ECCU CBI Programs: Regional Significance and Risks

Selected Issues Papers, May 30, 2025

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ECCU CBI Programs: Regional Significance and Risks

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Bibliographic details

• Authors: Janne A Hukka
• Published: May 30, 2025
• Series: Selected Issues Papers
• DOI: https://doi.org/10.5089/9798229012584.018

Summary

• The Citizenship-by-Investment Programs (CBI) have long been recognized in their importance to fiscal revenue in the ECCU, but there is less clarity over their broader economic contributions.
• Investor demand in this market can be highly unpredictable, especially as the programs have come under increased international scrutiny.
• The paper takes stock of recent CBI developments in the ECCU and estimates that total investments under these programs far outweigh those directly contributing to government revenue.
• The foregoing underscores the need for ongoing regional efforts to reduce the CBI programs’ risk susceptibility and to strengthen management of residual risks.

Key findings and observations

• Total investments under ECCU CBI programs far outweigh the portions that directly contribute to government revenue.
• Investor demand is highly unpredictable and sensitive to international scrutiny.
• There is limited clarity on the broader economic contributions of CBI beyond fiscal revenue.

Risks identified

• Fiscal risks from unpredictable CBI revenue flows.
• Program risk susceptibility driven by shifts in investor demand and international scrutiny.
• Insufficient transparency and limited ex-post assessment of CBI projects impeding informed regional best practices and assessments of systemic significance.

Policy recommendations and risk mitigation measures

• Clearer provisions for CBI revenues’ budget use to mitigate fiscal risks.
• Enhanced transparency standards for CBI programs.
• Ex-post assessments of CBI projects to:
  • Inform regional best practices.
  • Support assessments of the programs’ systemic significance.
  • Aid development of contingency plans.

Subject and keywords (as listed)

• Subject: Balance of payments, Contingency planning, Economic integration, Economic sectors, Financial crises, Foreign direct investment, Foreign exchange, Monetary unions, Tourism
• Keywords: Caribbean, CBI investment option, CBI programs' risk susceptibility, CBI reform initiative, Citizenship-by-Investment, Contingency planning, ECCU, Foreign Direct Investment, government CBI revenue, Monetary unions, Non-tax Government Revenue, post assessments of CBI, Tourism

Publication metadata (as listed)

• By Janne A Hukka
• May 30, 2025
• Pages: 10
• Volume: 2025
• Issue: 067
• Series: Selected Issues Paper No. 2025/067
• DOI: https://doi.org/10.5089/9798229012584.018
• ISBN: 9798229012584
• ISSN: 2958-7875

Source: ECCU CBI Programs: Regional Significance and Risks — Selected Issues Papers (IMF), Janne A Hukka, May 30, 2025.

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