Category: News

An IMF mission visited St. Lucia during April 23-May 4, 2018, for the annual Article IV consultation [1] discussions on economic developments and macroeconomic policies. At the end of the discussions, the mission issued the following statement:[2]

“Favorable external conditions and a mild fiscal stimulus sustained growth in 2017. The outlook remains benign, but is subject to significant downside risks. The fiscal position weakened, underscoring the need for corrective policies. Policies to enhance resilience to climate change and natural disasters should be fully integrated into a fiscal adjustment program consistent with attaining the 2030 regional debt target of 60 percent of GDP. Continued progress in financial sector policies and structural reforms is necessary to support economic activity and enhance sustainable growth. ”

1. Favorable external conditions and a mild fiscal stimulus sustained growth in 2017. Continued strong demand from major source markets, the opening of a large new hotel and additional airlift lifted the tourism sector, which experienced the fastest growth in stay-over tourist arrivals in the Caribbean, and benefited from a recovery of cruise-ship visitors. Tourism-related FDI and public investment supported strong activity in construction. Growth was relatively broad-based, with wholesale and retail and transport contributing positively, but agriculture production declined, owing to the lingering impact of Hurricane Matthew. Overall unemployment continued to decline, but youth unemployment remains high. On the back of the good tourism season, the current account balance moved into surplus. Higher oil prices led to inflation turning positive.

2. Growth prospects remain good, but risks are tilted to the downside. Tourism-related FDI and public investment are expected to provide continued support, but weaknesses in the banking sector will continue to be a drag on growth. After a temporary slow-down in 2018 following the completion of major projects, construction activity should pick up again driven by private hotel investment and government infrastructure spending. Tourism should benefit from favorable external conditions and expanded supply, with major investment projects scheduled to be completed by 2020, but will be limited by capacity constraints, including an inadequate road network and an outdated international airport, which the authorities intend to address. Risks to global growth, natural disasters, and fiscal risks weigh on the outlook. Over the medium term, growth prospects are limited by structural bottlenecks, high production costs, and low productivity.

3. The fiscal position weakened in FY2017/18, underscoring the need for corrective policies. The primary surplus declined slightly, reflecting higher current and capital spending. As a result, public debt rose to 70.5 percent of GDP and is expected to increase further based on current policies. The authorities have raised fuel prices, which were capped and limited revenues in 2017/18, and outlined intentions that would help strengthen the fiscal position, including that of a new residency program, but no policy decisions have been taken yet. The plan to develop a system of targeted social assistance will be key to achieve significant fiscal savings while protecting those most in need. To reduce the high cost of servicing public debt, the authorities have secured significant concessional borrowing from Taiwan, Province of China. These loans will finance the revamping of the road network and the airport, the latter of which will be repaid with extra budgetary revenues (the Airport Development Charge).

4. Fiscal adjustment, anchored by the Eastern Caribbean Currency Union debt target, should focus on broadening the tax base, controlling expenditure, and improving financing terms. The upward revision to GDP released in 2017 reduced the debt ratio by almost 13 percentage points to 69.2 percent of GDP, bringing it closer to the 2030 debt target of 60 percent of GDP. However, with public debt now just over 70 percent of GDP and rising, it is necessary to capitalize on the growing economy to reverse this trend. The adjustment should concentrate on streamlining the extensive tax exemptions, which undermine the revenue base and the efficiency of the tax system; and on controlling the government wage bill, inflated by wage increases during the recession, through continued wage moderation and public-sector reform. When feasible, targeted social assistance should replace temporary work programs and non-targeted subsidies. A fiscal responsibility framework would help provide operational targets consistent with the final objective and the discipline required to attain them.

5. Building resilience to climate change and natural disasters is an essential part of the medium-term economic strategy. Leading the region in this effort, St. Lucia is the first Caribbean nation to complete a pilot Climate Change Policy Assessment and has just finalized a comprehensive National Adaptation Plan. Investment plans should now be costed and fully integrated into development plans and fiscal medium-term frameworks, and a financing strategy, based primarily on grants, prepared. Private participation is needed for the implementation of the renewables strategy, which is essential to attaining the emission targets under the Paris accord, lessening reliance on fossil fuels, and reducing high electricity costs. A more resilient economy, with adequate financial buffers, would dampen the human, social, and economic costs of climate change and natural disasters, and contribute to the attainment of fiscal targets.

6. Financial protection against natural disasters requires a layered approach, involving a broad set of tools, including self-insurance, risk transfer, and financial innovation. High public debt and limited risk transfer instruments suggest that self-insurance has a key role in preparing for natural disasters. Considering the historic cost of disasters and their expected intensification, a savings fund of 5 percent of GDP, with a strong governance framework, would provide the necessary resources for relief and reconstruction without increasing public debt. Revenues from the Citizenship-by-Investment program (CIP) and the new residency program, together with receipts from a carbon tax, could be used to finance this fund. The latter, to be introduced gradually with appropriate compensation for low-income households, would also reduce risks to attaining emission targets.

7. Continued fiscal reforms should underpin fiscal consolidation and resilience building. Despite progress made in several areas of public financial management (PFM), improvements are needed to broaden the coverage of public institutions, enhance timeliness and transparency of financial reporting, and strengthen procurement, in line with the recently updated PFM Action Plan. Reviving the public-sector investment plan (PSIP) and further strengthening project appraisal and monitoring will enhance public investment efficiency and adequately support the government’s strategy to build resilience to climate change and natural disasters. A rationalization of tax expenditures, based on a transparent rules-based system, is critical to reduce the risk of base erosion and improve revenue predictability.

8. Financial sector policies need to address promptly legacy issues and emerging risks. Despite a slight decline in nonperforming loans (NPLs) and an uptick in profitability, bank credit to businesses continued to decline. NPL resolution requires rapid approval of new foreclosure and insolvency legislation, which is currently being prepared. Regional and national authorities should create the conditions for the Eastern Caribbean Asset Management Company, which started operating in mid-2017, to efficiently collect and dispose of distressed assets. While bank credit to the private sector has contracted since 2013, lending from credit unions and microfinance companies has increased rapidly, calling for strengthened supervision of these entities and a rapid approval of the regionally harmonized regulation. The ongoing regional initiative to create a credit bureau will help contain future losses from NPLs and facilitate financial intermediation. While the loss of correspondent bank relationships (CBR) has been limited, costs for indigenous banks have increased significantly. CBR-related risks would be further reduced by transferring AML/CFT supervisory powers to the ECCB, further strengthening governance and procedures of the CIP, and establishing a plan to meet international standards on tax rules.

9. Addressing structural impediments and increasing economic diversification would boost sustainable growth and reduce external vulnerabilities. This requires enhancing a weak investment climate and reducing labor market rigidities that delink productivity and wages. Reforms to improve access to credit, including by completing the credit bureau, and reducing the comparatively high costs of trading and energy should remain priorities. Training apprenticeship programs and better aligning the education system with labor market needs would help reduce structural unemployment, particularly among the youth. Strengthening tourism backward linkages with agriculture, and attracting investment into sectors where economies of scale are less important, including information and communications technology, creative industries or medical education and tourism, seem to be promising avenues to increase diversification.

 

Source: imf.org

About one in 10 British civil servants at the European Commission has taken another EU nationality since the Brexit vote, but are nonetheless resigned to scant prospects of future promotion.

Figures from European Union data provided to Reuters and interviews reflect a pessimistic view of the future in Brussels for nearly 900 remaining British staff on the EU executive once Britain leaves the bloc in March next year following its June 2016 referendum.

They also highlight the role of nationality in EU career advancement despite a formal taboo on discrimination according to passport — as some Britons have already found to their cost.

“As Brits, our careers here are already finished,” said one mid-ranking official with over 20 years service at the Commission who, like many of those switching, has now acquired an Irish passport through descent.

“But no one will see me as Irish. This is basically just an insurance policy for now.”

President Jean-Claude Juncker gave British staff a formal undertaking in late March that the Commission would not exercise its right to dismiss them after March 29, 2019, when they lose the EU citizenship that is a normal requirement for employment.

But despite such sympathy at the top for their plight, Britons have already been voting with their feet.

Public data shows that on Jan. 1 this year there were 894 Commission employees whose officially recorded first nationality was British. That was down 135, or 13 percent, from a year earlier and 240, or 21 percent, fewer than at the start of 2016.

Internal data cited by an EU official showed that since May 2016 “slightly above 150” Britons retired, resigned or left at the end of the kind of temporary contract given to a quarter of the Commission’s 32,000 staff; some 65 British citizens were hired, but all but four of these were on short-term contracts.

NEW PASSPORTS

Strikingly, compared to that net decline of 85, “slightly above 100” more Britons also switched their “first nationality” to another of the 27 EU states, notably to Ireland, where many millions of British people have roots, as well as to France.

In a tweet sent on the day after the Brexit vote devastated his colleagues, one British EU official with dual nationality posted a photo of a bottle of Irish whiskey. He wrote: “Time to connect with my Irishness to numb my wounded Britishness.”

Britain allows dual nationality, so those switching in the EU are not obliged to renounce their private UK citizenship.

Conversations with EU officials — none would speak on the record about personal choices — shows some Britons already had dual citizenship and have merely switched to the “first nationality” recorded in Commission records.

Some raced to acquire new passports after the referendum. Others also have another citizenship but have yet to formally switch to it, while many are thinking of or are applying to other countries.

Among these, notably, is Belgium. It has resisted granting citizenship to some EU officials, despite many having spent decades living in Brussels, on the grounds they have not been in the local tax system. Juncker appealed personally to the Belgian prime minister this month to show them compassion.

The issue of nationality in EU careers is a delicate one. Formally, officials “leave their passports at the door”, though officials also expect teams to reflect the bloc’s diversity.

A Commission spokeswoman told Reuters: “We can’t see how changing first nationality … could result in any sort of advantage. Promotions of EU officials are based on merit only.”

Even before Brexit, that view is contested by some who say privately that British colleagues have been passed over for expected promotions or removed from work that superiors feared could cause a conflict of loyalties between Brussels and London.

Some British EU staff say that has offended them, arguing that, if anything, they feel the Brexit vote has strengthened their commitment to a project people back home have abandoned.

“It’s been painful,” said one veteran staffer.

“Since the referendum, I feel much less British — but the world sees me as much less European,”

STIFF UPPER LIP

Even those switching passports see little hope — certainly not in senior positions, where national governments are unlikely to lobby for what one Irish official described as “re-badged Brits”. Like other capitals, Dublin wants jobs for its own.

The number of Commission officials recording Irish first nationality rose by 37 to 520 in the two years to January.

An Irish EU embassy spokesman said the issue of British EU officials taking Irish nationality was “complex” and that the government was “continuing to monitor matters”.

Even without Brexit, Euro-Brits have been a vanishing breed, reflecting what many of them see as long growing indifference to the EU among British voters and successive London governments.

While they once made up closer to the 13 percent of the current EU population that Britain accounts for, they are today just 3 percent of Commission, albeit better represented in the senior ranks, reflecting longer EU membership than most states and more effort to see “national balance” across the top jobs.

Some British staffers speak of serving out time till their pension; others are sticking to EU ambitions, knowing that the Commission does hire some non-EU nationals with special skills.

Rather than linger in roles of diminishing responsibility, some are looking to follow colleagues into the private sector.

A few are tempted to move to a London civil service that may grow thanks to Brexit; others see little welcome from a British establishment they feel has done little for them. Amid anger, grief and uncertainty, there is deal of British stiff upper lip:

“It’s not the end of the world,” said one. “No one’s going to be helicoptered off the embassy roof, Saigon-style.”

 

Source: investing.com

The Russian billionaire did not attend Saturday’s FA Cup final at Wembley when the Blues beat Manchester United 1-0.

A source close to the 51-year-old suggested he was in the process of renewing his visa, and said it was taking a little longer than usual.

Asked about the visa, Security Minister Ben Wallace said: “We do not routinely comment on individual cases.”

Mr Abramovich’s office said it does not discuss personal matters with the media.

• Reality Check: What’s an investor visa?

Reports suggest his investor visa expired three weeks ago.

The delay comes amid increased diplomatic tensions between London and Moscow after the poisoning of former Russian spy Sergei Skripal in Salisbury.

BBC home affairs correspondent, Daniel Sandford said Mr Abramovich appears to be able to run his businesses in Russia without significant interference from the Kremlin, suggesting that he is reasonably close to President Vladimir Putin.

But he said it was not clear if the delay in renewing his visa is in any way linked to the deterioration in relations between the two countries.

Mr Abramovich, who made his fortune in oil and gas in the 1990s, became owner of the companies that control Chelsea in 2003.

According to the Sunday Times Rich List, he is Britain’s 13th-richest man, with a net worth of £9.3bn.

He owns a mansion on Kensington Palace Gardens, the most expensive street in London.

Mr Abramovich is also the former governor of the remote Chukotka region in Russia’s Far East.

He has been a regular visitor to the UK since buying Chelsea, attending many of the home matches, and has been to Wembley for previous cup finals.

His private Boeing 767 left the UK on 1 April. It has since travelled to Moscow, New York, Monaco and Switzerland but does not seem to have returned to Britain.

 

Source: bbc.com

Brexit is fast approaching and the UK’s labour market is feeling the strain. Migrant workers from the EU are heading home and — it turns out — the economy needed them after all. Employers faced with staff shortages are applying for more visas to bring in skilled workers from the rest of the world. This is not a sign that UK companies are addicted to foreign labour or determined to overlook the un­employed natives on their doorsteps. The truth is, there simply are not many idle Brits any more. The share of UK-born people in jobs is the highest on record. Just 1.1m are unemployed, the lowest in more than 20 years, and many need intensive support and training. They are not going to step overnight into the shoes of a Spanish doctor or a German engineer.

This workforce crunch has shone a harsh light on the UK’s approach to non-EU migration. If ministers want to create a functioning system for EU migration after Brexit, then this is a perfect example of how not to do it. The policy is inexplicably generous to some would-be migrants and arbitrarily stingy to others.

On the generous side, the UK offers “ golden visas” for three years to wealthy people. All they have to do is invest £2m in government bonds, share capital or other assets (excluding property). They can apply to settle permanently after three years if they invest £5m. These visas are supposed to attract “wealth creators” to Britain. But being in possession of wealth does not necessarily mean you created it, nor that you will create more of it in a way that benefits the UK. If that is the hope, then requiring investors to buy gilts seems a low bar. The investors’ money will be at no risk, and taxpayers will pay them back with interest. Besides, the UK government has plenty of buyers for its bonds — just look how low yields are. It does not need to sell itself so cheaply.

Some other countries at least make a stab at ensuring that investment visas help their economies in some way. The US’s EB-5 visa programme requires investment in commercial enterprises that create or preserve jobs, though this scheme has had problems too.

Britain only issued about 350 golden visas last year. But the principle is important. Because while the government has opened the door for people with capital, it has put up a wall for people with human capital who want the same opportunity.

If a UK employer wants to hire a skilled worker from outside the EU on a general “tier 2” visa, it must prove the position could not be filled by anyone already in the country. The government has also capped such visas at 20,700 a year in a bid to reduce annual net migration to tens of thousands. For the first time this year, applications have regularly exceeded the monthly cap.

When demand outstrips supply, the government prioritises people in official “shortage” occupations, such as nursing. It then ranks applicants by salary, preferring higher ones. As a result, Britain has been rejecting thousands of skilled workers with jobs to go to. This includes hundreds of doctors and medical professionals whose salaries are no longer high enough to make the grade.

It is bizarre for the government to refuse to allow a hospital in Newcastle to hire a doctor simply because a drug company in Cambridge needs a scientist and can afford to pay a little more. But arbitrary numerical caps lead to arbitrary decisions.

A decent migration policy, for EU and non-EU workers, would recognise that a person’s value to society is based on more than their wealth, or their salary. It would ditch fixed numerical targets, which lead to perverse outcomes. And it would reflect a truth that ministers seem to have forgotten: that skilled people have choices.

The big danger for Britain on the eve of Brexit is that, as ministers debate hubristically which workers to allow in, the workers in question decide they would rather take their skills elsewhere.

 

Source: ft.com

On Sunday, May 20th, 2018, His Highness Sheikh Mohammed bin Rashid Al Maktoum, chairing the UAE’s Cabinet meeting announced the latest decision related to the visa laws: 10 years residency visa for entrepreneurs, investors, specialists in medical, science, research and technical fields, 100% foreign ownership for the onshore UAE companies, 5 years residency visas for students enrolled in the UAE’s universities and the 10 years visa for
exceptional students.

Both legal and business community hailed the UAE’s cabinet decision, which was anticipated since last year’s Ministry of Economy’s announcement. Once the decision becomes law, it is likely that the Federal Law no.2 of 2015 which makes direct reference to the provisions surrounding the formation and the management of the onshore companies will be modified.

Similar to the US EB-1 Visa, UAE’s aim is the recognition of the individuals who are able to demonstrate their extraordinary abilities in particular fields: academic, science or business.

The relaxing of the foreign investment restrictions is meant to attract a higher number of foreign investors willing to call the Emirates, their new home.

The current system allows the investors to hold 100% of a company (FZE) in one of the many free trade zones, but such company is limited at doing business inside the free zone and not in the Emirates per se. Should the investor want to establish a UAE based company, it will need to enter in a partnership with a UAE National, the latter holding a 51% percent of the shares. With the new legislation, the silent partner’s requirement is being eliminated, but we believe there will be certain restrictions in regards to which activities may be carried out under the new legal
frame.

The present laws allow the foreign investors and their immediate families to apply for a 3-year visa, which is conditioned by the renewal of the trade license. Having a 10 years visa, is a major turning point as it will draw more foreigners, allowing them to contribute to UAE’s long-term vision.

The student visas are usually issued for the length of the academic year, however under the proposed legislation, the student visas are to be awarded for 5 years, and respectively 10 years for exceptional students. This decision will allow the graduates to pursue a future career in the UAE, therefore, contributing to country’s constant growth.

The proposed scheme is believed to affect the current investors, professionals and their families falling under the outlined categories (investors, students, scientists, doctors, engineers, etc.), allowing them to scrap any uncertainties and set roots in the Emirates.

Since the Cabinet’s decision is to be implemented by the end of 2018, we may see more clarity along the way.

 

Author: Eduard P. Nedelcu, Esq, Al Safar & Partners, UAE

The legislation will enable the government to begin processing citizenship applications for the Windrush generation – Commonwealth nationals who settled in the UK before 1973 – free of charge. Free citizenship applications for children of the Windrush generation who joined their parents before they turned 18 and free confirmation of the existing British citizenship for children born to the Windrush generation in the UK where needed – will also be able to commence.

People applying for citizenship under the scheme will need to meet the good character requirements in place for all citizenship applications but will not need to take the knowledge of language and life in the UK test or attend a citizenship ceremony.

The scheme also covers the government’s commitment to help members of the Windrush generation who are looking to return to the UK having spent recent years back in their home countries. These people will also be able to apply for the relevant documentation free of charge. In addition, Mr Javid confirmed that non-Commonwealth citizens who settled in the UK before 1973 and people who arrived between 1973 to 1988 who have an existing right to be in the UK are not expected to pay for the documentation they need to prove their indefinite leave to remain.

Home Secretary, Sajid Javid said:

I am clear that we need to make the process for people to confirm their right to be in the UK or put their British citizenship on a legal footing as easy as possible. That is why I have launched a dedicated scheme which brings together our rights, obligations and offers to these people into one place.

I want to swiftly put right the wrongs that have been done to this generation and am committed to doing whatever it takes to make this happen.

A dedicated taskforce, which was set up on Wednesday 18 April, has so far taken more than 13,000 calls with over 5,000 of these calls having been identified as potential Windrush cases. More than 850 people now have documentation following an appointment with the team.

A call to evidence to enable members of the Windrush generation to share their experiences and help shape a bespoke compensation scheme was also launched earlier this month. This will run until 8 June and has already received almost 100 responses.

The Windrush scheme will come into effect on Wednesday 30 May. More information on how to apply for any of the routes outlined in the Windrush scheme is available.

 

Source: gov.uk

If, as many say, Brexit represents a risk to Britain trade and access to the customs union, then no-one has told the world’s wealthy, who have never been so keen to come to this country and capitalise on its financial infrastructure.

In the third quarter of last year the Home Office issued 114 Tier 1 Investment Visas – a rise of 24 per cent over the previous quarter, and an astonishing increase of 247 per cent on the previous year. Simple maths will tell you that is just under a quarter of a billion pounds of investment into the UK economy, and that is before you consider visa extensions that cost up to £10 million. And then there is the investment made by individuals into the UK property market, the stock market, bonds or businesses. The list is endless.

Except the narrative around immigration rarely focuses on high-net worth individuals; when it does, it’s seldomly positive. And there is sometimes a perception that people taking up the government’s Tier 1 Visa are using their wealth to jump the immigration queue.

One of the topics at the very top of the media agenda currently is immigration, specifically the current situation concerning the Windrush generation. Yet just as the Windrush generation has made incredible contributions to this country – as have so many other of our citizens born overseas – this doesn’t mean that others should be denied the same opportunity. Immigration should be fair to everyone who contributes to this country, and that means upholding the letter and the spirit of the law.

Before we go into this in more detail, let’s be clear what the process actually entails. Investment migration enables anyone with £2 million to invest in the UK economy to be granted a Tier 1 Investment Visa. This money needs to be invested in a limited number of ways: in UK Government bonds, or share or loan capital in active, trading and UK-registered companies.

Naturally, this represents an important economic opportunity for the UK, especially at a time of such political and financial uncertainty. The money, which immigrants needs to invest within three months of landing in the UK, brings a major cash injection to the economy, helping to create jobs, sustain start-up businesses, and improve our productivity.

It’s not just the UK that runs investment migration programmes. By the end of 2017 there were over 80 active programmes in most major world regions. Citizenship-by-investment is a $3bn global industry (residence-by-investment being worth considerably more), bringing major benefits to countries around the world. To take just one example, impoverished Greece has enjoyed a windfall of €1.5bn thanks to its own Golden Visa programme.

And we do these migrants a disservice if we only focus on their money. Along with their investment, they can bring a wealth of knowledge and contacts with their home countries that can be of enormous help to business and government.

Of course, having any unchecked investment migration programme is open to abuse, and without oversight and a rigid code of ethics it leaves itself open to claims of corruption, or the potential to circumvent global regulation standards, such as The Common Reporting Standard (CRS), in addition to others.

Where does one start with a code of ethics? We believe that such a document should cover such issues such as integrity and ethical practice, competence and objectivity, confidentiality, conflicts of interest and regulatory compliance – among other issues.

Who should be involved in drawing up this code? In our view, it’s everyone’s business – from government to business to academia, all should pitch in to give their viewpoint on how we can make investment migration both ethical and effective.

And once drafted, will these be adamantine rules – fixed for all time? It’s hard to see how they can be. Investment migration is a relatively new idea, and as we grope towards a truly ethical way of managing this process across different countries and jurisdictions, we will have to accommodate new viewpoints and adapt to changing economic and political circumstances and realities.

In fact, we’ve have made a start on this issue with our Code of Ethics and Professional Conduct: the first stab at creating a worldwide framework for industry best practice. To create the code, we consulted with external academics and professional practice experts to give as well-rounded a view as possible – but we don’t believe that this document puts an end to all debate on the ethics of investment migration.

Rather, we see it as the first draft of a living, evolving document – one that every stakeholder from business, government and academia needs to help extend and improve.

The ultimate goal is to ensure that investment migration brings value to countries of destination and investment, and that the price for residence or citizenship ends up not in the pockets of kleptocrats, but invested in a way that will bring value to ordinary citizens.

What’s more, by being open about the rigorous processes that aspiring citizens must go through, we can avoid the opacity that sours so much of the discourse around investment migration. We can ensure, for example, that we remove speculation that Tier One visas are all part of grand political and diplomatic games – as the coverage of Roman Abramovich’s recent visa troubles has so heavily insinuated.

Investment migration suffers from staying in the shadows, and that’s bad news for the countries who stand to gain so much – including the UK. Every citizen, every business and public body is, in their own way, responsible for making immigration work for all.

 

Source: ibtimes.co.uk

The UAE has approved a new long-term visa system aimed at attracting international investors and high-skilled professional workers.

In a major announcement, the UAE cabinet also approved 100% foreign ownership of companies in the country, which has previously been limited to those companies based in freezones.

The ten-year visa will be made available to investors in the UAE, as well as those who are specialists in medical, scientific, research and technical fields, as well as for all scientists and innovators.

A separate five-year residency visa will be made available to students studying in the UAE, and 10-year visas for “exceptional students”, news agency WAM reported.

The UAE will also review its current residency system to extend the time for the dependent students after completing their university studies, which will give opportunity to consider their practical options in the future.

“The UAE will remain a global incubator for exceptional talents and a permanent destination for international investors,” said Sheikh Mohammed, Ruler of Dubai and UAE Prime Minister.

“Our open environment, tolerant values, infrastructure and flexible legislation are the best plan to attract global investment and exceptional talents in the UAE.”

The UAE’s Ministry of Economy, which will coordinate the implementation of the new rules, will follow up on its developments with a report due to be submitted to cabinet in Q3 this year – which is when the UAE will enforce the cabinet’s decision.

 

Source: arabianbusiness.com

The Board of Directors of Invest in the USA (IIUSA) announced on Thursday, May 17 the departure of Peter Joseph as Executive Director of IIUSA – the national trade association for the EB-5 Regional Center Program.

Mr. Joseph said, “I am proud of the 10 plus years I have spent serving the EB-5 industry during my time as Executive Director. Together, we built a multi-billion dollar industry that supports hundreds of thousands of American jobs at a time our country needs it most. The organization is well positioned with new ideas and leadership to achieve new heights. Working with our members has been an honor and a privilege for which I am eternally grateful. I look forward to seeing where IIUSA and the EB-5 community goes from here.”

“Peter has played an important role in the development of the organization,” said IIUSA Board President Bob Kraft of FirstPathway Partners. “We would like to thank him for his service and wish him the best of luck.”

Under his leadership, IIUSA grew to represent a vast majority of capital flowing through the EB-5 Program. As the industry’s leading membership organization, IIUSA represents more than 260 federally designated EB-5 Regional Centers across the country, serving 47 states/territories.

“Our focus continues to be on advocating for policies that maximize economic benefit to the communities where we work,” said Kraft.

Kraft continued, “Over the next few months, we will conduct a search to find a new Executive Director. During this transition period, it is our priority to find the best individual to lead our organization and help deliver the legislative certainty needed to continue to create jobs and grow the economy.”

IIUSA is on solid footing and looks forward to continuing to serve its members with education, advocacy and international market development.

 

Source: iiusa.org

An IMF mission visited St. Lucia during April 23-May 4, 2018, for the annual Article IV consultation  discussions on economic developments and macroeconomic policies. At the end of the discussions, the mission issued the following statement:

“Favorable external conditions and a mild fiscal stimulus sustained growth in 2017. The outlook remains benign, but is subject to significant downside risks. The fiscal position weakened, underscoring the need for corrective policies. Policies to enhance resilience to climate change and natural disasters should be fully integrated into a fiscal adjustment program consistent with attaining the 2030 regional debt target of 60 percent of GDP. Continued progress in financial sector policies and structural reforms is necessary to support economic activity and enhance sustainable growth. ”

1. Favorable external conditions and a mild fiscal stimulus sustained growth in 2017. Continued strong demand from major source markets, the opening of a large new hotel and additional airlift lifted the tourism sector, which experienced the fastest growth in stay-over tourist arrivals in the Caribbean, and benefited from a recovery of cruise-ship visitors. Tourism-related FDI and public investment supported strong activity in construction. Growth was relatively broad-based, with wholesale and retail and transport contributing positively, but agriculture production declined, owing to the lingering impact of Hurricane Matthew. Overall unemployment continued to decline, but youth unemployment remains high. On the back of the good tourism season, the current account balance moved into surplus. Higher oil prices led to inflation turning positive.

2. Growth prospects remain good, but risks are tilted to the downside. Tourism-related FDI and public investment are expected to provide continued support, but weaknesses in the banking sector will continue to be a drag on growth. After a temporary slow-down in 2018 following the completion of major projects, construction activity should pick up again driven by private hotel investment and government infrastructure spending. Tourism should benefit from favorable external conditions and expanded supply, with major investment projects scheduled to be completed by 2020, but will be limited by capacity constraints, including an inadequate road network and an outdated international airport, which the authorities intend to address. Risks to global growth, natural disasters, and fiscal risks weigh on the outlook. Over the medium term, growth prospects are limited by structural bottlenecks, high production costs, and low productivity.

3. The fiscal position weakened in FY2017/18, underscoring the need for corrective policies. The primary surplus declined slightly, reflecting higher current and capital spending. As a result, public debt rose to 70.5 percent of GDP and is expected to increase further based on current policies. The authorities have raised fuel prices, which were capped and limited revenues in 2017/18, and outlined intentions that would help strengthen the fiscal position, including that of a new residency program, but no policy decisions have been taken yet. The plan to develop a system of targeted social assistance will be key to achieve significant fiscal savings while protecting those most in need. To reduce the high cost of servicing public debt, the authorities have secured significant concessional borrowing from Taiwan, Province of China. These loans will finance the revamping of the road network and the airport, the latter of which will be repaid with extra budgetary revenues (the Airport Development Charge).

4. Fiscal adjustment, anchored by the Eastern Caribbean Currency Union debt target, should focus on broadening the tax base, controlling expenditure, and improving financing terms. The upward revision to GDP released in 2017 reduced the debt ratio by almost 13 percentage points to 69.2 percent of GDP, bringing it closer to the 2030 debt target of 60 percent of GDP. However, with public debt now just over 70 percent of GDP and rising, it is necessary to capitalize on the growing economy to reverse this trend. The adjustment should concentrate on streamlining the extensive tax exemptions, which undermine the revenue base and the efficiency of the tax system; and on controlling the government wage bill, inflated by wage increases during the recession, through continued wage moderation and public-sector reform. When feasible, targeted social assistance should replace temporary work programs and non-targeted subsidies. A fiscal responsibility framework would help provide operational targets consistent with the final objective and the discipline required to attain them.

5. Building resilience to climate change and natural disasters is an essential part of the medium-term economic strategy. Leading the region in this effort, St. Lucia is the first Caribbean nation to complete a pilot Climate Change Policy Assessment and has just finalized a comprehensive National Adaptation Plan. Investment plans should now be costed and fully integrated into development plans and fiscal medium-term frameworks, and a financing strategy, based primarily on grants, prepared. Private participation is needed for the implementation of the renewables strategy, which is essential to attaining the emission targets under the Paris accord, lessening reliance on fossil fuels, and reducing high electricity costs. A more resilient economy, with adequate financial buffers, would dampen the human, social, and economic costs of climate change and natural disasters, and contribute to the attainment of fiscal targets.

6. Financial protection against natural disasters requires a layered approach, involving a broad set of tools, including self-insurance, risk transfer, and financial innovation. High public debt and limited risk transfer instruments suggest that self-insurance has a key role in preparing for natural disasters. Considering the historic cost of disasters and their expected intensification, a savings fund of 5 percent of GDP, with a strong governance framework, would provide the necessary resources for relief and reconstruction without increasing public debt. Revenues from the Citizenship-by-Investment program (CIP) and the new residency program, together with receipts from a carbon tax, could be used to finance this fund. The latter, to be introduced gradually with appropriate compensation for low-income households, would also reduce risks to attaining emission targets.

7. Continued fiscal reforms should underpin fiscal consolidation and resilience building. Despite progress made in several areas of public financial management (PFM), improvements are needed to broaden the coverage of public institutions, enhance timeliness and transparency of financial reporting, and strengthen procurement, in line with the recently updated PFM Action Plan. Reviving the public-sector investment plan (PSIP) and further strengthening project appraisal and monitoring will enhance public investment efficiency and adequately support the government’s strategy to build resilience to climate change and natural disasters. A rationalization of tax expenditures, based on a transparent rules-based system, is critical to reduce the risk of base erosion and improve revenue predictability.

8. Financial sector policies need to address promptly legacy issues and emerging risks. Despite a slight decline in nonperforming loans (NPLs) and an uptick in profitability, bank credit to businesses continued to decline. NPL resolution requires rapid approval of new foreclosure and insolvency legislation, which is currently being prepared. Regional and national authorities should create the conditions for the Eastern Caribbean Asset Management Company, which started operating in mid-2017, to efficiently collect and dispose of distressed assets. While bank credit to the private sector has contracted since 2013, lending from credit unions and microfinance companies has increased rapidly, calling for strengthened supervision of these entities and a rapid approval of the regionally harmonized regulation. The ongoing regional initiative to create a credit bureau will help contain future losses from NPLs and facilitate financial intermediation. While the loss of correspondent bank relationships (CBR) has been limited, costs for indigenous banks have increased significantly. CBR-related risks would be further reduced by transferring AML/CFT supervisory powers to the ECCB, further strengthening governance and procedures of the CIP, and establishing a plan to meet international standards on tax rules.

9. Addressing structural impediments and increasing economic diversification would boost sustainable growth and reduce external vulnerabilities. This requires enhancing a weak investment climate and reducing labor market rigidities that delink productivity and wages. Reforms to improve access to credit, including by completing the credit bureau, and reducing the comparatively high costs of trading and energy should remain priorities. Training apprenticeship programs and better aligning the education system with labor market needs would help reduce structural unemployment, particularly among the youth. Strengthening tourism backward linkages with agriculture, and attracting investment into sectors where economies of scale are less important, including information and communications technology, creative industries or medical education and tourism, seem to be promising avenues to increase diversification.

 

Source: imf.org