The citizenship bubble of Malta

Malta golden passport 1

Many issues are involved in the citizenship debate.

The government clearly considers Maltese citizenship as just another commodity, which it can milk. Initially it even removed the transparency rule from the statute book, which rule ensured the publication of the names of all those who acquired Maltese citizenship.

Whereas local public opinion was completely ignored, the Labour government reacted to the international media coverage by announcing that it will reverse its ditching of transparency. Yet its reaction may be too late as the damage done to Malta’s reputation is not easily reversed.

The international media queried the unconventional methods used to generate the finance required by the Maltese state.

Within EU circles it is clear that issues concerning citizenship are a competence reserved to member states. Yet the  Schengen dimension of EU citizenship cannot be ignored.

The citizenship scheme is attractive because, through it, the prospective citizen attains freedom of movement within the EU.

It is a very serious concern which can only be adequately addressed if the due diligence process is foolproof.

The problem is that, to date, the Maltese Government has already signalled that it is not that much concerned by the impact of persons who are associated with a fraudulent past, a case in point being government advisor Shiv Nair who is listed permanently on the World’s Bank blacklist.

Another recent example is China Communications Construction Company Limited, also on the World Bank blacklist. This Chinese Company will carry out (gratis) the feasibility study for a Malta-Gozo bridge on the basis of the very friendly relations between the two republics, we were told. (I had the impression that countries had no friends, they just have interests!)

This follows the earlier selection of Lahmeyer International as an advisor to the Gonzi Government. Lahmeyer International too was on the World Bank’s  blacklist.

Past performance indicates that due diligence is not an area in which the Republic of Malta has excelled.

Is it a sale or is it an investment? In fact it is a bit of both. It is surely an unconventional way of raising finance. Its major characteristic is that it focuses on the short term benefits and ignores the long term impacts.  The selling price can give immediate results: it can finance the start-up of specific projects. Whether these will be successful is another matter altogether. The impacts of an investment scheme will take more time, its a long term exercise.

The method of payment selected for the purchase of citizenship is clearly based on the St Kitts and Nevis model in the Caribbean.  In St Kitts and Nevis, payment for citizenship is received by the Sugar Industry Diversification Foundation and, subsequently, invested. The investment made is not at the discretion of the applicant for citizenship but a decision by the country dishing out the citizenship.

Public opinion considers that citizenship should be acquired through establishing solid roots in the country. Establishing minimum residence criteria and committment to the economic development of Malta through investment and job creation are essential criteria to be linked to the award of economic citizenship.

Government has done well, even though late in the day, to declare that it will reverse its secrecy stance. The declaration by Deputy Prime Minister Louis Grech that the regulations being drafted to implement government’s proposal will ensure that the names of those granted citizenship under the new legislation are public is welcome. This new position adopted by the government links with and reinforces the public committments made on the need for more robust due diligence.

It is, however, clear  that regulations alone will not suffice to entrench transparency in the citizenship scheme.  Amendments will also be necessary to the main legislation, in particular to remove reporting restrictions imposed by Parliament on the regulator.

The citizenship debate was also characteristed by the radical position taken by the Nationalist Party that, once back in office, it would not only take steps to scrap the new citizenship scheme but that it would, moreover, withdraw citizenship granted under the provisions of the scheme.

The Attorney General has advised the government that the PN’s proposal would be unconstitutional and would infringe human rights. Such advice was confirmed by the Dean of the Faculty of Law and by constitutional expert Ian Refalo.

The PN has declared that it is in receipt of legal advice reinforcing its position on the withdrawal of citizenship granted.

Whilst the Prime Minister has published the advice received from the Attorney General, the Leader of the Opposition has failed to follow suit. The Leader of the Opposition needs to be consistent. He cannot chastise the government for being secretive whilst simultaneously withholding important information from the public. It is not just the government which needs to be transparent.

The availability of both government and opposition to meet and discuss possible modifications to the citizenship scheme is welcome. Hopefully the wider national interest will prevail.

published in The Times Saturday, 23 November 2013

Advertisements

Sal-ponta ta’ imnieħru

nose2

Għall-Kap tal-Opposizzjoni Simon Busuttil, il-mod kif żviluppat l-istorja tal-bejgħ taċ-ċittadinanza għall-prezz ta’ €650,000 hi sħaba sewda għax il-Gvern irrombla minn fuq l-Opposizzjoni. Simon Busuttil kompla jgħid li dak li ġara hu ta’ theddida għad-demokrazija.

Il-Gvern wasal għall-konklużjoni li l-iskema tal-bejgħ taċ-ċittadinanza  hi mezz tajjeb biex bih jiġbor il-miljuni għal numru ta’ snin, biżżejjed biex ikollu l-mezzi ħalli jiffinanzja l-programm politiku li jrid iwettaq mingħajr ma jżid taxxi. Jidher li ngħata pariri dwar dan kemm mill-konsulenti tiegħu kif ukoll minn dawk li nirreferu għalihom bħala lobbyists.

Il-Gvern geżwer il-proposta tiegħu fis-segretezza. Fatt li saħħah l-argument li minkejja d-due diligence kollha li jista’ jkun hemm xorta hemm il-possibilita ta’ karattri mhux mixtieqa li japplikaw għal u jakkwistaw din iċ-ċittadinaza.

Li kieku l-Gvern aċċetta s-suggeriment li jneħħi s-segretezza, proposta li saret mill-Alternattiva Demokratika,  mill-Opposizzjoni, kif ukoll mis-soċjeta’ ċivili, argument qawwi kontra din l-iskema taċ-ċittadinanza kien ikun eliminat.

Il-konsegwenza tal-iskema kif approvata mill-Parlament hi li Malta tidher li biex iddaħħal il-flus hi lesta li tiddefendi l-interessi ta’ min ma jridx jikxef l-identita tiegħu.Issa dan kollu jmur kontra r-reputazzjoni li Malta kisbet tul is-snin bħala ċentru finanzjarju serju u ta’ min jafdah. Sfortunatament din ir-reputazzjoni tajba inevitabilment ser tittappan u dan minħabba li s-segretezza tal-iskema taċ-ċittadinanza inevitabilment ser tkun assoċjata mal-idea ta’ tax haven. Dan kollu jista’ jwassal għal impatt negattiv fuq is-servizzi finanzjarji li huma ibbażati f’Malta bħala riżultat ta’ din ir-reputazzjoni tajba. B’mod li dak li l-Gvern idaħħal mill-iskema tal-bejgħ taċ-ċittadinanza jintilef minn banda oħra.

Imbagħad hemm l-issue tal-prinċipji involuti. Fir-realta’ hawnhekk ingħataw messaġġi konfliġġenti. Għax fil-prinċipju hemm qbil maċ-ċittadinanza ekonomika. Id-differenza ta’ opinjoni hi dwar x’inhu meqjus bħala investiment aċċettabbli. Il-Gvern għażel mudell ta’ donazzjoni “żgħira” minn għand numru imdaqqas bħalma hu ipprattikat f’diversi pajjiżi fil-Karibew filwaqt li l-kontro-proposta hi l-mudell Awstrijak ta’ investiment sostanzjali.

Il-kuntrast bejn iż-żewġ mudelli hu li l-mudell li għażel il-Gvern iwassal għall-fondi direttament fil-kaxxa ta’ Malta li dwarhom ikun il-Gvern li jiddeċiedi kif ikunu investiti. Min-naħa l-oħra l-mudell Awstrijak idum iktar biex jagħti r-riżultati. Apparti dan dwar l-investimenti mill-mudell Awstrijak il-Gvern, ftit li xejn ikollu kontroll fuq kif jitħaddem.

Bħalissa l-istampa internazzjonali qed tirrapporta dak li Malta qed toffri għall-bejgħ passaport għall-Unjoni Ewropeja. Nistennew u naraw kif ser jiżviluppaw l-affarijiet u l-konsegwenzi.

L-issue kollha taċ-ċittadinanza hi deċiżjoni politika li ma naqbilx magħha għax hi ibbażata fuq konsiderazzjonijiet ta’ benefiċċju “short term”.  Fil-waqt li l-anqas dan l-impatt “short term” ma hu assigurat għad irridu naraw jekk l-impatt negattiv antiċipat fuq is-servizzi finanzjarji iseħhx. Filwaqt li nixtieq li dan ma jiġrix, issa hu ċar li għandna Gvern li jħares sal-pont ta’ imnieħru.

Il-logħob biċ-ċittadinanza ekonomika

Chess.01

Il-logħob biċ-ċittadinanza Maltija qed idejjaq lill-kulħadd.

Li jkun possibli li tingħata ċ-ċittadinanza lil min jagħti kontribut għall-iżvilupp ekonomiku tal-pajjiż hi proposta tajba. Jeħtieġ iżda li jkunu indirizzati żewġ diffikultajiet.

L-ewwel diffikulta’ hi dwar jekk il-kontribut għandux ikun ammont żgħir (relattivament) mingħand diversi persuni li miġbur flimkien jintuża mill-Gvern biex jiffinanzja inizzjattivi partikolari [x’inhuma għad irridu naraw].  Dan hu li jsir f’St Kitts u Nevis fil-Karibew permezz ta’ donazzjonijiet lill-Fondazzjoni dwar id-diversifikazzjoni tal-Industrija taz-Zokkor [Sugar Industry Diversification Foundation].

Min-naħa l-oħra fl-Awstrija l-impenn hu wieħed ta’ kontribut dirett tal-individwu fl-ekonomija mingħajr ma juża l-istat bħala intermedju.

L-għażla reali jiġifieri hi bejn min ikun diġa ta’ prova ta’ kontribut għall-iżvilupp ekonomiku tal-pajjiż u min jagħti kontribut ta’ €650,000 li wara jitħaddmu mill-Gvern flimkien mal-kontribut ta’ ħaddieħor.  Għalija l-ewwel triq, dik imħaddma mill-Awstrija hi iktar serja u marbuta mar-riżultati miksuba. It-tieni triq, dik ibbażata fuq il-prattika f’St Kitts u Nevis, hi dgħajfa u mhux neċessarjament li tagħti riżultat. Kullma tagħmel tagħti l-flus f’idejn il-Gvern li jista’ jħaddimhom tajjeb u jista’ jħaddimhom ħażin.

Mela d-differenza bejn iż-żewġ sistemi hi li waħda tagħti ċ-ċittadinanza ekonomika li min ikun diġa tak ir-riżultati u l-kontribut għal titjib ekonomiku filwaqt li oħra tippremja biċ-ċittadnaza ekonomika lil min jagħtik il-finanzi biex tipprova tieħu inizzjattivi. M’hemmx bżonn tkun għaref biex tikkonkludi li l-ewwel  sistema hi bil-bosta aħjar mit-tieni.

It-tieni diffikulta hu dik li tissejjaħ due diligence. Jiġifieri li tgħarbel lil min japplika biex tara jekk hux fl-interess tal-pajjiż li jingħata ċ-ċittadinanza. Il-proposta tal-Gvern hi li d-due diligence jagħmluha Henley and Partners (konsulenti tal-Gvern) li ser imexxu huma stess l-implimentazzjoni tal-iskema anke jekk id-deċiżjonijiet finali jeħodhom il-Gvern.  Ikun ferm aħjar li min imexxi l-iskema (u li ukoll ser imexxi l-quddiem applikazzjonijiet ta’ klijenti tiegħu stess) ma jkunx hu stess li jgħarbel l-applikanti.  Anke jekk ikunu persuni differenti fl-istess ditta.

Niftakru li anke l-Montenegro kellhom sistema simili ta’ ċittadinanza ekonomika li ġiet sospiża meta bdew id-diskussjonijiet għas-sħubija tal-Montenegro fl-Unjoni Ewropeja. Minkejja li waħda mill-kundizzjonijiet tal-iskema tal-Montenegro kienet li ċ-ċittadinanza ekonomika ma tingħatax li min imiss mal-kriminalita din xorta ingħatat lil Thaksin Shinawatra ex-Prim Ministru tat-Tajlandja li pajjiżu jridu jgħaddi proċeduri kriminali dwar korruzzjoni.

Dawn huma dawk li aħna f’Alternattiva Demokratika naraw bħala id-difetti tal-iskema proposta mill-Gvern. Pass żbaljat wieħed f’din l-iskema jista’ jħarbat ix-xogħol utli li sar fil-qasam tas-servizzi finanzjarji f’Malta tul is-snin. L-istess bħalma qed isir bil-paroli tal-Opposizzjoni li, meta tirritorna fil-Gvern tirtira ċ-ċittadinanza mogħtija taħt din l-iskema.  Id-dubju li hemm fuq il-validita’ kostituzzjonali ta’ dak li qed jgħid il-Kap tal-Opposizzjoni Simon Busuttil mhux ser ikun ta’ ġid għall-pajjiż.

Hemm ħafna sens komun nieqes f’dak li qed jgħidu kemm il-Gvern kif ukoll l-Opposizzjoni. L-atitudni tat-tnejn li huma qed tagħti messaġġ ħażin lil kull min qiegħed widnejh miftuħin biex jisma’.

The risk of being ill-prepared

Hurricane Sandy swept through the states of New York and New Jersey making it clear to all that the forces of nature, amplified and stronger as a result of climate change, will spare no one.

The impacts of climate change are here for all to see. The destructive power of nature is being made incrementally worse by a warming climate. In 2012, it was Hurricane Sandy that wreaked havoc on New York and New Jersey. In 2005, it was Hurricane Katrina that devastated New Orleans.

The havoc left behind in New York and New Jersey has been documented by the visual media. Less evident was the damage and misery in Haiti and neighbouring Caribbean countries.

Nature does not discriminate; it does not distinguish between rich and poor. Nor does it distinguish between developed and undeveloped countries. It sweeps away all that lies in its path.

Large areas of New York were without electricity. Over 40,000 New Yorkers were homeless as a result of Hurricane Sandy. This made the news.

However, disaster-stricken Haiti has been hit much harder. More than 200,000 Haitians already in makeshift homes as a result of the 2010 earthquake are now homeless.

A cholera outbreak in Haiti could be made worse by floods. Haiti, which is an agricultural economy, has also suffered a large loss of crops. This will lead to food shortages compounding the misery of an already impoverished nation.

Meteorologists have commented that more hurricanes are occurring late in the season, even after their “normal” season has ended. A 2008 study had pointed out that the Atlantic hurricane season seems to be starting earlier and lasting longer.

Normally, there are 11 named Atlantic storms. The past two years have seen 19 and 18 named storms. This year, with one month to go, there are already 19 named storms.

It is not only in the Atlantic that the climate is changing. Earlier this month, the Meteorological Office informed us that, in Malta, October 2012 was the sixth hottest month on record since 1922. With an increased frequency we too are witnessing more intense storms, which are playing havoc with an ill-prepared infrastructure.

The civil protection issues resulting from flooding will be hopefully addressed through storm-water relief projects substantially funded by the EU. While this will go a long way towards reducing damage to life and limb, it addresses the effects while leaving the causes of flooding largely unaddressed.

Malta’s climate change adaptation strategy, adopted some time ago, had pointed towards the issue of rainwater harvesting, which has not and still is not given due importance in new developments both those on a large scale as well as those on a much smaller scale.

The lack of application of rainwater harvesting measures through the construction of appropriately-sized water cisterns is an important contributor to the flooding of Malta’s roads and the overflowing public sewers whenever a storm comes our way. This occurs irrespective of the severity of the storm. Addressing this cause would go a long way towards reducing the volume of storm water that has to be contained to prevent it from causing damage.

By now it should be clear that there is no political will to address the issue as such a measure would entail taking action against developers (large and small) who did not provide rainwater harvesting facilities in their quest to increase profits (or reduce costs) in their land development projects. This has been the unfortunate practice for the past 50 years. Old habits die hard.

The expenses required to tackle a principal cause of the problem has been shifted from the developers onto the public purse, this including the EU funds being utilised. This expense has to make good for the accumulated (and accumulating) incompetence in rainwater management by focusing on the effects but simultaneously ignoring the causes.

Therefore, when one speaks on the devastating impacts of nature and climate change it should be realised that some of these impacts are being amplified as a result of the way in which successive governments have mismanaged this country’s resources.

The impacts of flooding are the ones which leave a lasting impression due to their detailed documentation by the media. There are, however, other impacts that are as important and in respect of which a public debate is conspicuously absent. I refer in particular to the impact of rising temperatures on agriculture and health.

Higher temperatures will slowly change our agriculture as the type of crops that can withstand higher temperatures are generally different from those which are currently prevalent. In addition, higher temperatures means that we will have some alien insects flying around, some of which are disease carriers.

Not discussing these issues does not mean that they will disappear. It only means that we are ill-prepared for the inevitable impacts and the necessary changes.

There is much to be done. So far, we have barely scratched the surface.

Published in The Times of Malta Saturday November 10, 2012