A Blog by Jonathan Low

 

Feb 26, 2018

The Rise of Digital Citizenship

In a borderless digital socio-economic system, e-citizenship is a natural extension of the movement of goods, services and people. But for the moment, it is primarily for the very rich. JL

James Bridle reports in The Atlantic:

Golden visas trade citizenship for cash by setting a price on passports. If foreign nationals invest above a certain threshold, they can buy their way into a country, once they hold a citizenship. A passport acquired through Cyprus's scheme makes the bearer a citizen of the European Union, with all the benefits. There's no requirement to reside in
or even to visit Cyprus. Estonia offers its citizenship as a digital service. It has registered more than 30,000 e-residents. Citizenship is under pressure to adapt.
“If you believe you are a citizen of the world, you are a citizen of nowhere. You don’t understand what citizenship means,” the British prime minister, Theresa May, declared in October 2016. Not long after, at his first postelection rally, Donald Trump asserted, “There is no global anthem. No global currency. No certificate of global citizenship. We pledge allegiance to one flag and that flag is the American flag.” And in Hungary, Prime Minister Viktor Orbán has increased his national-conservative party’s popularity with statements like “all the terrorists are basically migrants” and “the best migrant is the migrant who does not come.”
Citizenship and its varying legal definition has become one of the key battlegrounds of the 21st century, as nations attempt to stake out their power in a G-Zero, globalized world, one increasingly defined by transnational, borderless trade and liquid, virtual finance. In a climate of pervasive nationalism, jingoism, xenophobia, and ever-building resentment toward those who move, it’s tempting to think that doing so would become more difficult. But alongside the rise of populist, identitarian movements across the globe, identity itself is being virtualized, too. It no longer needs to be tied to place or nation to function in the global marketplace.
Hannah Arendt called citizenship “the right to have rights.” Like any other right, it can be bestowed and withheld by those in power, but in its newer forms it can also be bought, traded, and rewritten. Virtual citizenship is a commodity that can be acquired through the purchase of real estate or financial investments, subscribed to via an online service, or assembled by peer-to-peer digital networks. And as these options become available, they’re also used, like so many technologies, to exclude those who don’t fit in.
In a world that increasingly operates online, geography and physical infrastructure still remain crucial to control and management. Undersea fiber-optic cables trace the legacy of imperial trading routes. Google and Facebook erect data centers in Scandinavia and the Pacific Northwest, close to cheap hydroelectric power and natural cooling. The trade in citizenship itself often manifests locally as architecture. From luxury apartments in the Caribbean and the Mediterranean to data centers in Europe and refugee settlements in the Middle East, a scattered geography of buildings brings a different reality into focus: one in which political decisions and national laws transform physical space into virtual territory.
The sparkling seafront of Limassol, the second-largest city in Cyprus, stretches for several miles along the southwestern coast of the island. In recent years it has become particularly popular among Russian tourists and emigrants, who have settled in the area. Almost 20 percent of the population is now Russian-speaking. Along 28 October Avenue, which borders the seafront, new towers have sprung up, as well as a marina and housing complex, filled with international coffee and restaurant chains. The 19-floor Olympic Residence towers are the tallest residential buildings on the island, along with the Oval building, a 16-floor structure shaped like its name. Soon a crop of new skyscrapers will join them, including three 37- to 39-story towers called Trilogy and the 170-meter One building. Each building’s website features text in English, Russian, and in several cases, Chinese. China’s Juwai property portal lists other, cheaper options, from hillside holiday apartments to sprawling villas. Many are illustrated with computer renderings—they haven’t actually been built yet.
The appeal of Limassol isn’t limited to its excellent climate and proximity to the ocean. The real attraction, as many of the advertisements make clear, is citizenship. The properties are proxies for a far more valuable prize: a golden visa.
Visas are nothing new; they allow foreigners to travel and work within a host nation’s borders for varying lengths of time. But the golden visa is a relatively recent innovation. Pioneered in the Caribbean, golden visas trade citizenship for cash by setting a price on passports. If foreign nationals invest in property above a certain price threshold, they can buy their way into a country—and beyond, once they hold a citizenship and passport.
A luxury holiday home on Saint Kitts and Nevis or Grenada in the West Indies might be useful for those looking to take advantage of those islands’ liberal tax regimes. But a passport acquired through Cyprus’s golden-visa scheme makes the bearer a citizen of the European Union, with all the benefits that accrue therewith. Moreover, there’s no requirement to reside in or even to visit Cyprus. The whole business, including acquisition of suitably priced real estate, can be carried out without ever setting foot on the island. The real estate doesn’t even have to exist yet—it can be completely virtual, just a computer rendering on a website. All for just 2 million euros, the minimum spend for the citizenship by investment.
As a result, Cypriot real-estate websites are filled with investment guides and details on how to apply for a new passport. This is the new era of virtual citizenship, where your papers and your identity—and all the rights that flow from them—owe more to legal frameworks and investment vehicles than any particular patch of ground where you might live.
Cyprus is a compelling location for such international games. Strategically anchored in the eastern Mediterranean, the island has long been a coveted and contested territory. Through the centuries, it has been occupied by Frankish crusaders, Venetian merchants, and Ottoman raiders. Since the Turkish invasion of 1974, Cyprus has been divided into two territories: the strongly Greek-identified but independent Republic of Cyprus in the south and west, and the disputed Turkish Republic of Northern Cyprus to the east. Another former colonial power, Britain, maintains its own legal and independent territories on the island, the Sovereign Base Areas of Akrotiri and Dhekelia.
Power has often roosted here, poised to prey upon nearby territories. At one end of the island, fields of satellite dishes at NSA/GCHQ’s Ayios Nikolaos Station keep a close watch on the Middle East; at the other end, across the bay from Limassol, U-2 spy planes and RAF Tornadoes bound for Syria and North Africa roar out over the sea. In the case of the Limassol towers, that power is wealthy Russian and Chinese investors with an eye on accessing the European Union. Meanwhile, older residents of the city find themselves cut off from the sea, their homes overshadowed, and most of the profits from the golden-visa scheme disappearing into the pockets of law firms, developers, and politicians.
Juwai, the Chinese portal, casts a wider eye than just Cyprus. Its website hosts a side-by-side comparison of various golden-visa schemes, laying out the costs and benefits of each, from the price of the investment to how long buyers must wait for a new passport to come through. Not all the schemes are created equally. Cyprus’s neighbor Greece has one of the cheapest schemes going, with residency available for just 250,000 euros. But that’s only residency—the right to stay in the country—not local, let alone EU, citizenship, which can take years to obtain and might never be granted. Sometimes the schemes have gone awry, too. Some 400,000 foreign investors in Portugal’s 500,000-euro golden-visa scheme have been left in limbo by bureaucratic collapse, waiting years for a passport which was promised within months. Chinese homeowners have been forced to fly in and out of the country every couple of months in order to maintain short-term visas, despite having paid thousands for property.

Other real-estate schemes have fallen into disrepute thanks to even murkier political arrangements. A decade ago, a Kuwait-backed company set out its stall on the tiny Indian Ocean archipelago of Comoros. As Atossa Araxia Abrahamian explains in her recent book, The Cosmopolites, Comoro Gulf Holdings erected billboards along the seafront of Grande Comore featuring computer renderings of business parks and luxury apartment complexes designed to appeal to wealthy foreigners in search of passports. But the buildings never got off the drawing board. Instead, Comoros found itself entangled in a much shadier deal with the Gulf states. Having agreed to open up its citizenship to investors, the islands—or at least certain members of their government—received huge payments, mostly from the United Arab Emirates. But the passports, sent over in bulk and frequently surfacing on the black market, weren’t for Emiratis. Rather, they were for the Bidoon: the more than 100,000 people across the Gulf nations who, despite residing in the region for generations, have never been included as citizens, and are effectively stateless.
For years, the Gulf states have come under international pressure to address the issue of their stateless populations. The United Nations has declared that
it wants to end statelessness by 2024. The market in citizenship provided a tempting opportunity to resolve the problem. Once again, people were given the chance to acquire the passport and associated rights of a place they’d never seen and where they probably never intended to live. In this case, however, they were more coerced than willing: Few Kuwaiti and Emirati Bidoon had ever heard of, let alone visited, Comoros. Many were tricked into accepting when renewing other documents, or had travel permits and driving licenses held ransom until they signed. While most have been allowed to remain in the Gulf, the acquisition of a passport means that troublesome Bidoon—particularly those agitating for better conditions—can be quietly shipped out of the country.
The legal frameworks of virtual citizenship invert and globalize the logic of the special economic zone—a geographical space of exception, where the usual rules of state and finance don’t apply. Special economic zones are one of the key innovations of global capitalism, stretching back to the British Empire’s treaty ports in China and Japan in the 19th century, and underpinning the hyper-accelerated growth of Shenzhen and Dubai in the 21st. Historically, they’ve been used to protect commercial interests and allow for wild experiments in industry and real estate, but increasingly they are being touted as a solution to issues of migration and citizenship.
In Jordan, where most of the 650,000 Syrian refugees are barred from jobs, the King Hussein Bin Talal Development Area has been set up on the outskirts of the sprawling Zaatari refugee camp. It is mandated to employ the refugees as a percentage of its workforce. The zone is the result of the Jordan Compact: an agreement between the Hashemite Kingdom and the European Union to provide jobs for refugees in return for special trade rules and access for European companies. Among the proposed launch partners are Ikea and the supermarket giant Asda, who will get access to cheap labor, and whose produced goods can be imported tax-free into Europe. The refugees, meanwhile, are required to stay where they are. Their position is akin to the passport-trading cosmopolites in one respect: They are subjects of the globalized economic system more than citizens of a nation.
Other states are exploring ways in which they can adjust their own citizenship laws to benefit from shifting populations. The small Baltic nation of Estonia prides itself as the most wired nation on Earth, having spent decades investing in new technologies and structuring government policy to reward innovation and Silicon Valley–style disruption.
In 2014, the country started offering a slice of its citizenship as a digital service. Since then, it has registered more than 30,000 e-residents, who are permitted to open bank accounts, start companies, sign documents, and pay tax under Estonian jurisdiction and law. In 2017, a section of a data center in Luxembourg was declared sovereign Estonian territory to facilitate the country’s first digital embassy, which also functions as a secure, remote backup for all of the country’s digital records. The arrangement for e-residents themselves remains non-territorial: They gain no rights to live in Estonia, nor do they accrue any other kind of physical benefit. In the spirit of innovation, the Estonian government has unbundled the services expected of such an arrangement. It amounts to a virtual middle ground between citizenship and global residency.

The world is in the midst of the greatest movement of people since the end of the World War II, and the combination of increasing global inequality and climate
change will only increase its pace. Two hundred million people are on the move now, and as many as a billion might become migratory by 2050. Citizenship, the only tool we have for guaranteeing rights and responsibilities in a world of nation-states, is subject to increasing pressure to adapt. Today’s virtual citizenship caters mostly to the wealthy, or the poor. Could tomorrow provide new opportunities for everyone? And if possible, will the results look more like what’s been done for the global elite or for the most disadvantaged? For now, the weird enclaves of virtualized citizenship amount to an international, distributed version of gentrification—the urban scenario in which those with resources dramatically alter the social conditions in a city, with little benefit accruing to those who were there already, or cannot enter. The virtualization of citizenship mostly benefits those whose individual, state-sponsored sovereignty doesn’t match their personal wealth. At the same time, the same mechanisms that allow Chinese citizens to establish businesses in Estonia and legal residency in Cyprus, and thus the EU, also disempower and marginalize the stateless populations of Emirati Bidoon and Syrian refugees.
In principle, nothing would prevent the Estonian model from being generalized to other guarantors of state protection, including wider legal rights and health care, which are of more concern to the less fortunate. Estonia already runs its citizens’ health-care registry on the blockchain—the cryptographic record that underlies Bitcoin, but that can be applied beyond currency transactions to verify the authenticity of a record via computational “proof of work.” Blockchain health records allow both patients and medical practitioners to access and review their data, while securely tracking who has access to it. Independent groups are following suit, with start-ups such as Bitnation proposing a “peer-to-peer voluntary governance system” to replace the arbitrariness of birth as the decider of one’s citizenship. Blockchain governance could allow for the creation of virtual citizenship and autonomous communities distinct from territorial nation-states.
But how it would overcome the existing demands of those territories remains less clear. In a truly globalized world, freedom of movement would be a given, requiring neither proof of residency nor proof of work. For now, though, the combination of wealth and land, evident in both Cypriot apartments and undersea cables, remains the ultimate arbiter of human lives.

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