Business, Economics and Jobs

There's big business behind rankings of passports and citizenship

A man from El Salvador holds his passport in the back of a U.S. border patrol vehicle after he is apprehended for illegally crossing into the United States from Mexico in La Joya, Texas, U.S., October 17, 2018.

A man from El Salvador holds his passport in the back of a US border patrol vehicle after he is apprehended for illegally crossing into the United States from Mexico in La Joya, Texas, Oct. 17, 2018.

Credit:

Adrees Latif/Reuters

It takes a lot of courage to quit your day job to travel the world. It takes even more courage if you’re not rich and you hold an Iranian passport.

Ten years ago, that’s exactly what Mehdi Parsa did. He left his job as a physics teacher in Tehran, Iran, and became a full-time traveler.

Since then, Parsa has petted huskies in Siberia, played the xylophone with locals in Zimbabwe and sang a traditional Swahili song at Mt. Kilimanjaro. (Full disclosure, I was with him on that trip. He’s a friend.)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Today, Parsa makes a living by organizing and leading budget-friendly tours for small groups of Iranians. When choosing a destination, the first question on his mind is: How easy will it be to get a visa?

"Unfortunately, my passport is a huge barrier, a gigantic mountain," he says from his home in Tehran. "For a lot of people, the word 'passport' evokes movement, travel. But for me, it’s the opposite. It’s a reminder of hardship and pain."

Outside of our home countries, our lives come down to one document: our passports. And not all passports are created equal. Some open doors across the world that others don't.

We are reminded of this hierarchy every now and then through passport ranking lists published online.

Speaking with Parsa, I wanted to know how his passport compares to others. So I called up Atossa Araxia Abrahamian, senior editor for The Nation and the author of "The Cosmopolites: The Coming of the Global Citizen."

“I’m scrolling down, down down," Araxia Abrahamian said looking it up, “I’ve passed Venezuela, I’ve passed St. Vincent, Togo, Kyrgyzstan, Uzbekistan, Mali, Liberia [...] I think Iran is all the way down there."

One hundred and thirty-seventh to be exact. Out of 168 countries on this list. What Araxia Abrahamian was looking at is called The Quality of Nationality Index.

It’s a ranking of countries created by a company called Henley and Partners, a consultancy firm that specializes in citizenship and residency-by-investment. According to its website, the ranking is based on something called the "internal and external value of nationality," which include settlement freedom and travel freedom, among other factors.

The US ranks 27th on this list. France, Germany and Iceland are at the top.

"You don’t choose your parents, you don’t choose where you’re born, you don’t always choose where you live and it’s so arbitrary," says Araxia Abrahamian.

Arbitrary for someone like Parsa but not for everyone.

Over the past 10 years or so, Araxia Abrahamian explains, a whole industry has emerged around the sale of citizenship "complete with accountants, lawyers, bankers, this whole cottage industry around countries selling passports. And one of the ways that they market a citizenship is by quantifying all of the advantages that somebody would obtain by getting this citizenship."

Which means those passport and nationality rankings we see online? They’re not just for fun. In my friend Parsa’s case, it's just salt in the wound.

And there’s big business behind them. Dominic Volek is the managing partner of Henley and Partners in Singapore and he says every September, a group of researchers at his company receives a set of data from the International Air Transport Association, a trade organization made up of major airlines based in Canada. 

"This is exclusive data that they provide to us on a fixed date every year," says Volek.

The researchers then take that data and add in publicly available information, as well as information they acquire from governments and they come up with a ranking for passports.

So, who is this for?

"The profile of our clients are typically entrepreneurs," says Volek. "Of course, you get the odd client that has made a fortune out of cryptocurrencies or has just inherited a lot of money. Of course we get a lot of interesting characters."

Volek wouldn't say more about these "interesting characters." But he said, imagine you are a rich business owner in Bangladesh. You want to travel for work but you are limited because of the passport you hold. Well, you can invest in a country with a higher-ranking passport and with more freedom of movement.

"So, at least half of the reason why people are doing citizenship-by-investment is to acquire a second citizenship and to get greater mobility," Volek says. "There, the Caribbean and places like Moldova have visa-free access to the Schengen, Singapore, Hong Kong  — which makes both business and leisure much easier for these individuals."

The required amount of investment varies from country to country. It starts from just $100,000 in Dominica, for example, to about $2 million in Cyprus, up to about $24 million in Austria.

There are about two dozen countries that offer citizenship or residency-by-investment. Both the United States and Canada have immigration-by-investment programs.

According to Volek, there are currently around 80 programs available worldwide. But he adds only "about 30 of these are active and successful. The range and breadth of programs is constantly expanding [...] residence and citizenship options are now available in most of the major world regions, including the Caribbean, North America, Europe, Southeast Asia, Oceania, and even most recently, Central Asia."

To supporters, these investments can be a lifeline for struggling economies. He points to Saint Kitts and Nevis in the Caribbean where, he says, citizenship-by-investment programs have helped save its dying sugar industry.

After Hurricanes Maria and Irma hit the region last year, some Caribbean countries began selling their citizenship at a discounted price to raise emergency funds.

But author Araxia Abrahamian argues that while the sale of citizenship might offer a plan B for some citizens — say, those living in repressive regimes — it raises a lot of questions.

"It actually really cheapens the value of citizenship from a statecraft perspective, from a civic perspective," she says. "Because if you can buy a passport what does it even mean anymore? Is it really this special thing that you and only you were chosen to have? It is really something that also comes with rights and responsibilities?"

The Organization for Economic Cooperation and Development, a Paris-based economic think tank, published a report last month that said these so-called "golden passport" schemes threaten international efforts to combat tax evasion.

"It’s not all tourism and visiting the wonders of the world," says Araxia Abrahamian. "There’s some pretty dark stuff that’s going on beneath."

Meanwhile, Volek of Henley and Partners thinks this industry is only going to grow.

He says in the past year or so, he’s seen a rise in the number of Americans applying for a second or third citizenship. One client, he says, renounced his American citizenship altogether to get one from Singapore.

Singapore happens to rank number two on Henley and Partners list of most powerful passports. 

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