The French TV investigative documentary on the alleged abuses of the Individual Investment Programme (IIP) has opened a can of worms that many suspected existed but had little evidence of its potential perversity. It is time to scrap this broken system that is causing too much collateral damage to the economy and society.

The IIP scheme has attracted substantial investment to Malta. Public finances improved as money paid to buy passports flowed into the treasury, property developers experienced a surge in demand for all types of pro­perty, banks earned commissions for managing the proceeds linked to the scheme, and legal and accountancy firms earned fat fees to guide ‘investors’ through the maze that in practice left significant discretion in the hands of politicians.

The positive knock-on effects of the IIP scheme have desensitised public opinion to the severe risks that Malta was exposed to by selling European freedom of movement to foreigners.

Many passport buyers come from countries with a less than exemplary reputation for respect of the rule of law and democracy. No wonder that some member states are irked by the loophole that exists in EU agreements like Schengen that allows a small country like Malta to have sole discretion over which nationals from non-EU countries it can grant freedom of movement in the Union.

There is little doubt that Malta’s IIP and similar schemes will again come under political scrutiny from the EU.

It is also bound to raise the question of moral hazard as no single State should put other EU citizens at risk by selling citizenship to the wealthy non-Europeans who covet this privilege.

The government will continue to argue that the IIP scheme is backed by a robust due diligence process that should weed out undesirable individ­uals from obtaining Maltese citizenship.

The French documentary exposed an even more worrying reality that many locals strongly suspected existed between so-called professionals and politicians who indulge in influence peddling to the detriment of society. One could argue that the lawyers and business people who featured in the French TV documentary may have just been bluffing and that in reality the government’s denial of abuse is a more credible version of what really happens in this small island where politicians and business people are often involved in a perverse relationship that does the country’s moral fibre no good.

It would be fallacious for the government to continue to write off the various allegations of abuse in the IIP process as mere journalistic hype. No electoral success can justify the moral hazards of selling citizenship in a seemingly legal way but in an overtly corrupt environment. The collateral damage to other sectors of the eco­nomy, including genuine direct foreign investment and tourism, are being ignored by the government in its quest to keep blowing the economic bubble.

The Maltese economy is going through a good phase of growth, even if the sustainability of this growth in specific sectors is not assessed correctly. What matters for Maltese society is not how much the economy grows by the time the Prime Minister decides to leave the political scene, but how robust are the foundations of our various economic sectors.

We are in the enviable position of having improved public finances. We do not need to risk our achievements by promoting high-risk activities like selling citizenship. The argument that money coming from the IIP scheme will help solve our huge pensions problem and facilitate investment in our health system and our infrastructure is fallacious. It is also clear evidence of an administration that is only interested in short-term gain without the pain of restructuring the fundamentals that make long-term growth possible and sustainable.

The Opposition must speak unequi­vo­cally and consistently about the IIP scheme. The lobbies in favour of the scheme are likely to include property developers, banks and legal and accountancy firms. Their sectarian interests should never be prioritised at the expense of the common good.

The government’s damage limitation programme following the publication of more evidence of the perversity of the IIP scheme will not clean the blot that has stained Malta’s reputation in the last few years. The allegations of corruption in the highest levels of political life, the promotion of a culture of impunity, and a dubious commitment to true democratic values are the albatrosses around the Prime Minister’s neck.

It is time for the Prime Minister to free himself and the country of one of these albatrosses by scrapping the IIP scheme.

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