St.Kitts and Nevis Investment Program: Handing Out Money like Candy?

January 23, 2015

By: “Luigi Cameron”

Please note: A pseudonym is used to protect the identity of the real author.

St Kitts NevisLet’s explore this question…

St. Kitts and Nevis is a small two island country located in the West Indies. This tiny country, recognized for its quiet untouched beaches, lush tropical forests and vibrant culture is often a go-to destination for many travelers wishing to attend music festivals. Having personally visited the island on a number of occasions, many times I have asked myself how such a small country has been able to sustain its economy. With what appeared to me a simple question at first, made me uncover a frightening reality that I wish to share with you. Here is a little bit about what I discovered:

While St. Kitts’ economy currently relies heavily on tourism (yes I have worn a fanny pack as a tourist on a number of occasions) and the financial services industry (more specifically the offshore banking industry), this was not always the case. Traditionally St. Kitts depended on the growing and processing of sugar cane, however decreasing world prices have significantly hurt this industry in recent years resulting in the closure of the sugar industry altogether. In order to assist those displaced sugar workers that have been impacted by the closure of the sugar industry, the St. Kitts Nevis Government established in 2006 a charity known as the Sugar Industry Diversification Fund (SIDF).

I was particularly interested in learning how the SIDF helped local people and I wanted to determine for myself whether or not the program has an ongoing impact at improving the country. Upon further reading and talking with a local friend of mine I was shocked to discover how the funds of the SIDF were really being used.

The purpose of the SIDF fund is to stimulate economic development of the country by providing support and finance for the development of new and existing industries. The SIDF provides grants, loans and budget support for those who require assistance. The SIDF website states that, to date, over $55 million US has been invested in the development of the country. Initially, to me $55 million seemed like a lot of money and could be a tremendous help to a small population of just over 40,000 persons. I thought when I finally decide to return to St. Kitts to visit in a couple of years I will be able to see the significant impact that this money is having on the country. But my research has told me that I am WRONG.

Before I get ahead of myself, let me inform you of how the SIDF gets its money. St. Kitts allows foreigners to obtain citizenship there by means of the government sponsored investment program that was established in 1984, and requires applicants to make an economic contribution to the country. One of the options is for investors to make a donation to the country’s sugar cane industry development program (SIDF) at a minimum of $250,000 in return for citizenship. The St. Kitts passport has been a popular choice for international investors particularly in China and the Middle East, such as Iran and Syria, who have a hard time travelling around the world with their citizenship. For the wealthy obtaining a second citizenship from St. Kitts is very attractive as it allows for visa free travel. In fact, I have even considered obtaining citizenship for myself as a means of asset protection. I could have been among one of many to contribute to the SIDF. As a potential future investor I was curious to how exactly my money would be used.

The country’s website boasts a number of projects that the SIDF money is being used for ranging from government, education, construction and agriculture to name a few. I thought that some of the education programs and employment initiatives would be nothing but beneficial, and would help struggling students and the unemployed contribute to the development of the country and the establishment of new projects. But with this thought I was only skimming the surface.

Upon closer examination of the SIDF website (You can check out the SIDF site for yourself at http://www.sknsidf.org/) I came across some startling facts. One of them was that the LAST financial statement of SIDF was released in 2011 where it is indicated that the fund had income of over $80 million. I kept looking for the financial statements for 2012, 2013 and 2014 but they were nowhere to be found. There has been no release of financial statements since 2011!! Can you believe that? Clearly there is a lack of transparency from the administration of such a small country.

Obtaining a second citizenship has become increasingly popular and it is safe to say that with the increasing demand for second citizenship the amount in the SIDF has only increased since 2011. Even with outlined projects and programs it is not clear exactly how much money is in the SIDF fund or the amount of SIDF that is currently being invested to stimulate the local economy. I started to ask myself: to whom is the SIDF money going? Could the government be taking millions out of the fund annually? I think you know the answer.

I wanted to get a local perspective on the matter and not just rush to conclusions. After all I am just an outsider (just another tourist with a fanny pack.) I spoke to a close friend of mine who works in a local office in Nevis. My friend told me that money from the SIDF is being allocated to individuals for opening doors and pays the salary for workers to work in offices when there is no need for them to work. Locals are being paid a monthly salary to stare at Facebook all day. Imagine. I wonder if they post things like “I am getting paid for doing nothing”? In my friend’s opinion, the SIDF project entitled People Employment Project which is supposedly designed to create empowerment opportunities for unemployed nationals has fallen short of achieving the SIDF’s initial objective of stimulating economic development. My friend says that the phrase “being on Caribbean time” continues to ring true in St. Kitts and Nevis as paying employees to work when there is no work for them to do makes the office run much less efficiently.

Why isn’t the SIDF investing money in new projects and development? Why isn’t the SIDF investing in something more intelligent?

While the SIDF aims at improving the lives of locals, my friend has expressed to me that living conditions have not improved but rather the quality of life has declined as many people live in poor conditions and there has been an escalating amount of violence on island. Can you believe that there has been over 23 murders in less than a year for a country with such a small population? This means that for a population of 40,000 persons, 1 out of every 2000 persons is shot dead. My friend has also revealed to me that it appears that SIDF money is being handed out like candy as some locals have received money from the SIDF for no valid reason other than having simply asked to get money while others have received nothing at all. There appears to be imbalance in the allocation of funds. My friend questions the structure that has been in place for the allocation of SIDF money and whether the fund is maximizing its potential of helping stimulate the local economy and develop new projects that will create a future income for the Island.

Like I said before, it does not make sense that the government has not made any financial statements since 2011 and the amount of money allocated to projects and persons cannot be accounted for. Is this just bad management of money or is there more to the story? Considering how popular the St. Kitts citizenship program is, I believe that the amount of money in the SIDF has doubled if not tripled since 2011 and that this money is slowly but surely disappearing into certain individuals bank accounts. Perhaps the reason for giving out money like candy to only some individuals while not properly accounting for this money is a mechanism that those in a position of power of the SIDF are using to shield their very own loot bags. Something is just not right. Who knows? Let’s hope that new changes will come in the upcoming election and that change will come to this beautiful small community bringing new hope for future generations.

So the next time you or I visit the beautiful beaches of Nevis and a person opens the door for you at Digicel, remember that the worker is being funded by the SIDF.

Ask yourself: wouldn’t you like to get some candy too?

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Comments

  1. Just keep an eye out, as you correctly stated from your prospective, Let’s hope that new changes will come in the upcoming election and that change will come to this beautiful small community bringing new hope for future generations.

    I have lived on Nevis for a short time and have lived on St.Kitts all since November 1, 2005.
    Thank you.

    Best regards

    Tony Derr

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