U.S. competitive position and capital investment flows in the economic citizen market: constraints and opportunities of the U.S. investor program

American Journal of Economics and Sociology, The,  April, 1998  by Curtis M. Jolly,  Mary Knapp,  Tridoyo Kusumastanto

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Other Countries

To revitalize its external economy, Singapore recently formed a committee to recruit a new class of entrepreneurs with exceptional interpersonal skills (Balakrishnan, 1993). The country offers investment allowances and corporate and personal tax incentives as well. Taiwan offers citizenship to almost all overseas Chinese from the Philippines, Indonesia, Malaysia, Thailand, and Singapore; the lure of economic opportunity attracts many of these migrants. However, Taiwan has offered only passive welcome to Hong Kong residents for fear of offending the People's Republic of China. A growing number of South Pacific, Central and South American, and Caribbean countries offer investment immigration as well. Countries offering "cheap" passports include Tonga, Fiji, Mauritius, Philippines, Belize, Venezuela, Peru, Argentina, Brazil, Panama, Paraguay, Uruguay, and Jamaica.

Australia has one of the oldest programs but it has been overhauled a number of times in the past ten years. Powerful voices favoring immigration persist, especially those who see immigration as essential to increase Australia's trade and improve her relations with the dynamic economies of Northeast and Southeast Asia (Castles 1992). Australia's policies are more attractive (two-year residency, for example) than Canada's, but Australia is perceived as a less desirable locale for Hong Kong migrants because of its past discriminatory immigration policies.

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Comparative Analysis

THE CANADIAN PROGRAM is the most comprehensive of all. It has attracted billions of dollars and more investors than any other. Business immigrants have been distributed in nine provinces throughout Canada, although British Columbia and Ontario have received the largest percentages (39% and 30% respectively). In 1995 alone, Canada received 2,012 investors compared to 291 for the U.S. and 320 for Dominica. In the U.S., the data on distribution of applicants are not available, but Dominica is so small that program participants all reside in the capital city or in the surrounding areas. The Canadian program has been able to attract 28,935 business investors of the 76,000 anticipated from 1992 to 1995. The total amount of investment subscribed in 1995 was C$606,750,000 for Canada. The total number of jobs created in Canada through this program from 1986 to 1995 is 18,845 full-time, and 3,060 part-time. A total of C$142.9 billion have been invested, with 26.8% in the beverage food and accommodation industry, 21.6% in construction, and 12.2% in manufacturing. The other 39.4% are distributed across 14 other major industries. Canada received 33.7% of its business immigrants from Hong Kong, 17.3% from Taiwan, and 10% from South Korea in 1995. These three countries have continued to dominate the arrivals of business immigrants to Canada since 1992.

Of an anticipated 5,000 investors, a total of 1,084 have been approved from 1991 to 1997 under the economic citizenship program of Dominica. The country received US$37,940,000 as direct investment during this period. Most of the migrants came from the U.S. and Taiwan; only a small number arrived from Hong Kong in 1996. The number of requests fluctuated annually, with the largest number of arrivals in 1995 and 1996. The latest migrants come mainly from Eastern Europe and the People's Republic of China. Most of the investors operate in the hotel and tourist industries.