Last week the Organised Crime and Corruption Reporting Project (OCCRP) published investigations it carried out on citizenship – and residence-by-investment schemes, also known as ‘Golden Visa’ or ‘cash-for-citizenship’ programmes – which are available in eight EU countries including Malta.
Such schemes have also captured the attention of the European Parliament and of transnational NGO Transparency International, which is appealing to the EU to pay close attention to such schemes so as to safeguard the bloc’s borders from corruption, dirty money and threats to security.
Indeed, the major concern on this programme by such organisations and institutions is that it makes life too easy for persons involved in organised crime, tax evasion and other illicit activities compared to the life of honest and legitimate business people.
Now this is not to say that all those who buy citizenship are involved in illicit activities. I personally am against this scheme, but I am ready to accept that some people buy citizenship for legitimate reasons. But surely, more transparency on such schemes would be most welcome. Let us hope the European Commission report due to be published this year will not be a mishmash of illegible bureaucratic discourse that goes nowhere.
Let us come back to Malta. The OCCRP investigation suggested that the highest number of buyers are from Russia and that others come from countries including Saudi Arabia. Seventy-eight per cent of properties purchased by citizenship buyers are in the Sliema area. Information is otherwise scarce as the government of Malta is trying to reveal as little information as possible on the purchases.
What we also know is that so far Malta’s Individual Investment Programme has generated more than €850 million for the Maltese economy, and that it is a main reason why the country’s national budget has moved from deficit to surplus. This was also highlighted by the International Monetary Fund.
By December 2017, €363 million from the IIP scheme were deposited into the National Development and Social Fund, which received 70 per cent of IIP contributions.
Prime Minister Joseph Muscat recently said that €27 million of this amount was invested by December 31, 2017, and that €335 million remained in the balance. More recently, a report by TVM said that over €80 million were spent by the end of January. One expects a comprehensive and audited report which details and verifies such expenditure.
In the meantime, the government’s appetite for being dependent on such easy money is growing. Its consultation process on whether to extend the programme beyond the original promise of 1,800 applicants has closed and results are due to come out in the coming weeks, according to Identity Malta.
I myself wrote to the government about the process and suggested that consultation should also include public debates to enable proper deliberation, and not just eight controlled questions which government suggested through an online form.
The concern of organisations like OCCRP and Transparency International has to do with the governance and transparency aspects of schemes like Malta’s IIP. As a Maltese national, I am also very much concerned about its social, economic and political aspects.
Does the government’s consultation process include a social impact assessment that verifies the longer term impacts of demographic changes on local communities? Is the government’s economic vision tied to its electoral cycles and to the fortunes of Joseph Muscat and his inner circle?
Is Malta becoming too dependent on this scheme and its offshoots such as real estate at the expense of other economic sectors that may be more sustainable? And does the Labour government aim to use funds generated from the scheme to ‘buy’ votes through the power of incumbency in the upcoming general election? Is Labour also creating a new constituency of passport buyers? Are these fair campaigning methods in a liberal democracy?