Selling Citizenship

Aux armes, citoyens! So begins the refrain of ‘La Marseillaise’, adopted as the French national anthem by the Revolutionary Convention of 1795. No longer serfs, nor subjects, nor vassals, but equals. Citizen: a political category that had vanished with the ancient world (cives romanus sum) re-emerged to encapsulate the rights won by the Revolution and bind together the imagined community of the nation-state. The rights of citizenship would be augmented over time (the right to education, right to health, right to work…) along with their corresponding duties (conscription, jury duty, tax impositions…). Herein lies a key distinction with contemporary human rights: the aim to give positive content to an equality that is otherwise formal and theoretical, as expressed in the principle of ‘one person, one vote’.

This conception of citizenship – and thus of the state – peaked in the 1960s, and then began to decline. It continues to be considered a form of belonging, one that can be conferred by birth (ius soli), by bloodline (ius sanguinis) or by an extended period of residence. Yet citizenship has ‘thinned’, as the expression goes. Rights were diminished (the demise of the welfare state) and duties shrank (easing the tax burden), when they were not abolished entirely (conscription). With the triumph of neoliberalism it was transformed into a commodity, that is, into something that can be bought and sold. There is now, as the American sociologist Kristin Surak writes in The Golden Passport, a ‘citizenship industry’ spanning the globe. The book contains a treasure trove of information, data, and first-hand accounts of the history of this industry’s first forty years.

Why would one need to buy citizenship? One covets another nationality because not all citizenships are equal. Our lives depend on a ‘birthright lottery’. As Surak reminds us, if you are born in Burundi you can hope to live an average of 57 years with $300 a year at your disposal; if you are born in Finland the figures are 80 years and $42,000. The great migrations we see today depend on this boundless geopolitical inequality. Borders (which I wrote about recently for Sidecar) serve to maintain this chasm: Turkey receives €6 billion a year from Brussels to keep Syrian, Afghan and other refugees from entering the EU; as of this year, Tunisia is receiving €1.1 billion euros to stem sub-Saharan migration. The tiny republic of Nauru (a 21-square-kilometre island with a population of 12,600) has earned half its gross domestic product over the past decade processing asylum seekers rejected by Australia.

Yet though citizenship is fiercely unequal, we are still routinely presented with the legal fiction that all states are equally sovereign – a notion stretching back to Emer de Vattel’s Le droit des gens (1758), which argues that if in the state of nature men are equal to each other, despite all their differences, then the same must apply to states. Of course, states are by no means equally sovereign. Nauru does not have sovereignty equal to a country like Germany, in spite of the fact that its vote has the same weighting at the UN, it can open embassies around the world, offer immunity to its diplomats and so on. It is in this respect that Surak quotes Stephen Krasner, from his book Sovereignty (1999): ‘What we find most often, when it comes to sovereignty, is organized hypocrisy’. The recasting of citizenship as a commodity is a result of this contradiction between formal equality and real inequality. As Thomas Humphrey Marshall put it in 1950, ‘Citizenship provides the foundation of equality on which the structure of inequality can be built’.

Many naturally want to escape from this inequality; in the vast majority of cases this occurs through migration. But for the few who can afford it, there is an elevator rather than a ladder up the ranks of citizenship. Citizenship is typically bought by the privileged classes from underprivileged states – those on the peripheries of global trade, subject to imperial sanctions, marked by political unrest, war or authoritarianism. The citizenship market arises, Surak explains, ‘from the confluence of interstate and intrastate inequalities’. The price of citizenship for oneself and one’s family ranges from a few hundred thousand dollars to a few million. Buyers tend to be multimillionaires, but they could be Palestinians seeking legal status, Iranian businessmen hit by sanctions, Chinese elites trying to protect themselves from expropriation by the party-state, or Russian oligarchs seeking refuge from Putin’s volatile rule and, now, the dangers of war. For a time, the biggest customers were Hong Kong residents nervous about Beijing’s encroachment. But they may also be high-level managers and executives – Indians, Pakistanis, Indonesians – working in the Gulf states, who are not legally entitled to stay there when they retire and do not wish to return to their home countries.

Precisely because the citizenship of some states is an exorbitant privilege, its existing holders are keen to protect it by erecting insurmountable barriers. So even for the extraordinarily wealthy, it is not easy to buy citizenship of states at the top of the geopolitical pyramid (although, there are exceptions: France naturalized Snapchat billionaire Evan Spiegel, New Zealand did the same with billionaire Paypal founder Peter Thiel). Another route is to buy a lower ranking citizenship that allows you to enter and reside in the top states – the hierarchy of states corresponds to a hierarchy of international mobility. Those with EU or Japanese passports can freely enter 191 countries; US passports 180; Turkish 110. In essence, Surak writes, while immigrants must live in the state they hope to join, for those buying citizenship only their money need reside there.

The first to capitalize on the citizenship trade were the Caricom nations: the fifteen Caribbean microstates with a combined population of 18.5 million. St. Kitts & Nevis broke precedent by enacting a 1984 law that granted citizenship to those who invested a certain amount. This became known as ‘Citizenship by Investment’ (CBI). For centuries the islands had thrived on sugar – producing 20% of global output in the eighteenth century – but by the 1970s had entered an economic crisis, exacerbated by the growth of the cruise industry. The CBI programme ended up generating 35% of GDP. They had the advantage of being part of the British Commonwealth, where common law applies, that is, where the law is based on previous judicial rulings: common law defines only what is prohibited, while civil law defines what is lawful and is therefore much more restrictive. Not surprisingly, Caribbean Commonwealth states such as Antigua, Grenada and St. Lucia followed their example. Next came Dominica, whose economy had been entirely based on bananas, which it exported primarily to Europe until in the 1990s WTO regulations allowed Chiquita to mount a successful legal challenge. As the ensuing ‘banana war’ brought the island to the brink, the CBI programme became its main asset; in order to match the benefits of its Commonwealth neighbours it offered citizenship at lower rates and other benefits (such as making it easier to change names). Since 2009, the passports of St. Kitts and Antigua have given their holders free access to the Schengen Area; since 2015, Dominica, Grenada and St. Lucia have offered the same perk.

The desirability of a passport depends on the mobility it provides. In this sense, citizenship is different from residency. There are about fifty countries (Portugal, Spain, Australia and the US among them) that in exchange for investment offer residency but not citizenship. Mobility, though, depends not so much on the state that naturalizes you as the one that lets you in (in 2015, for example, St. Kitts lost free entry to Canada and its passport became devalued). That’s why as the citizenship industry has steadily moved out of its cottage phase, developing more rules and procedures, the big states have gained increasing influence over the granting of citizenship. To acquire citizenship of the Caribbean microstates now requires the United States (and, increasingly, the EU as well) to give their approval.

In the Mediterranean, the main sellers of citizenship have been Malta and Cyprus, for reasons related to their history. In Malta’s case, this is because of the English language, its location, and its membership of the European Union. The terms of its CBI programme were hotly contested by both the Maltese opposition parties and the European Parliament, which imposed a cap of 1,800 naturalizations; it was closed in 2020 but has since reopened with a cap of 400 naturalizations per year and 1,500 in total (at the modest price of a €700,000 investment, plus €50,000 per family member or employee). Cyprus also has the advantage of being in the EU, but it was additionally part of the nonaligned nations during the Cold War and had a strong Communist party. When the USSR collapsed, it still had a large population of Russian-speaking professionals, many in law and finance, with strong connections to Moscow. Before long it became a favourite destination for Russians because of its proximity, its sunshine, and its access to Europe. Its capital city was unofficially renamed ‘Limassolgrad,’ or ‘Sunny Moscow’, ‘with Russian schools, Russian stores, Russian clubs, Russian restaurants, Russian newspapers’, Surak informs us. With the 2013 Greek crisis however, the Troika imposed major levies (reaching up to 100%) on all uninsured bank deposits over €100,000, and several years later, Cyprus’s CBI programme was shut down, just as the pandemic increased demand for passports from those who wanted to escape draconian lockdowns imposed in China and elsewhere. Russians had to look for a new refuge.

They found it in Turkey, an unusual candidate among the sellers of citizenship. With a population of 80 million and a powerful military, it is one of the 20 strongest economies in the world. Yet today it welcomes more than half of the world’s citizenship buyers. It may not be an EU member, but it has other advantages. Unlike the Caribbean microstates or Vanuatu, or even Malta, Istanbul is a metropolis that is perfectly liveable for an affluent expat. At first, most applications came from Iraq, Afghanistan, Palestine and Egypt. Then Dubai’s foreign residents got involved. With Covid-19, and then the war in Europe, Ukrainians and Pakistanis joined their ranks. For well-heeled Iranians, Turkey holds a special appeal – not only because it is a neighbouring country and one of the few that Iranians can enter without a visa, but also because the Turkish lira has undergone a sharp devaluation (in the last two years it has lost half its value against the dollar) due to high inflation (39% this year). Iranians are penalized less by their own devaluation and inflation buying real estate in Turkey than elsewhere: at present they are purchasing an average of 10,000 housing units per year. These are profitable assets, as housing prices are rising in Istanbul as all along the Mediterranean coast. As one agency for citizenship applications put it, ‘You can think of Turkey as a home, insurance and investment.’

Citizenship has in this way been financialized, transformed into a product akin to structured investment vehicles. Though compared to the worldwide flow of migrants (numbering around 200 million), naturalizations by investment are infinitesimal – about 50,000 a year – they reveal more about citizenship than we might suppose. For example, about how much citizenship affects out-of-state citizenship, since we always carry it on us and cannot divest ourselves of it. Visiting India, I was always amazed at the ability of locals to guess the nationality of European tourists. I realized that our nationality system is for them a kind of caste system, and that they are well trained in distinguishing among the many castes with which they have grown up (there are about 3,000 in total, with 25,000 sub-castes).

Perhaps the most curious phenomenon recounted by Surak is that of Americans seeking dual nationality. Many of them are foreign residents who do not want to continue paying taxes to the US (where the tax regime stipulates that you must cough up no matter wherever in the world you live or earn your income). Others seek a second nationality so they can travel. A great sociologist with dual nationality told me that since 9/11 she always travels with her European document. Others applied after Trump’s election. Who knows what they will do come November 5.

Read on: Marco D’Eramo, ‘Geographies of Ignorance’, NLR 108.