BASSETERRE, ST. KITTS, SEPTEMBER 4TH 2013 (CUOPM) – St. Kitts and Nevis’ Prime Minister the Right Hon. Dr. Denzil L. Douglas used the opportunity of his appearance on Radio St. Kitts-Nevis to again provide information on the Sugar Industry Diversification Programme (SIDF).
Asked by host Carla (Carla T) Astaphan during her daily programme “What’s Happening St. Kitts and Nevis,” Prime Minister Douglas denied that the Sugar Industry Diversification Foundation (SIDF) is a slush fund.
He said the SIDF was established to help the government, help the people, help the country as it is being employed today to assist in this difficult period of transition, “which we knew had to be experienced in making the change from the old economy to the new economy.”
The Prime Minister also spoke to the misconception and misleading statements that fees from the Citizenship By Investment Programme (both Real Estate and SIDF options) are not paid into the Consolidated Fund.
Dr. Douglas called on educated people to take the time firstly to listen and then to read.
“That is what disturbs me, because it is not everything that must be put into the crucible of party politics. People are sensible here in this country. People are educated and you give people the facts and let them make up their minds,” said Dr. Douglas.
“The SIDF was conceptualised with the assistance of one of your own countrymen, the former Prime Minister of Dominica, Hon. Edison James, who referred to us a company called Henley and Partners. This company apparently had been negotiating with him in Dominica and when he lost the elections, Henley and Partners was referred to us here in St. Kitts and Nevis. They came and presented the proposal to me as the Prime Minister,” Dr. Douglas recalled.
The St. Kitts and Nevis leader said the presentation caught his government’s attention because it was providing an alternative option to the real estate option that already existed in the Citizenship by Investment Programme.
He said that on taking office in July 1995, the programme was revamped into a credible investment programme.
“Rather than the sale of passports – because that label had been given to other countries at one stage – and as a result of that, Canada imposed visa restrictions,” said Dr. Douglas.
The Prime Minister noted that in looking at the sustainability of the programme, “we thought of an alternative and the SIDF became the alternative.”
“Not only would you invest in real estate, but you would make a contribution to this Foundation and you would be invited to become a citizen if you pass the necessary litmus test, which is due diligence checks on your background for criminality, security breaches, etc. and then you would be granted Citizenship after you would have made the investment,” Dr. Douglas explained.
He said that the Federal Government had already made that policy decision to close the sugar industry in 2005 and the Sugar Industry Diversification Foundation (SIDF) was founded in 2006 by National Bank Trust.
“It would assist in the research and support of industries alternative to the sugar industry. It will help to create competiveness in the transformation of the old sugar agriculture-based economy to a new economy that would be dependent upon and driven by services. But the concept of creating a fund really came through Henley and Partners. That is why when people will ask why Henley and Partners had to be involved and why were they being given a commission, the answer is, they had some intellectual property rights to it because they provided the concept; we tweaked it and we developed it,” said Dr. Douglas to listeners.
“Shaun a Brisbane, and Ambassador Wendell Lawrence had travelled to Geneva with myself to look at Henley and Partners Headquarters; we looked at how they were operating and met some of their private bank managers of net worth clients and we were satisfied that this was a credible company to work with. Eventually we launched the SIDF. The SIDF from the conceptualization stage was to assist in the transformation of the economy,” said Prime Minister Douglas.
He pointed out that the SIDF has nothing to do with the compensation of sugar workers.
“The SIDF as I said is a private foundation founded by the National Bank Trust to help with the transformation of the national economy. The sugar workers were being paid their redundancies from monies that were being borrowed by the government through the St. Kitts-Nevis-Anguilla National Bank in order to assist the transitioning and the closure of the Sugar Industry. Workers’ pay packages were worked out and the total amount was used in the management of the transition through a Transition Office and for retraining of sugar workers. A lot of them were placed into community centres where they were given opportunities to acquire new skills and all paid for by money borrowed from the National Bank,” Dr. Douglas further explained.
“It (closure and compensating) had nothing to do with the SIDF,” said the Prime Minister, who again reiterated that the SIDF really came into being in 2006 after the sugar industry was closed and all the workers compensated.
“It (SIDF) had nothing to do with the compensation of workers at the time of closure of the industry. We wanted to make sure that with the loss of the main driver in the economy, we would want to have something of a security fund that can help the government, help the people, help the country just as it is being employed today to assist in this difficult period of transition, which we knew had to be experienced in making the change from the old economy to the new economy,” said Dr. Douglas.
He said that another misconception is that fees are not being paid into the Consolidated Fund.
“I must clear that up here. A lot of people are thinking that when you would have paid your fees to the Citizenship by Investment Unit, whether it was going to the real estate option or the SIDF option, that those monies are being deposited in the SIDF Accounts, It is nonsense! So you want to invest in real estate. The real estate developer is the person you pay that money to, that is the US$450,000. It goes to that developer. The government doesn’t touch it, but there are fees associated in the processing of the application and those fees go into the Consolidated Fund. These are government fees. We can’t go and touch the real estate capital that is being used by the developer that is his private money.
Likewise, the option with the SIDF, it goes into a private Foundation. The US$250,000 or whatever is being paid. It goes into the private Foundation that is the SIDF. But there are fees associated with the processing of those applications and those fees come to the government by way of the Consolidated Fund,” said Prime Minister Douglas.
“Now there are extra fees. When you now have become a citizen and you choose to have a passport – a travel document – because, it is not everybody who becomes a citizen automatically wants to have a passport. Some don’t, but those who wish to have a passport and therefore will now apply to the passport office for a passport, they have to pay the normal fees like you and I and those fees go into the Consolidated Fund. They don’t go into the SIDF, neither does the private investor or developer gets those fees,” said the Prime Minister, who further added:
“Those fees are government fees, properly accounted for in the Consolidated Fund by the government’s Accountant General. And those who continue to say that in the SIDF there is no accountability, they must know that Price-Waterhouse-Coopers has been the auditing firm,” said the Prime Minister, who invited listeners to go online at www.sidf.org and scrutinise for themselves the audited accounts related to the financing of a large range of activities and services of the SIDF as its contributes to the national development of the country in both islands of St. Kitts and Nevis.