#14 movement
Manuela Boatcă

Exclusion Through Citizenship

For a long time, citizenship has been viewed as a mechanism meant to counterbalance social inequalities. Sociologists analysed the institutionalisation of citizenship as part of a sequence of social change characterising modern, democratic societies, in which particularities of birth such as ethnicity, status, or gender no longer stand in the way of an individual’s social mobility, since all citizens are equal before the law. More recently, scholars have turned to the question of how citizenship plays a role in the maintenance and reproduction of global inequalities.

The results could not be more different than the ones derived at the nation-state level. Thus, according to legal scholar Ayelet Shachar, citizenship – a characteristic ascribed to most individuals at birth under either jus soli (right of the soil) or jus sanguinis (right of blood) arrangements – functions as a kind of inherited property that restricts membership in well-off polities to a small part of the world population. For Shachar, both inherited property and birthright citizenship grant legitimate title bearers the unconditional right of entry on the one hand and restrict access to scarce resources (e.g. land in the case of property, a welfare system in the case of citizenship) on the other. More importantly, however, both inherited property and birthright citizenship are automatically transferred from one generation to the next according to ascriptive principles.

Citizenship and gender, the most decisive factors accounting for these extreme inequalities between individuals in poor and rich countries in the twenty-first century, are both statuses ascribed at birth.

In Shachar’s gripping comparison, for a girl born in 2001 in Mali, one of the poorest countries in the world, the chances of surviving to age five, having access to clean water, or getting an education were incomparably lower than for a baby born at the same time in the United States, where chances for boys and girls on all these counts are nearly identically high. Contrary to an entire Western tradition of citizenship theory from Max Weber through T.H. Marshall to Bryan Turner, citizenship and gender, the most decisive factors accounting for these extreme inequalities between individuals in poor and rich countries in the twenty-first century, are both statuses ascribed at birth.

Shachar’s notion of citizenship as inherited property runs counter to the view that citizenship represents a counterbalance to inequalities of property. It however does not relinquish the underlying occidentalist assumption that citizenship – as developed in the West through the legal (and physical) exclusion of non-European, non-White and/or non-Western populations from civic, political, social and cultural rights – is a modern, progressive institution. The increasing commodification of citizenship rights across the world in recent years makes the similarity between birthright citizenship and inherited property particularly salient. Resorting to market mechanisms in order to elude the ascription of citizenship is an increasingly visible, yet rare option available only to the wealthy few.

Conferring citizenship to investors who reside on a country’s territory has been common practice in a number of states, including the UK, the US, Canada, Belgium, and Australia. The by far less common, but recently growing practice consists of extending citizenship status to investors without them even having to set foot in the country. Firmly implemented in St. Kitts and Nevis and the Commonwealth of Dominica since 1984 and 1993, respectively, and recently set up in Antigua and Barbuda as well as Hungary in 2013, the so-called citizenship by investment (or “economic citizenship”) programs have recently proliferated in Southern and Eastern Europe.

“For decades, the two-island nation of St. Kitts and Nevis exported sugarcane to keep its economy afloat. When sugar prices fell, St. Kitts began to sell an even sweeter commodity: its citizenship”.

Citizenship by investment programs have a clearly economic rationale. They are frequently used as an alternative development strategy in close connection to a colonial past and/or core-periphery relations in the present. For their first promoters, the programs were meant to bridge the transition from the export monoculture of the colonial economy to more diversified production after independence: St. Kitts and Nevis, a federation of two islands in the Caribbean, established its program one year after the islands gained independence from the United Kingdom in 1983. Initially, investment required to obtain citizenship was limited to a real estate option of 400,000 USD. After the islands’ sugar industry was closed under pressures from the European Union and the World Trade Organisation, a second option was introduced in the form of a donation to the Sugar Industry Diversification Foundation (SIDF), a charity aimed at conducting research into the development of alternative industries to replace the sugar industry. Under the headline “Passports… for a Price”, Reuters pithily summarised the logic behind the move towards investment citizenship by noting: “For decades, the two-island nation of St. Kitts and Nevis exported sugarcane to keep its economy afloat. When sugar prices fell, St. Kitts began to sell an even sweeter commodity: its citizenship”. Similarly, the Commonwealth of Dominica, which gained independence from the United Kingdom in 1978, has established an investor citizenship program after adverse weather conditions and the decrease in the world prices of bananas, the country’s primary crop, had seriously damaged its economy. Citizens of St. Kitts and Nevis can travel without a visa to more than half of the world’s countries, including Canada and all of Europe. They pay no personal income taxes and can take up residence in any of the Caricom member countries at any time and indefinitely.

While Hungary boasts the lowest amount required of investors in Europe, a real estate investment of up to 650,000 EUR also buys foreigners residency rights and in some cases full European citizenship in Ireland, Spain, Portugal, Greece, Cyprus, Macedonia, Bulgaria, and Malta.

Within Southern and Eastern Europe, citizenship and residency programs have taken hold especially as a result of the 2008 financial crisis. Hungary, looking to refinance billions of dollars in foreign debt that will mature in the next few years, adopted an amendment to the immigration law introducing an investment citizenship option in December 2012. Foreigners who buy at least 250,000 EUR in special government residency bonds with a five-year maturity date are offered preferential immigration treatment and a fast track to Hungarian citizenship with no residence requirement or real estate purchase. While Hungary boasts the lowest amount required of investors in Europe, a real estate investment of up to 650,000 EUR also buys foreigners residency rights and in some cases full European citizenship in Ireland, Spain, Portugal, Greece, Cyprus, Macedonia, Bulgaria, and Malta, whose investment programs have all been implemented since 2012. Visa-free travel to core countries, citizenship of a Schengen zone state, or even the right to work in the European Union thereby become available for the (moderately or very) wealthy, consequently linking the inequality of income and property to the access to property commodified in the form of citizenship. Authors like Joachim Stern and Jelena Dzankic have therefore introduced the term “jus pecuniae” (right of money/right of wealth) as a new type of criterion for the allotment of citizenship alongside jus soli and jus sanguinis. However, the commodification of citizenship that jus pecuniae involves neither follows an alternative, non-ascriptive logic – since investors already possess an ascribed citizenship, and the newly acquired one can be passed on to future generations by descent – nor does it represent a viable option for most of the world’s population. Instead, it is either an option purposely designed for a very select few or – more frequently – is scandalised, stigmatised and, ultimately, criminalised when it threatens to become available to a wider number of people.

In most cases, the declared goal of economic citizenship programs is to attract wealthy investors, especially from China, but also, and increasingly, from Russia and the Middle East. While both the Hungarian and the Greek governments actively promoted the launch of their investment citizenship programs in China, Cyprus initially cut down the amount required for investment citizenship in order to compensate for the losses of the Russian business community in the recent Cypriot bank crisis. At the same time, sharp criticism of economic citizenship programs as “an abuse of European Union membership” in the case of Hungary and as “cheapening citizenship” in the case of Malta has been instrumental in reasserting EU core countries’ leverage on semi-peripheral ones. This becomes all the more clear in view of the austerity measures and other sanctions imposed on Cyprus, Montenegro and Malta.

At stake in such debates, however, is not the abstract worth of citizenship, nor the amount of cultural and social ties of members with the national community, but the consequences of the commodification of citizenship for migration to and the rights of potential migrants in core regions of the world-economy.

Thus, in the context of the debate on EU economic aid to Cyprus, the head of the German Christian Social Union (CSU) in the EU Parliament asked for a reform of Cyprus’s citizenship law in order to ensure that not everyone who has a lot of money receives a Cypriot passport. It was also the German CSU that criticised the decision of Montenegro’s government to implement a citizenship by investment program in the country. The CSU announced that it might request the reinstatement of visas for the citizens of Montenegro, implying that this decision might affect the previous “progress” the country had made in the area of border management and immigration control. In the wake of such reactions, the Montenegrin government has put the implementation of its citizenship by investment program on hold. In turn, Malta’s brand-new citizenship scheme, with an initial investment threshold of 650,000 EUR, has been heavily disputed on a number of counts, including the European Commission’s concerns that it would naturalise persons born and residing abroad without “genuine links to the country”. As a result, the Maltese government has amended the scheme to include a more severe residence requirement and further investment in real estate and government bonds, raising the contribution to a total of €1,150,000. Despite many of the arguments exchanged by critics and promoters alike, at stake in such debates, however, is not the abstract worth of citizenship, nor the amount of cultural and social ties of members with the national community, but the consequences of the commodification of citizenship for migration to and the rights of potential migrants in core regions of the world-economy.

States whose citizenship include the advantage of the above-mentioned visa-free travel to core countries or even the right to legal employment in them, offer what could be referred to as “premium citizenship” that is attractive to investors.

It is therefore important to note that, while any state’s citizenship could theoretically be commodified by becoming the object of investor programs, it is only the citizenship of few states that lends itself to being commodified by virtue of being a scarce good awarding (relatively) rare benefits. From this point of view, states whose citizenship include the advantage of the above-mentioned visa-free travel to core countries or even the right to legal employment in them, offer what could be referred to as “premium citizenship” that is attractive to investors. States that are not part of the core, may, as in the case of St. Kitts and Nevis, use the residual benefits of having been a British colony and that today entails being a member of the Commonwealth of Nations – which share, among other things, a visa-free travel area. This, however, hardly compares to the rights accruing from EU citizenship, which include free movement, residence and non-discrimination within the EU, the right to vote for and stand as a candidate in European Parliament and municipal elections, diplomatic protection outside the EU, et cetera.

Citizenship for sale is not only unavailable to the majority of the world’s population, but would not prove a viable economic strategy in any but “premium citizenship” states, among which European Union member states rank highest. Thus, according to Henley & Partners, a private British consultancy that has coined the term “citizenship and residence planning”, the European Union is home to nine out of the ten countries worldwide whose citizens enjoy the most freedom of visa-free travel. The Henley & Partners Visa Restriction Index, produced in cooperation with the trade association for the world’s airlines, IATA, ranks Finland, Sweden and the United Kingdom number one on account of a total score of 173 countries to which their citizens can travel visa-free (out of a maximum score of 218). Denmark, Germany, Luxembourg, and the United States share second place with visa-free access to 172 countries, followed by Belgium, Italy and the Netherlands at 171. Most passport holders in Africa, the Middle East, and South Asia have scores below 40, while mainland China has a barely slightly higher score of 44 – equal to that of Cameroon, Congo, Jordan, and Rwanda. This explains why EU residence permits are extremely attractive to Chinese investors, and much more so than for Hong Kong investors, who have access to 152 countries on account of holding a “Special Administrative Region of China” passport.

“For good reasons, many international business people and important persons who are active worldwide consider an alternative passport as the best life insurance money can buy.”

Henley & Partners – which has set up St. Kitts and Nevis’ as well as Antigua & Barbuda’s investment citizenship scheme and is now administering Malta’s – hosts an annual Global Residence and Citizenship conference advertising the latest options available to wealthy investors in search for dual or “alternative” citizenships. Among the benefits, it stresses that alternative citizenship is “an effective tool for international tax planning” – if one’s state of origin imposes stricter tax rules – as well as for “more privacy in banking and investment”. The highest worth, however, is attached to the “insurance feature” of citizenship: “a passport from a small, peaceful country can even save your life when travelling and in times of political unrest, civil war, terrorism or other delicate situations. For good reasons, many international business people and important persons who are active worldwide consider an alternative passport as the best life insurance money can buy”.

The globally mobile ultra-rich seldom count or self-designate as migrants, but are instead called “global investors”, “expats”, or “foreign residents for tax purposes”.

As investment citizenship and residence programs open, like Roxana Bărbulescu puts it, „global mobility corridors for the ultra-rich“, thus undermining the mechanism of closure through citizenship “from above”, strategies that provide low-income migrants with far more limited paths to mobility are singled out as illegitimate and criminalised. This double standard runs through the global logic of exclusion through citizenship. The racial criminalisation of migrants to core regions – most prominently, the European Union and the United States – only targets the so-called “poverty migration”. The globally mobile ultra-rich seldom count or self-designate as migrants, but are instead called “global investors”, “expats”, or “foreign residents for tax purposes”, while their migration process is more often referred to as “relocation” or qualified as “business migration”. Yet, as visa requirements for the majority of the world’s migrants become more restricted, investor citizenships and visas proliferate.

Citizenship is thus not only a core mechanism for the maintenance of global inequalities, but also one on the basis of which their reproduction in the postcolonial present is being enacted. Accordingly, the transmission of citizenship at birth is no striking exception to a trend away from ascribed particularities and their replacement through achieved characteristics, but a core mechanism of global stratification in a world capitalist system targeting profit.

Photo: ©iStock.com/Alexander Gatsenko

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