Tue | Sep 18, 2018

ECCB: Don’t use CIP for recurrent expenditure

Published:Friday | January 13, 2017 | 3:22 PMCMC

The Governor of the Eastern Caribbean Central Bank (ECCB), Timothy Antoine is urging Caribbean governments administering Citizenship by Investment Programmes (CIP) to be more transparent and not to use the funds collected for recurrent expenditure.

A number of countries within the Eastern Caribbean Currency Union, such as Antigua and Barbuda, Dominica, Grenada, St. Vincent and the Grenadines and St Lucia, offer CIPs in a bid to lure foreign investors to their countries.

Under the programme, investors receive citizenship in return for making a substantial investment to the socio-economic development of the countries.

Antoine told the governments of those islands that they should be “transparent by publishing all of the flow of funds.

“We believe that this is extremely important for people to know how much is collected (and) how is it spent. So we welcome the efforts of the (Dominica) government to establish in the last budget specifically how much is coming from CIP and what it is being spent on,” he said.

“We think that’s important and we also … suggested a template that could be used to publish this information on a regular basis so anybody, here, home or abroad can see this information and understand what is happening in the programme."

The governor said ECCB is also recommending a number of measures to ensure that the funds received under the programme is properly utilised given that “none of us knows how long the CIP will last.”

“Right now Dominica is doing well … but who knows the future. Many of our countries now have such a programme and so we say be prudent by not using the money for recurrent expenditure,” said Antoine. “Don’t use it to pay wages and salaries, don’t use it to pay light bills, because when you do that, if the funds stop you in trouble.”

He noted that in Dominica’s case, the Roosevelt Skerrit government is using money to fund recovery projects resulting from damage left by Tropical Storm Erika in 2015.

“That makes sense because instead of borrowing, the government is using CIP. That makes good sense. We also say use it to fund critical infrastructure,” said Antoine. “Clearly, for Dominica post-Erika there is a need for roads and bridges. We also know the government is going to use some for geothermal development. We believe those are good uses of CIP.”