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Sovereignty sales, economic revitalisation and inclusive development in Small Island Developing States (SIDS)

Working paper

Image credit:Nanumea island, Tuvalu. Credit: TCAP/UNDP

Small Island Developing States (SIDS) face unique vulnerabilities due to their size, remoteness, narrow economic bases, exposure to climate change and natural hazards, often high levels of debt, and their marginality within international financial architecture and trade structures. Faced with these challenges, many SIDS have sought novel ways to diversify economies and revenue streams.

Sovereignty sales schemes – whereby investors secure residence or citizenship rights in return for an economic donation or investment – can generate significant revenues as well as attracting condemnation and opprobrium. So, how can SIDS most effectively mobilise sovereignty sales to promote sustainable development and economic diversification, without surrendering political legitimacy, international standing, and national autonomy?

Daniel Hammett presented the initial draft of this paper at the SIDS Future Forum in March 2024. Timestamp 1:47:15

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SIDS Future Forum Day 1 Block 1

Synthesising literature on sovereignty sales in SIDS, and beyond, demonstrates that this is a rapidly evolving market that presents key opportunities for SIDS’ sustainable development, in relation to accessing alternative finance streams, developing productive populations, and promoting innovation and digitalisation.

To realise these possibilities, this working paper makes key recommendations for the promotion of enhanced scheme governance and transparency, greater understanding of impacts to support optimal local developmental outcomes, and ways to future-proof sovereignty sales revenues.

Authors: Daniel Hammett, Sarah Peck, Owen Parker