COVID bites off passport sales
Round late March to early April last year, just when the coronavirus pandemic was beginning its onslaught on global economies, the people involved in the citizenship by investment (CBI) programme here began noticing something unusual. While interest in the programme was "sky high," according to one agent, demand had fallen sharply.
"What COVID would have done is zero in on people, on the prospect of being trapped in countries where you had a public health crisis and they have the means to get out, but they can't," said the passport agent who spoke to The Sun on condition of anonymity because of the sensitive nature of the scheme.
Troubled by this development, the government authority that runs the scheme, the CBI unit, began a probe to determine the cause of the fall in demand. It discovered that the closing of international borders had kept prospective buyers at bay because they were unable to file the required application documents. To get around this problem the unit introduced an online application system, revealed Emmanuel Nanthan, the head of the unit.
"At the beginning of the COVID we had a slowdown because people couldn't get documents in, but we . . . introduced a system where you could apply online, provide all your documents online, so they could submit the applications and submitting all the files online, so they did that and we ok," Nanthan told The Sun. "Our numbers were not really affected."
The CBI unit boss could not say how many passports were sold or how much the country earned from sales last year or since the onset of COVID-19. However, he indicated that the numbers were "pretty much in keeping with what was done the previous year."
"We had a slowdown in the programme around March, April of last year, when COVID was fresh out. Outside of that, we haven't had much of a difference, so we have continued pretty strong with the programme," stressed Nanthan. "So we okay, we okay."
According to the recurrent revenue budget for the fiscal year ending 30 June 2020, government anticipated collecting EC$417,500,000 in 2019/2020, and similar amounts during the next two financial years. The programme earned EC$226 million in 2018/19, the prime minister, Roosevelt Skerrit, had stated when he presented the 2019/20 budget, a figure the opposition leader, Lennox Linton, had indicated was over EC$1.2 billion short, based on the administration's own report on the number of passports sold that year. This had taken Skerrit by surprise and the government has never satisfactorily explained the discrepancy.
Despite the optimistic picture painted by Nanthan, passport agents with whom The Sun spoke indicated that while interest in the programme remains high, there's no doubt COVID-19 has taken a bite out of sales.
"Simply put, like everything else it's had an impact," said one agent, explaining that because of the restrictions on travel due to the virus, it was virtually impossible to market the programme effectively. "You couldn't do the type of in-person marketing that is required, and this is a very personal, personal business in a way, meaning that it requires a lot of faith and confidence in people. It's not something you can generally discuss on Zoom. And people may have cash flow issues also, and so, they would differ, except if it's something that is urgent on their part."
Another agent who does extensive business in Asia told The Sun despite the digitisation of the application process – which he contended took place following hurricane Maria in 2017 and not after the onset of COVID-19 as Nanthan had said – business has taken a brutal blow.
"Because they cannot travel, it's been difficult for that market simply because they have to get documents notarised and certified, and anybody who has to cross borders to certify documents, it's basically almost impossible," this agent insisted. "[So], yes, it would have an impact, definitely."
While no one was willing to provide figures, a true picture of the pandemic's impact on passport sales can be found in a just-released report by Investment Migration Insider (IMI), entitled, "Investment Migration After COVID - Trends and Outlook 2021."
In the report released last Monday, the online portal for the citizenship and residence by investment industry said while 55 per cent of firms had conceded in April last year that inquiry volumes had dropped following the onset of the pandemic, 71 per cent of service providers said the number of inquiries they receive had risen this year.
Of concern to Dominica and the rest of the Caribbean is the finding that the Caribbean and Vanuatu, along with the North American residence by investment programme, were seen as the categories which stand to lose most from the pandemic. On the other hand, Dominica recorded a slight increase in application approval volume in 2020, behind Thailand's Elite scheme which was up 25 per cent, Vanuatu's development support programme – one of two citizenship programmes in the country (up 26 per cent) and the Turkish programme which skyrocketed by 300 per cent.
The IMI survey also found that industry executives didn't list Dominica's CBI among the most popular programmes offered by their companies over the last 12 months, while it was listed among those suffering the greatest drop in popularity., although eight per cent said it was their best selling programme. This is better than both Antigua and Barbuda and Grenada at five per cent, but only half as good as the St. Kitts and Nevis scheme. As to the programmes expected to be the best selling ones next year, Dominica's CBI at 4.8 per cent, shared the bottom slot with Malta, St. Lucia, the United States employment-based programme, Vanuatu and Turkey. Portugal (21 per cent) and St. Kitts and Nevis (14 per cent) were the top two, according to the IMI executive survey.
"A lot of countries have programmes and my discussions with other providers in the industry indicate that there's been a general slowdown," one agent told The Sun. "You may have one or two exceptions, but generally speaking [there's been a slowdown] - and this is to be expected."