Issue link: https://maltatoday.uberflip.com/i/673696
maltatoday, SUNDAY, 1 MAY 2016 16 News 'Citizenship is inherently unjust' Scarcity is a fundamental economic problem. And freedom of movement, for some very rich people, is one such scarce right they are willing to pay over €1 million for. MATTHEW VELLA meets 'Passport King' Christian Kalin of Henley & Partners, the man who made it possible for the global rich to buy citizenship Christian Kalin's company devised Malta's Individual Investor Programme. "Citizenship is passed on by birthright, but what makes you a better person just because you had the luck to be born in Malta as opposed to somewhere else?" CHRISTIAN Kalin, the chairman of Henley & Partners, has sat down for his interview asking what the questions are go- ing to be like. It seems he is already taking stock and sizing up the scale of the challenge, but Kalin is a smooth operator and experienced negotiator, a man who has advised govern- ments and convinced them to put something precious for sale: people's birth-right, citizenship, and the trappings of visa-free travel for the world's best kind of passport. He is unperturbed at learning of this newspaper's reserva- tions or the political objections at what Henley does, be- cause the Swiss financial advisor who watches over a mul- ti-billion euro industry of passport sales knows that some governments find it hard to resist his pitch. In fact he is unwilling at first to quantify the scale of the industry's worth. Malta alone wants to sell 1,800 passports under its Individual Investor Programme, which go for €650,000 to initial applicants. That means Malta gets €65 million for every 100 passport applicants. Henley takes a 4% cut on every citizenship sold. "It's actually a phenomenon we've had since time imme- morial, going back to the ancient Romans... actually the Roman empire was the first to have a large scale citizen- ship programme, giving citizenship to deserving foreign individuals. Then you had the British Empire, built on im- ported wealthy merchants, a long tradition," Kalin says as he starts firing off the historical raison d'être for privileged citizens. It's a concept that has not changed of course, al- though Kalin says he doesn't like saying that governments are 'selling citizenship'. "Something is for sale if you offer it unconditionally for money, but if there are conditions – you need a good char- acter and investment in the country, then we can grant citizenship without the long residency requirements and other requirements – then it's not really a sale. It's not just a transaction. Of course it is nice politically if you are against that concept, to talk like that. And there are very good reasons to be against that [laughs] but there are also equally good reasons to be for it." While critics abound, Henley found support for its citi- zenship programmes with the governments of Antigua, Austria, Cyprus, Malta, St Kitts, and Grenada – generally small countries, some of them with long traditions of off- shore finance, starved of natural resources. "As opposed to in the past where you had countries like Great Britain offering citizenship, today those that offer citizenship directly without very long residency require- ments are exclusively small states. With the exception of Austria they are all island states. If you expand it to invest- ment migration generally, which includes countries which grant citizenship after some time of residency, you have large states as well: including Canada, the UK, Australia, New Zealand and most of South America." Since it came in, Malta's IIP was targeted for being a se- cretive programme for the global rich to gain an EU pass- port. The pressure from the Opposition took the debate right up to the European Parliament and the Labour gov- ernment introduced a residence requirement, a property and stocks acquisition requirement, taking the entire price of the golden passport to over €1 million in total. Kalin smiles because the answer to the Opposition's concerns on the sale of citizenship ended up being answered by the EU itself. "The EU was used by the political opposition here… which is totally understandable – if you're opposed to that you try to stop it using whatever influence you have. If there is one thing that is very clear in the EU, it is that citizenship is the absolute remit of the individual Member State. "The European Commission really has no say in this field. The outcome of that is an improved programme: not only is there no residence requirement, one can debate how effective and sensible this is, personally I don't think you need that but I can understand how sensitive it is." Kalin's confidence is also reflected in a comment he gave to the press in 2014 when he said that the Opposition was concerned that the cash that the IIP will bring in for the government, will enable Labour to stay in power. He reiter- ates that claim with conviction. "In small economies, you have a positive effect of these programmes. It is undeniable. You may be Nationalist or Labour, you may fundamentally, philosophically approve of the concept of giving citizenship to deserving foreigners or you may disapprove, but what is clear is that if you have a programme as is designed in Malta – because not all pro- grammes are equal – it's definitely benefiting Malta a lot." Of course Kalin's passport business presses certain moral buttons. He has turned citizenship – something that is jeal- ously regarded as a birthright or that is earned through long residence and community involvement – into a com- modity that only rich people can buy… "Yes I understand this very well. I can ask you a few ques- tions back. If you have a country in acute danger, and for- eigners can prevent that country from being invaded and its people killed, there's no question that if those foreigners free the country, defend it, no doubt that all the people of that country will agree to give them citizenship instantly. "So if you have someone who comes to the country, stays for many years here, pays some tax, is a nice citizen and does a few things and then he applies for citizenship, maybe he'll get citizenship. But what if someone comes and makes a contribution to the country that is a multiple of what the average citizen contributes to the economy in an entire life- time? Why not grant citizenship to such person?" Because it is based on a system of global injustice, privi- leging the rich with access to a public good they can buy. "Citizenship is inherently unjust," Kalin retorts. "The whole system is a completely unjust system and there are only two systems we have carried over from feudal times: the right to inheritance and citizenship. This is passed on by birthright, but what makes you a better person just be- cause you had the luck to be born in Malta as opposed to somewhere else?" But it is at this intersection that Kalin's business has found itself in the position it is in today, because citizen- ship is defined by a nation-state, and that also means bor- ders and restrictions on freedom of movement. Kalin sells unrestricted movement to those who need it and have the cash to pay for this luxury. Because he cashes in on the scarcity of freedom of movement. "Borders have guards so people are, as you see in Europe, being kept away… The rich and talented people have access and that is equally unjust. But at least, in an unjust system, there is a way that certain people can get access and at least benefit the countries that are hosting them," Kalin says, who believes that it is of benefit to host countries to let the rich set up base in their communities. "At least there is a small door within this very unjust sys- tem, where there is a certain element of 'equalization'… al- most everything, your life chances, is determined by where you're born and what citizenship you carry." But I tell Kalin that he exploits this injustice and encour- ages governments to exploit this. His answer seems to sug- gest that we're all prospectors for anything that can deliver us a satisfactory return: "Just as banks and journalists and oil companies, exploit systems and economy and the laws and the environment we have." Kalin claims that it was "a really unfortunate formulation" in Henley's contract with Malta that requires the Prime Minister and high-ranking government officials to speak at the firm's events "whenever requested" – something that is certainly not dignifying for a prime minister to act as a 'salesman' of citizenship as if he were doing the bidding of a private company. "It's not like we can go to the prime minister and tell him where to go. Usually this is combined with State visits and so on, so we obviously work around the Prime Minister's schedule. It's always portrayed like we can command the PM to do this... this is nonsense. It's very good if the Prime Minister himself represents the country. The people in the room are very substantial, international businesspeople who you want to have here, who you want to have more ties to Malta." Only this week Henley's ties with the St Lucia govern- ment were the focus of allegations from the opposition party there that the citizenship company had financed the ruling party's campaign. The St Lucia government denied the claims, and Kalin too laughs them off. Isn't Henley in a position to finance political campaigns, and did it convince Labour to choose the IIP with a donation for its election campaign? "Absolutely not. We don't give any donations to any par- ties. This is political nonsense made up by political people. When you deal with politicians who today are in govern- ment, tomorrow they are in opposition. We were dealing with the same Nationalists who are now in opposition. We were helping to reform their very badly-run residence pro- gramme. We helped to save what could be saved." Kalin says the PN in government showed "minimal" inter- est in the IIP. "This stuff, the political contributions, is complete non- sense which political people like to use, because we always deal with governments and therefore politicians," Kalin laughs. "Politicians in this country like to fight and unfor- tunately sometimes we are caught in the middle." WATCH THE INTERVIEW ON maltatoday.com.mt