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  • The rights of Citizenship by Investment beneficiaries as Community Nationals: What Implications for CARICOM Member States?

    Alicia Nicholls

    Citizenship by Investment (CbI) programmes are utilised as a development strategy by five out of the fifteen countries comprising the Caribbean Community. This article explores the rights which CbI beneficiaries are entitled to as nationals of the Community under the Revised Treaty of Chaguaramas and considers the implications these rights  have for CARICOM member states. Particularly, it explores the tension between the right of CbI operating member states to determine their own citizenship policy versus the right of non-CbI member states to control the entry of perceived “undesirable persons” to their borders, particularly in light of the Caribbean Court of Justice’s ruling in Shanique Myrie v Barbados.

    Citizenship by Investment (CbI)

    CbI programmes offer qualifying investors (as well as their spouse and dependents once they meet certain criteria) citizenship in exchange for an investment in a qualifying activity, for instance, in real estate, a special fund or government bonds.  The programmes are aimed at high net worth individuals (HNWIs) with the expectation that they would lead to targeted foreign direct investment inflows to sectors considered to be of national importance (e.g: hospitality and luxury real estate), job creation and the sharing of expertise and skills. In a previous article I discussed the specifics of the programmes in each territory and the pros and cons of CbI programmes.

    Although CbI programmes have existed in the Caribbean since the 1980s, CARICOM countries differ on the desirability of their usage as legitimate development strategies. At present only five of the fifteen CARICOM states currently offer CbI programmes: St. Kitts & Nevis, Grenada, Dominica, Antigua & Barbuda and most recently, St. Lucia. The Bahamas has been discussing the prospect of a CbI programme for some time. Belize scrapped its programme a few years ago, while Grenada had suspended its programme at one point and now operates its programme by invitation only. The current policy positions of the Governments of Barbados and St. Vincent and the Grenadines is that they will not be offering CbI programmes.

    While it is the right of each member state to determine its own citizenship laws, the issue of granting citizenship on a purely economic basis becomes a regional one considering that CbI beneficiaries (the term I use to refer to persons who have successfully obtained citizenship under a member state’s CbI programme) would be considered ‘Community Nationals’ for the purposes of the Revised Treaty of Chaguaramas and would be entitled to all the rights and benefits such nationals enjoy under the Revised Treaty, including the right to travel to, live and work in another member state, subject to exceptions.

    The CbI beneficiary as a ‘Community National’

    In regards to a natural person, Article 32(5) of the Revised Treaty of Chaguaramas defines a Community “national” as:

    (a) a person shall be regarded as a national of a Member State if such person –

    (i) is a citizen of that State;

    (ii) has a connection with that State of a kind which entitles him to be regarded as belonging to or, if it be so expressed, as being a native or resident of the State for the purposes of the laws thereof relating to immigration; or

    A literal interpretation of this clause provides that any natural person, including one who attains citizenship of a CARICOM member state pursuant to its CbI legislation and regulations, is a national of that State and henceforth considered a Community “national” for the purposes of Article 32(5) of the Revised Treaty of Chaguaramas.

    Rights enjoyed by Community nationals

    These rights are fundamentally economic in nature and can be divided between what I term general (non-discrimination and Most Favoured Nation) and specific rights (right of establishment, free movement of persons, services and capital). These rights are not absolute and are thus subject to exceptions.

    • Non-Discrimination and MFN: Article 7 of the Revised Treaty of Chaguaramas prohibits member states from discriminating based only on the grounds of nationality within the scope of the application of the Revised Treaty except where provided for in the Treaty (Article 7). The Most Favoured Nation clause (Article 8) prohibits Member States from according to other Member States treatment less favourable treatment than they accord to a third Member State or third States. It should be noted that in Shanique Myrie v Barbados, the Caribbean Court of Justice noted that the right to MFN treatment “is a right that enures to Member States and, so far as applicable, to their nationals”.
    • Rights of establishment and to work – The right of establishment includes the right to engage in “non-wage earning activities” which are defined by Article 32(2) of the Revisted Treaty as “activities undertaken by self-employed persons”, as well as the right to create and manage economic enterprises as defined under the Revised Treaty. The following categories of Community nationals have the right to seek employment in the jurisdiction of another member state (a) University graduates; (b) media workers; (c) sportspersons; (d) artistes; and (e) musicians, recognised as such by the competent authorities of the receiving Member States. The Certificate of Recognition of CARICOM Skills Qualification assists in this.
    • Capital – Member states are prohibited from introducing any new restrictions on the movement of capital by businesses and individuals. However, as many CARICOM states currently operate currency controls, this still very much remains highly restrictive.
    • Freedom of services – Member States are prohibited from introducing any new restrictions on the provision of services by nationals in the Community through the four modes of services supply: cross-border, consumption abroad, commercial presence and via temporary presence of a natural party in the territory of a Member State.
    • Rights accruing under treaties with third states – This is not covered in the Revised Treaty. However, as Community nationals, CbI beneficiaries have the right to make use of any double taxation agreements, bilateral investment treaties and any other treaties of which their member State is a party, as well as any such agreements of which CARICOM is a party, including the EC-CARIFORUM Economic Partnership Agreement.

    Freedom of movement is a cornerstone of the Caribbean Community and is one of the areas in which Member States have made the least progress in their implementation of reforms and commitments. It entails the right of entry, as well as the right to live and work in another member state.  It should be noted that the Bahamas has not signed on to this aspect.

    Right of Entry

    Community nationals enjoy the right of entry to any member state and to stay therein for a period of up to six months, subject to exceptions. This stems from a decision taken by the Heads of Government at the Twenty-Eighth Heads of Government Meeting in Barbados in July 2007 where they agreed that

    -: “all Community nationals should receive a definite entry of six months upon arrival in a Member State in order to enhance their sense that they belong to, and can move in the Caribbean Community, subject to the rights of Member States to refuse undesirable persons’ entry and to prevent persons from becoming a charge on public funds.”

    A key issue arises in regards to the right of CbI states to determine their own citizenship laws versus the right of other Member States to limit their risk exposure by denying entry to any such persons whom they perceive as “undesirable persons”, particularly persons from “high-risk” countries. This balancing of rights is of greater currency in light of the escalation of global terrorism threats, rising crime and concerns about money laundering.

    Critics of CbI programmes argue that the non-CbI Member states are at the mercy of the robustness of the due diligence checks and vetting process of CbI states to ensure that “undesirable persons” are not granted citizenship. They also argue that the free movement of persons and capital within the Community provides fertile ground for money launderers, terrorists and organised crime participants to carry out such threatening activities across the Region, with concomitant security and reputational implications for the Community as a whole vis-a-vis third States e.g: in regards to visa waivers.

    While these concerns have legitimacy and it is imperative on CbI countries to manage their programmes to the highest possible standard, security concerns apply not just under citizenship granted under a CbI programme but also to citizenship obtained under regular naturalisation laws. It also should be noted that those Community nationals believed to be fighting with ISIS are natural born Community nationals.

    However, the fear of “undesirable persons” obtaining citizenship under its CbI programme and the reputational threats to its own programme are likely the motivation behind St. Kitts & Nevis’ suspension of the eligibility of Syrian nationals to benefit under its programme.

    Under Community Law, to what extent can a CARICOM State deny the right of entry to a Community national based solely on his or her previous or original country of origin?

    The ‘Myrie Effect’

    Community law and the limits it imposes on the Member States must take precedence over national legislation, in any event at the Community level. It follows from the above that a refusal on the basis of “undesirability” may be based on national law and on Community law, with the proviso that where national law does not conform with the parameters laid down by Community law, it will be the latter that ultimately must prevail.

    (paragraph 69 of the CCJ Judgment in Myrie v Barbados)

    The tension between CbI programmes and the rights of States to deny entry to persons perceived to be threats is heightened in light of the CCJ’s ruling in Shanique Myrie v Barbados which interprets several points of laws relating to the right of entry and the denial of the right and which some critics have unfortunately viewed as curtailing a member state’s public policy right to deny entry to “undesirables”.

    The CCJ in its original jurisdiction applies and interprets the Revised Treaty of Chaguaramas.In brief, the landmark Myrie case involved a claim brought by a young Jamaican woman, Miss Shanique Myrie, against Barbados after she claimed she was discriminated against by being denied entry, and being allegedly subjected to bad treatment by Barbadian immigration authorities. For all the controversy which surrounded it, it is a pivotal case in Community Law.

    Firstly, the case established a precedent wherein a natural person (Miss Myrie) was granted leave to bring a claim against a member state before the CCJ’s original jurisdiction. Therefore, it is possible that a CbI beneficiary can be granted leave to bring a claim against a member state if he/she feels her rights under Community Law were violated.

    Secondly, the Court gave a definitive statement on the law relating to the right of entry and under what circumstances a State may successfully invoke any of the exceptions under Articles 225 and 226. At paragraph 65 of its judgement, the Court found that by virtue of the Heads of Government decision previously referenced all Community nationals have the right to be granted definite entry for a period of six months upon arrival in a member state “without harassment or the imposition of impediments”.

    Thirdly, the Court clarified the law on Articles 225 and 226 of the Revised Treaty which provide exceptions to any of the fundamental rights. The Court noted that as exceptions to a fundamental right any exception must be narrowly and strictly interpreted and the burden of proof rests on the member state that seeks to invoke the ground for refusing entry. As the Court stated at paragraph at 83 of the judgment, “Given the above characteristics of the right of entry it would only be in exceptional situations that entry into Member States will be denied to Community nationals.”

    Fourthly, the Court at paragraph 70 defined “Undesirable persons” within the meaning of the 2007 Conference Decision as “those Community nationals who actually pose or can reasonably be expected to pose such a threat”. For the purposes of the case, the Court was not called on to determine or define what would constitute “a threat affecting one of the fundamental interests of society”. However, it held obiter that:

    in the area of public morals, national security and safety, a reasonable test for assessing such a threat is that, as a starting point, it must be shown that the visitor poses a threat to do something prohibited by national law. In practice that threshold will of course be much higher as it also requires that the threat be genuine, present and sufficiently serious.

    Fifthly, the Court held at paragraph 83 that a State which is refusing entry must give the reasons for refusal promptly and in writing and must inform the person denied that he or she has a right to challenge the decision and must allow the refused national the opportunity to consult an attorney or a consular official of their country or a family member. Member States are also required at the national level to provide “an effective and accessible appeal or review procedure with adequate safeguards to protect the rights of the person denied entry”.

    This does not mean, however, that a State’s immigration authorities’ hands are completely tied and that if there is clear evidence or suspicion that a national is a clear threat, entry cannot denied. It however prohibits the arbitrary denial of entry to Community nationals, including on the basis of their original citizenship.

    While there are fears about CbI programmes and whether they will attract “undesirable persons”, it should be noted that there has to date not been any known case of any individual who has been granted citizenship under a Caribbean CbI programme who has been involved in a major organised crime or other illicit activity.

    Because of the lack of publicised data on the operation of the CbI programmes in the region, it is difficult to know for sure how the programmes are operating and which nationalities have been the most active. However, recently released data for Antigua shows that Chinese nationals, followed distantly by Syria, Libya and Italy have been the main beneficiaries. This highlights the fact that the majority of the persons who apply under these CbI programmes are HNWIs who come from countries with restricted passports and are seeking hassle-free travel for business or leisure, or are seeking to escape conflict-ridden countries. Due to confidentiality, it is unknown whether persons who have been denied approval into one member country’s programme have subsequently had their applications approved in others.

    According to the data provided by the Prime Minister, many of the applicants who have been successful under the Antigua CbI programme are also from metropolitan countries like the US, Italy and Germany. CbI programmes can be complementary to regional integration by fostering intra-regional investment and tourism. It is not unusual for foreign nationals who have established a business in one member state to eventually conduct business, either directly or indirectly, in others. Additionally, HNWIs tend to be highly mobile, travelling for business and with their families for leisure, and therefore could be a target market for high end tourism and yachting.

    The EU Experience and Malta

    A similar tension between the right of a State to control its citizenship laws versus the Community interest played out in the European Union in relation to Malta’s introduction of its Individual Investor Programme by amending its Citizenship Act in 2013. Malta is a small island state of the EU with a population of under half a million and not dissimilar in geographic size to many of the small islands of CARICOM.

    Maltese citizenship not only entitles successful CbI applicants to all the rights of natural-born Maltese but also EU rights, such as the right to reside and work in other EU states and the right to visa-free travel within the Schengen area. The EU raised opposition to Malta’s programme, including by adopting a resolution in January 2014 which argued that Malta’s programme put EU citizenship for sale. After engaging in negotiations with the EU Commission, Malta added a residency condition which provided that any applicant is required to prove that they had been residing in Malta for at least twelve months immediately preceding the issuing of the certificate of naturalisation.

    Conclusion

    CbI programmes have co-existed in the Caribbean Community since the 1980s. What is clear is that as community nationals, CbI nationals are entitled to the same rights as all other Community nationals, including the right of entry into other member states.

    There are however potentials for conflict if there is lack of confidence by member states in the due diligence processes of CbI member states. It would appear from the Community law examined that no member state  may arbitrarily deny entry to the national of another member state, including based on his or her previous or dual citizenship, and where entry is denied, must follow the procedure laid out by the Revised Treaty for denial of entry and the denied national is entitled to appeal.

    Member states must be assured of the robustness of the screening and due diligence process of CbI states. In light of increasing threats in regards to crime, terrorism and money laundering and the security and reputational risks which any lapse may cause for non-CbI states in the context of free movement of labour, CbI states have an increased duty to ensure their programmes are highly managed and regulated. In this regard, it would be useful if CbI countries would use the framework for information sharing as mentioned in the Community Stategic Plan to share data on the operation of their programmes for transparency purposes, including their approval and disapproval rates.

    There are also options such as the addition of a residency requirement in order to establish a “genuine” link between the CbI beneficiary and the member state/Community and the exemption from eligibility of nationals from certain “risky” countries. Without doubt, the constant monitoring and review of due diligence and screening procedures is essential.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

     

     

  • St Lucia’s Citizenship by Investment programme officially opens for business

    Alicia Nicholls

    As of January 1st of this year, St. Lucia’s Citizenship by Investment programme is officially open and taking applications by interested investors. Late last year, Prime Minister, The Hon. Dr. Kenny Anthony formally launched the programme at the Global Citizen Forum held in Monaco. St. Lucia joins St. Kitts & Nevis, Grenada, Antigua & Barbuda and Dominica to become the fifth Caribbean State to offer a citizenship by investment programme.

    A citizenship by investment programme (CbI) offers qualifying investors (as well as their spouse and dependents once they meet certain criteria) citizenship in exchange for an investment in a qualifying activity, for instance, investment in real estate, a special fund or government bonds. In a world of dwindling access to financial resources, a growing number of States internationally are currently offering some form of citizenship by investment programme as a way to raise much needed finance, including for development objectives.

    This phenomenon is not limited to developing countries. Several metropolitan countries such as the US and its EB-5 Immigrant Investor Programme, offer some form of citizenship by investment scheme. Other States offer residency by investment programmes, which grant the qualifying investor certain residency benefits. A Caribbean example is Barbados’ Special Entry and Reside Permit (SERP), while Spain’s Golden Visa is an international example.

    The market for second passports is growing and is an attractive option for high net worth individuals (HNWIs), particularly business persons who come from countries  whose passports are subject to visa restrictions, making it difficult to travel to, and conduct business in major markets unimpeded. For HNWIs from those few countries like the US where personal income tax is levied based on nationality as opposed to residency,  renouncing one’s citizenship and obtaining citizenship of another State through a CbI programme is also increasingly seen an attractive option.

    Some quick facts about St. Lucia’s programme

    Basic Eligibility Requirements

    • Age Limit: Under the Citizenship by Investment Act No. 14 of 2015, a person who is 18 years or over may apply for citizenship of St. Lucia.
    • Dependents: Qualifying dependents include a spouse and a child and/or parent of the applicant or of his/her spouse once the child or parent meets certain criteria provided for in the Act.
    • Net worth: The applicant must have financial resources of at least US 3,000,000

    In addition to these basic requirements, the applicant must fill out an application form, accompanied by the requisite information, documentation and fees and is subjected to due diligence checks.

    All of this will be explained by the Authorised Agent. Authorised agents are licensed by the St. Lucia Financial Services Regulatory Authority and are authorised to act on the applicant’s behalf  in relation to the application for citizenship by investment.

    Qualifying Investments: On approval of the application, the potential investor will be required to make the qualifying investment proposed in his or her application. Under Schedule 2 of the Citizenship by Investment Regulations Statutory Instrument No. 89 qualifying investments are:

    • Investment in the St. Lucia National Development Fund, with the level of minimum investment required depending on whether the applicant is applying alone, with a spouse and/or with dependents. For an applicant applying alone, the minimum threshold is US$ 200,000.
    • Investment in an approved real estate project. The minimum threshold is US$300,000.
    • Investment in an approved enterprise project. The minimum investment required depends on whether it is one or more than one applicant investing. For an applicant applying alone, the minimum investment is US$ 3,500,000 (plus no less than 3 permanent jobs).
    • Investment by purchasing Investment by purchase of non interest bearing Government bonds (5 years holding bond). For an applicant applying alone, the minimum threshold is US$ 500,000.

    Benefits of St. Lucia Citizenship

    • St. Lucia allows for dual citizenship which means the investor is not forced to renounce his or her citizenship of another State.
    • The Citizenship by Investment Board is only allowed to grant a maximum of 500 applications annually which adds an element of exclusivity.
    • A St. Lucia passport allows for visa-free travel to over 90 countries, including the Schengen Area (26 European countries), as well as visa-free travel within the Caribbean Community (CARICOM) and the  other rights of which CARICOM nationals benefit under the Revised Treaty of Chaguaramas.

    For further information on St. Lucia’s Citizenship by Investment programme, please contact the St. Lucia Citizenship by Investment Unit.

    For a general overview of CbI programmes across the Caribbean, please feel free to read my earlier article: Economic Citizenship by Investment Programmes in the Eastern Caribbean: A Brief Look.

    DISCLAIMER: Please note that the information presented in this Article is for general information only and is not intended to be, nor should it be construed as, investment or legal advice. The Author is in no way affiliated with the St. Lucia Citizenship by Investment programme or any of the relevant authorities. The information is taken from sources deemed to be accurate at the time of publication and the Author of this article accepts no liability or responsibility for any errors which may be contained herein or any actions suffered as a result of reliance on the information presented.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

     

     

  • Belize assumes CARICOM Chairmanship

    Alicia Nicholls

    Prime Minister of Belize, the Hon Dean Barrow, has assumed the chairmanship of the Caribbean Community (CARICOM) from January 1st, 2016.

    The chairmanship of CARICOM operates on a fixed rotating schedule with the Head of Government of each Member State assuming chairmanship for a six month stint each. Mr. Barrow, whose  United Democratic Party won its third successive term of office following general elections in November 2015, succeeds Prime Minister of Barbados, the Rt. Hon Freundel Stuart to the Community’s chairmanship. Mr. Stuart had been chairman from July 1st- December 31st.

    In his End of Year Message, the then outgoing chairman, Prime Minister Stuart of Barbados, deemed 2015 “a year of great importance” to the Region, highlighting that 2015 had “demonstrated in no uncertain terms the value of the Caribbean regional integration project to our Caribbean Community (CARICOM), and the influence that our united front can wield in the international arena”.

    Though lamenting the devastation caused by Tropical Storm Erika, Prime Minister Stuart pointed out several CARICOM achievements on the international front, namely the successes at three important conferences: COP21, Financing for Development and UN Post 2015 Development Agenda, and the election of Dominica-born Baroness Patricia Scotland as the first female Secretary General of the Commonwealth. On the regional sphere, Mr. Stuart mentioned the movement made by Member States on the implementation of the CSME Application Processing System (CAPS) , the establishment of the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) and the work of the CARICOM commisions on Human Resource Development and on reparations.

    The new chairman Mr. Barrow, who will hold the Chairmanship reins from January 1st to June 30th, last held chairmanship of the Community in 2009. At the start of this current stint, Chairman Barrow articulated his vision for the Community in his New Year’s message which is available for download on CARICOM Today’s website. Though recognising the harsh economic climate still facing the Region, Mr. Barrow stated that the Community’s resolution is to “continue to strengthen our integration movement to deliver ever-increasing benefits to the people of our Community”.

    To this effect, he outlined several goals which the Community will be working towards in 2016, including:

    • Becoming “more efficient and effective in the conduct of [CARICOM] affairs”,
    • Increasing “the pace of the reform process which includes the Community Five-Year Strategic Plan 2015-2019 “,
    • Encouraging more CARICOM members to sign on to the appellate function of the Caribbean Court of Justice. So far only Barbados, Guyana, Belize and Dominica recognise the CCJ as their final court of appeal,
    • Making the governance arrangements “more flexible and dynamic”, including revising the “arrangements for [the] integration movement to become more effective and relevant to the needs of our people”,
    • Working towards the consolidation of the Single Market,
    • Increasing efforts to combat crime “through initiatives which target those most at risk in our societies”,
    • Using CARICOM’s coordinated foreign policy “to advocate at every opportunity for urgent implementation” of decisions  taken on Financing for Development, the 2030 Development Goals and Climate Change.

    With a clarion call for CARICOM to strive to make 2016 one to remember as “a landmark year for our integration movement”, Mr. Barrow also rightly noted:

    The base factor in whatever we have achieved has been the strength of our unity.  That was never more evident than in the manner in which we rallied together to attain our objectives at the three major international conferences in the past year, particularly at COP 21 in Paris.

    I wish Mr. Barrow a successful tenure.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • 2015 Year in Review for Caribbean Region: Triumph, Tragedy and Hope

    Alicia Nicholls

    2015 has been a year of both triumph and tragedy for the countries which make up the Caribbean region. This article reviews some of the major political, diplomatic and socio-economic challenges and gains experienced by the Region in 2015, many of which would have been covered on this blog throughout the year. It also speaks to the prospects for 2016.

    Political/Diplomatic issues

    General elections led to changes of government in St. Kitts & Nevis, Guyana and Trinidad & Tobago, while voters in the British Virgin Islands, Belize and St. Vincent and the Grenadines bestowed the incumbent governments with a fresh mandate.  In October Haiti held its first round of presidential elections, as well as local elections and the second round of legislative elections. The second round of presidential voting which was slated to occur on December 27, was postponed indefinitely in December.

    On the international stage, the election of Prime Minister Justin Trudeau in Canada was widely welcomed in the Caribbean Region as possibly heralding a new era in Caribbean-Canadian relations. However, the electoral defeat of President Nicolas Maduro’s United Socialist Party of Venezuela (PSUV) in the Venezuelan legislative elections in December has caused concern in the Caribbean about the future of Petrocaribe, a legacy of the late President Hugo Chavez under which Venezuela provides oil to participant Caribbean States on preferential terms.

    In international diplomacy, the Region had two major triumphs. The first was the historic election of Dominica-born Baroness Patricia Scotland as the first female Secretary-General of the Commonwealth of Nations.  The second was the conclusion by 196 parties of an international climate change agreement in Paris, which though not perfect, paid consideration to the interests and needs of small states.

    The catastrophic human and economic devastation inflicted by Tropical Storm Erika in Dominica in August and Hurricane Joaquin in the Bahamas in September-October, and the prolonged drought and water shortages being experienced across the Region are sharp reminders that climate change is an existential threat to the Region’s survival. Access to climate change finance will be critical in financing Caribbean countries’ mitigation and adaptation strategies. Despite the triumph of small states at Paris, this is only just the beginning and a major hurdle will be the ratification of the Agreement by all parties, critically the US.

    Caribbean low tax jurisdictions’ battle against the tax haven smear made by metropolitan countries continued in 2015 after several Caribbean countries were included in blacklists by the European Union and the District of Columbia. At the 8th meeting of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes held in Barbados in October, there was acknowledgement made that the Global Forum was the “key global body competent to assess jurisdictions as regards their cooperation on matters of transparency and exchange of information for tax purposes”. However, the fight is not over.

    On the international front, the border disputes between Guyana and Venezuela and Belize and Guatemala remain unresolved.  The Guyana-Venezuela dispute came to a boiling point after the announcement that Exxon Mobil Corp had discovered large oil and gas deposits in waters of the disputed region pursuant to a contract made with the Government of Guyana. While CARICOM countries have pledged their support of Guyana’s sovereignty, Venezuela’s more aggressive diplomatic engagement of the region in recent months has raised questions about where CARICOM states’ loyalties will truly reside; with a fellow CARICOM state or with a major financier. To further complicate matters, Suriname, a fellow CARICOM State, has restated its claim to a portion of Guyana’s territory. Indeed, the expeditious and peaceful settlement of both disputes will be important for the economic future of Guyana.

    While the US embargo of Cuba remains despite an overwhelming United Nations vote (191 to 2) yet again in favour of ending it, the United States and Cuba made significant advancements in 2015 in the quest towards “normalization” of relations. These included the easing of several travel and trade restrictions, the mutual re-opening of embassies in August and the announcement in December of an agreement to resume commercial flights between Cuba and US for the first time in more than half a century. The future resumption of air links between Cuba and the US is a welcomed development and instead of simply fearing the impact this will have on their US arrivals, Caribbean States should see this as an impetus to increase their marketing efforts in the US market and to improve the competitiveness of their tourism product.

    Socio-economic issues

    Lower oil and commodities prices have had a mixed impact on the region. They have been a blessing for services-based, import-dependent Caribbean countries struggling to overcome the lingering effects of the global economic crisis on their economies by slightly reducing their import bills and narrowing their current account deficits somewhat. For commodities exporting Caribbean states, however, the impact has been negative. Low oil prices have had a deleterious impact on the Trinidad & Tobago economy which is dependent on the export of oil and petrochemicals and was recently confirmed to be in recession after four consecutive quarters of negative growth.

    The tourism industry, the lead economic driver for most Caribbean countries, saw a strong rebound in 2015 with several Caribbean countries, including Barbados, registering record long-stay and cruise ship arrivals, buoyed by increased airlift and cruise callings and stronger demand from major source markets and lower fuel prices.

    However, the Caribbean continues to confront an uncertain global trade and economic climate. As recently as December, Managing Director of the International Monetary Fund (IMF), Christine Lagarde, was quoted as stating that global growth for 2016 will be “disappointing” and “uneven”. Another arena Caribbean countries must watch is the troubled Canadian economy and the depreciation of the Canadian dollar as Canada is one of the major tourism source markets for Caribbean countries and an important market for Caribbean exports.

    According to an Inter-American Development Bank (IDB) report released in December, Caribbean exports are estimated to decline 23% in 2015, with Trinidad & Tobago accounting for the bulk of the decline. A bright spark is that St. Lucia, Grenada and Guyana signed on to the World Trade Organisation (WTO)’s Trade Facilitation Agreement, joining Trinidad & Tobago and Belize. The on-going reforms being made by these countries pursuant to the Trade Facilitation Agreement should help facilitate and increase the flow of trade in these countries. Barbados, Guyana and Haiti underwent their WTO trade policy reviews in 2015.

    The Caribbean region continues to be one of the most indebted regions in the world. Aside from high debt to GDP ratios, several Caribbean countries continue to face high fiscal deficits, wide current account deficits and sluggish GDP growth. Regional governments will have to continue measures to lower their debt, broaden their exports and lower their import bills.

    In September, the world agreed to the 2030 agenda for sustainable development in the form of the 17 ambitious sustainable development goals and their 169 targets. A critical factor for achieving these goals will be access to financing for development. Caribbean countries already face several challenges in accessing development finance owing to declining inflows of official development assistance, unpredictable foreign direct investment inflows and limited access to concessionary loans due to their high GDI per capita. Caribbean States should continue to vocalize their objection to the use of GNI/GDP per capita as the sole criterion for determining a country’s eligibility for concessionary loans.

    The alarming rise in crime across the Region remains an issue which Caribbean countries must tackle with alacrity not just for the safety of their nationals but for the preservation of the Region’s reputation as a safe haven in a world increasingly overshadowed by terrorist threats. 2015 was a year marked by an escalation in terrorism, with deadly attacks in Egypt, Kenya, Paris and Beirut capturing international headlines. Moreover, the news of recruitment of some Caribbean nationals by ISIL (Daesh as ISIL calls itself in Arabic) is an issue which Caribbean States must confront.

    The growing threat of terrorism has caused some concern about the security and robustness of the Economic Citizenship Programmes offered by some Caribbean countries. St. Kitts & Nevis revamped its programme and in light of the Paris attacks, the Kittitian Government announced in December that Syrian nationals will be immediately suspended from its programme. However, the fact that St. Lucia has forged ahead with the establishment of its own programme, accepting applications from January 1st 2016, shows that some regional governments strongly believe the gains outweigh any potential risks.

    High unemployment and youth unemployment rates continue to be major social issues threatening the sustainability of the Region, with consequential implications for crime and poverty reduction and political engagement.

    Prospects for 2016

    Without doubt there are several issues and challenges which confronted the Region in 2015 and will continue to do so in 2016. Moreover, since the “pause” taken years ago, CARICOM continues to face the threat of regional stagnation and fragmentation. While Dominica must be applauded for signing on the appellate jurisdiction of the Caribbean Court of Justice, it is only the fourth out of fifteen  CARICOM States to have done so nearly fifteen years after the Court’s establishment.

    However, in spite of these challenges the Caribbean Region has several factors still going in its favour, including high levels of human development, well-educated populations, political stability and a large diaspora. These are factors which it should continue to leverage but should not take for granted. No doubt a critical success factor will be the ability of regional governments, individually and together, to formulate effective and innovative solutions to the challenges faced, working towards the achievement of the SDGs, and their ability to mobilize domestic and international resources to finance these solutions. Let us also hope that 2016 will be the year where there will be a greater emphasis on increasing the pace of implementation of the Community Strategic Plan 2015-2019. The unity displayed by CARICOM during the Paris negotiations should be a reminder that the Caribbean is at its strongest when united.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. Please note that the views expressed in this article are solely hers. You can also read more of her commentaries and follow her on Twitter @LicyLaw.