant resource is their people. And perhaps this is why many of these countries have learned to be open and welcoming to newcomers over the centuries. Bringing in new talent to the country is not a new phenomenon. It is only the protocols and the modalities that have changed with the times.
The Task Ahead
Many have argued that after COVID and in the face of climate change the old world must rapidly reinvent itself, wherever possible reinventing its shine. If one may put it that way, the old world must aspire to become the new ‘new world’. As the Secretary General of the United Nations António Guterres has put it, the parallel threats of COVID-19 and climate change require ‘brave, visionary and collaborative leadership’. And to recover well the world must work together to prioritise human health and the environment.
Of course, the ‘old world’ still has a lot going for it: its interesting history, marvellous languages and vast cultural heritage; its democratic and people-centred ways. However, for it to ‘completely’ regain its attractiveness for investors seeking a new home it must solidly defend its built and natural environment. In what can be a race to the top to be welcomed it should compete with the countries of the developing world to be the best of the best of the greener world. Only in doing so can the ‘new’ old world veritably become a reliable partner to the developing world. Facing formidable threats like COVID and climate change, which threaten all of humanity as never before, all states must for their common good be partners in arms. They must tackle the crisis together.
More than ever wealthy investors now crave for stability and security. Post COVID they may also be appreciating more the value of the physical environment in which they and their families might live in. After all, the quality of individual lockdowns has really been a function of just two factors: the quality of one’s residence and, equally importantly, the general surroundings of that residence.
Drawing upon that observation and speaking specifics, it is submitted that countries interested in maintaining their attractiveness for investment-based migration must work harder to ameliorate their immediate physical attractiveness to investors: by prioritising and protecting their natural environment and the threatened animal habitats that go with it; by improving their health systems and levels of preparedness; by generally aiming for their countries to be the best place in the world in which to live in. CBI leaders must be bold in their ambitions and firm in their decisions. They must also continue to work for greater environmental protection and human health at a global level. For whilst mobility of sorts is a positive thing, it is clear that nobody benefits from mass displacements of people desperately leaving their own home.
I would like to think that aside the immediate benefits that it brings to countries administering these programmes, CBI stands for something more: it stands for building a more stable community across the world: one based on a higher aspiration for human health and a global environment which guarantees a future for all within it.