PM Drew: Economic diversification, reducing reliance on CBI is “the only way”

St. Kitts and Nevis’ Prime Minister, Dr. Terrance Drew, says his administration will not lead the country down the slippery fiscal slope that can be created by over reliance on the Citizenship by Investment Programme (CBI). 

He identified this overreliance on the CBI as one of the major flaws of the previous administration that was led by Dr. Timothy Harris.

Disclosing the findings of an internal review of the CBI in the National Assembly on 26th March, 2024, Prime Minister Drew said his government has placed great priority on diversifying the national economy and lessening its reliance on revenue generated by the 40 year old initiative. 

Economic diversification forms a key part of the St. Kitts Nevis Labour Party administration’s seven pillar “Sustainable Island State Agenda”. The others, which were announced by Prime Minister Drew during 2023’s COP28 are food security, green energy transition, sustainable industries, the creative economy, COVID-19 recovery, and social protection.

To achieve the goal of economic diversification, the government intends to place greater focus on several areas including offshore education, tourism, agriculture, creative economy, construction, water and energy infrastructure and manufacturing.

“The Federal Government was overly reliant, Madam Speaker, and I have spoken to this on multiple occasions, that a significant detrimental fiscal policy was introduced where we became overly dependent, Madam Speaker, on the CBI Programme. 

“Between 2008 and 2022, CBI generated 43 percent of the overall cash revenue of the Federal Government, Madam Speaker, which means that this programme had become the fundamental pillar underpinning our financial architecture. Madam Speaker, between that time, we were able to raise EC$5.678 billion in revenue at an average of roughly EC$378 million per year. 

“In the last five years of the previous Administration, CBI generated 50 percent of the overall cash revenue for the Federal Government. In the last two years of the previous administration, CBI generated 57 percent of the overall cash revenue of the Federal Government. 

“This is the truest economic example of putting all of one’s eggs in one basket, Madam Speaker. 

“In 2022, CBI revenues reached an unsustainable level of 60 percent of total Federal Government revenue. This unsustainable status quo cannot continue, and our administration has been focused on diversifying our economy, Madam Speaker. It is the only way,” said Prime Minister Drew.

The St. Kitts and Nevis’ CBI is the first and oldest in the world having been established in 1984, just one year after the nation attained independence.

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