Moneyland by Oliver Bullough

Author:Oliver Bullough
Language: eng
Format: epub
Publisher: St. Martin's Press

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The passport program probably would have remained nothing but a sordid and barely remembered law on the books of a corrupt and generally overlooked country, had it not been for the price of sugar. In 2005, the European Union finally submitted to appeals brought against it by Brazil, Thailand and Australia, which said it was artificially supporting the price of sugar for its own farmers and thus depressing the world market. This, they said, ran counter to trade deals that the Europeans had signed up to. Brussels agreed to reduce its subsidies, which was bad news for many European farmers.

It was even worse news for a group of twenty or so small countries, mostly ex-colonies with links to Britain and France, which had long enjoyed privileged access to the European market. St. Kitts–produced sugar would no longer share in Europe’s subsidy regime. The country’s most important industry collapsed instantly, and it badly needed to raise some revenue from somewhere else.

At that time there were only three countries that sold passports: Austria, Dominica and St. Kitts and Nevis. Austria’s program has always been small, expensive and bespoke, while Dominica, like St. Kitts, had a reputation for selling cheap passports to anyone who wanted them, for the benefit of a few insiders.

Christian Kalin, of Henley & Partners, was looking for something different. He wanted a model that could be scaled up, which could turn a passport into a prestigious commodity, a financial instrument that would appeal to Moneylanders rather than criminals. As the St. Kitts government stared at the imminent prospect of national bankruptcy, he spotted an opportunity. “In St. Kitts at that time, you had … a very cumbersome process. It took sometimes three months, and sometimes two years, unpredictable, no proper controls. It was very slack,” he told me over tea in a swish west London hotel, while a violinist played tunes by Frankie Valli and the Four Seasons. “We said you need to reform the structure, create a central unit to operate this properly, take it out of the hands of government ministers. And, I have to say, to the credit of the then PM, he saw the point, and the choice was relatively simple.”

At the time, people looking to buy a St. Kitts passport could either buy government bonds or invest in a property development. Kalin suggested a third option: give money to the government, which it would put in a transparently managed Sugar Industry Diversification Foundation (SIDF), which would act like a national trust fund. The government would get some money, the investor would feel virtuous, the world community would be satisfied that the money was not being embezzled, and the investor would gain access to a whole new travel document. To satisfy other countries’ security concerns, he proposed bringing in private sector companies to do background checks on all the applicants.

“Before 2007, there was basically no due diligence; they just checked Interpol, and that’s it,” Kalin told me. “For a program to attract serious applicants, the program has to be serious.

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