Since the Prime Minister and Minister of Finance, Pravind Jugnauth, announced in his 2018/2019 budget the sale of Mauritian passport and Mauritian citizenship to foreigners, an outcry has come from all corners, be it the layman on the street, the trade unions, the opposition, and even a number of the so-called elites from the private sector. Mauritius needs to open up to foreigners because we have seen how in other successful countries (especially those who do not have natural resources), there is a positive correlation in the opening of the economy and economic growth and GDP per capita. The issue here is the misinformation and misperception of the Mauritian public at large vis-à-vis foreigners living full-time on our island.
Communication strategy non-existent
Let me state a fact: our population is reaching its peak and by 2030 will start its downward trend. What does it mean for a Mauritian company manufacturing and selling to the local market. This downward trend will mean a reduction in consumption of the company’s products and eventually turnover and bottom line. Simple as that. In a previous article which was published in Newsweek magazine, a couple of months ago, I said that we should come up with a reasonable target in terms of foreigners settling in Mauritius.
Take for example Singapore or Dubai which have millions of foreigners residing pretty much fulltime. Mauritius could target a maximum of 100,000. This will not be overnight, and it could be realised by 2030 (hence around 10,000 per year) which would give the authorities enough time to plan and upgrade our infrastructure to accommodate this increase in residents. It might seem frightening for Mauritians, but it should not. Most of those Mauritians are crying foul play.
That Mauritius will be sold to foreigners and that the locals will not be able to buy property or land in the future is completely false and naive. Assuming we target an average family of 4, this 100,000 would be around 25,000 households, and if we assume 1,000 square metres of land per family, this would be a total of 2,500 hectares, that is less than 1.3% of the land mass of Mauritius. Currently there are far more smart cities on planning stage, that are not able to take off, and that will not be able to take off for years if not decades, unless we allow foreigners to settle in Mauritius. Hence the 2,500 hectares, which are less than 25% of the land bank of Médine alone, will not impact the availability of land for Mauritians. There is plenty of land, and Mauritians should stop being alarmist and rather debate with facts.
Here the authorities have to put together a plan to inform the public that the whole island is and will remain under the ownership of Mauritians.
Coming back to the issue of passports and citizenship, the authorities have not thought about this in depth, and their communication strategy is pretty non-existent. The intent might be good, but it is a matter of thinking and planning all the scenarios and preparing the population. Mauritians have a passion to speculate and debate across purposes, they completely deviate from the ultimate objective, and they dilly dally for years. Take the Metro Express: it has taken us more than 25 years of debating (most of the times futilely) to finally execute the implementation of such an important infrastructure upgrade for the island. Hence the reason as to why government should be totally transparent about the sale of passport/citizenship.
Following the budget announcement, Ken Arian, a senior advisor of the Prime Minister, mentioned to a daily newspaper that there would be a quota of 1,000 passports to be issued with a target of 100 per year. That number should be communicated properly to the public as the latter currently believe that it is a complete open door to foreigners.
Government should showcase those foreigners who have moved to Mauritius and who are contributing positively to the island, likes Paul Jones (CEO of Lux Resorts), Sanjiv Bhasin (CEO of Afrasia Bank), Sudhamo Lal (Director General of the Mauritius Revenue Authority), Robert Hovenier (CEO of MITCO). Show to the public that foreigners are not all bad. They love our country, may be sometimes more than Mauritians themselves and are adding value to the economic growth of the island.
Clarity badly needed
Instead of speculating and debating with the wrong information, we need clarity from the government. Herewith a list questions:
1) Out of the quota of 1,000, what is the target for number of passports versus citizenship? Is it 50/50, 25/75, 75/25, or there is no split target? Is it on a first come first serve basis?
2) Why 1,000? Why not 2,000 or 10,000? How did they arrive at that number? What study did they do to seek that 1,000 is the efficient quota target?
3) Who will be on the committee that will vet the probity of these foreigners? What tools will they have? How will they ensure total objectivity?
4) Will there be a preference of specific foreigners coming from specific source market(s)? Will a French national be preferred to a south African national or an Indian rather than a Chinese?
5) What about couples who are married overseas and are of the same sex? Would they be allowed to apply? Especially given the recent debacle of some people over the LGBT community in Mauritius.
6) What about race? If there was a choice to be made for the last 1,000th person, will someone from one specific race be given priority over any other race or vice versa? How do we ensure equality? True equality?
7) What happens if after issuance of passport and citizenship, the said person commits a crime thereafter? Will he or she be stripped off the Mauritian passport and citizenship? Would the payment made by the person prior to obtaining the passport or citizenship be refundable or nonrefundable?
8) If the payment is non-refundable, how would the authorities provide comfort to the foreigner that he or she will not become, post-payment and issuance of passport and citizenship, a person non-grata if he or she is not in the good books of the regime of the day or is a supporter of the opposition?
9) What about those who might have court cases overseas but not proven guilty yet? Will they be allowed to apply? Or will they have to wait for their court cases to be over?
10) How did the authorities come up with the number of USD 500,000 for passports and USD 1 million for citizenship. Given that under the previous IRS scheme and currently PDS scheme, a foreigner who buys USD 500,000 property in a designated scheme is entitled to permanent residency. Could it have been wiser to put the passport at USD 750,000 so that foreigners would have three schemes, permanent residency at USD 500,000, passport at USD 750,000 and citizenship at USD 1 million. Will the current price tag of USD 500,000 for passports not kill the IRS and PDS permanent residency schemes?
11) Did the authorities work out a competitive analysis of other nations that are offering passport schemes as well, and did they devise a niche strategy? It is a matter of thinking and planning all the scenarios and preparing the population.
While I am a proponent of opening up the economy further and of allowing foreigners to be part of ‘us’, I hope that the government has thought through all the above questions. The sooner we get clarity, the sooner the population at large can stop speculating. We need alignment between government (irrespective of which is the regime in power) and the population, if we really aim to get Mauritius out of this on-going middle-income trap to high income economy. The more so as the current government’s objective to achieve high income economy status has already been postponed to 2023.
By Kevin Teeroovengadum,
The author is an African specialist investor with 18 years of experience in Africa, sits on various company boards in Mauritius.