micro-nation-state-232The world is in for some radical changes ahead. Hold on tight, we are in for a wild ride.

Building islands, selling them as autonomous countries

On a recent trip to Dubai, I spoke at the prestigious “Leaders in Dubai” forum along with the likes of Tom Peters, former NY City Mayor Rudy Giuliani, former World Bank President James Wolfensohn, Citi Group Chairman Sir Win Bischoff, and former McKinsey CEO Rajat Gupta.

While most were trying to address issues surrounding our depressingly screwed up economy, I decided to take a rather different approach. My focus was on emerging new Power Tools for the coming years, one of which was the idea of selling islands as autonomous countries.

Dubai and the UAE are on the cutting edge of island-building technology. Their creative approach to building Palm Island along with the coming Palm Jumeirah, the Palm Jebel Ali, Palm Deira, and The World, have become an inspiration to other countries such as Bahrain, Thailand, and the Netherlands where new islands are also springing to life.

Countries in the Middle East have a distinct advantage when it comes to island-building because the Persian Gulf is a far more stable body of water than any of the major oceans.

My talk centered on the concept of building islands, and rather than selling them as real estate, to sell them as autonomous countries.

From Island Building to Nation Building

Let’s face it. Who doesn’t want to own their own country? If this was an option, I would venture to say that the secret desire to own their own country would rank at the top of most people’s list.

The first obvious question to ask: Why is this a good idea? Why is this a good idea for the selling country, and why is it a good idea for the buying entity? Let me take a few minutes to address both the upside and the downside of doing this.

To begin with, the demand from people wanting to buy their own country will be very strong. The notion of owning a country is highly appealing, and will likely turn into a bidding war. An island country can command a far greater return on investment than selling an island as real estate. The additional value comes from the additional rights that are conveyed along with the purchase.

People who buy the island countries will be very wealthy, and there is great value in having wealthy neighbors.

The nation that sells the tiny countries, and I’m presuming it will only be nations that have the authority to sell land as independent countries, will become the host nation to all of the micro-nation states it creates. In this role, the host nation will provide many of the primary services such as power, electric, water, transportation, trash removal, etc.

Businesses that develop around the selling of services to the Micro Nation States, will likely become a significant industry.

Done correctly, each of the Micro Nation States will also get a vote in the United Nations. With the creation of enough island countries, it may become possible to influence global politics.

More importantly though, by giving up authority over these islands, host nations will find that they have greatly increased their influence globally. Any nation that becomes expert in building other nations will command the respect of the entire world.

What Exactly Is a Country?

The dictionary definition of a nation is “A part, or division, of the people of the earth, distinguished from the rest by common descent, language, or institutions; a race; a stock.”

Law professor, Pastor Ridruejo, defines a nation as an entity with a government that totally controls a stable population in a delimited territory.

In the past we have associated the concept of country with attributes such as a single geographical territory, a common people with a common language, a common government with its own currency and its own set of laws and regulations, and a series of systems that tie the country into a functional entity.

However, in this context, an island country is more about the freedom of self-rule. For each person, the freedoms associated with any self-governing country will be prioritized differently. Some will see this as a scheme to avoid taxes, while others will see it as an opportunity to build something great. But perhaps their greatest value is in their ability to experiment.

Recognition

Once a new country is formed, the issue of recognition comes into play. Recognition is a primary factor in an emerging country’s credibility and often determines the stability of the new government and the role the country will play in the international arena. There are two primary forms of recognition:

1. Internal – Recognition by the people living inside that country. Since the newly formed island countries will have no indigenous populations, this becomes a non-issue.

2. External – Recognition by other countries, or people or organizations outside the country.

The Institute of international law stated in its Brussels session in 1936:

“Recognition of a new Nation is a free decision by which one or several Nations corroborate the existence on a DETERMINED TERRITORY of a human society, POLITICALLY ORGANIZED, INDEPENDENT of any other nation, capable of complying with International Law, and their decision is made public, recognizing the new Nation as a member of the International Community”.

Some European nations have taken the step of formalizing recognition standards, stating that any new nations must satisfy certain legal requirements. On Dec 16, 1991, the Foreign Affairs ministers of the European Union decided to adopt a set of criteria that new member states emerging from the old Eastern Europe and Soviet Union must satisfy in order to become officially recognized. The criteria include the following four items:

a) Respect all points of the Charter of the UN, Helsinki Summit Final Act and Charter of Paris for a New Europe.

b) Guarantee rights for minorities and other groups as per the agreements of the CSCE (Conference for Security and Co-operation in Europe)

c) Respect the unchangeable nature of national borders that can only be changed peacefully through common agreement.

d) Commitment in reaching common agreements on all matters related to State succession and regional controversies.

The Value of Proximity

When island countries are first created, they will be rather boring places to live. For this reason, soon-to-be buyers will place great value on their country’s proximity to other countries. They will be looking for Host Countries with good culture, entertainment, goods & services, talented people, low crime, and a number of other attributes.

Much of the value attributed to a country initially will be determined through a weighted checklist used to assess surrounding assets. Creating an island country close to Antarctica may seem like a good idea, but the amount people will be willing to pay will be far less than one near a well-developed topical paradise.

The Experimental Nation State

A country with no indigenous populations is a blank slate, and a chance to experiment and test new systems.

The operating system for the world today is comprised of a series of intertwined complex systems. Some are global in nature while others are systems specific to an individual country or region. But once created, these complex systems govern everything from operating a business to how to deal with troublemakers. These systems are firmly anchored into place with a vast body of laws which makes them increasingly difficult to change.

Very few aspects of life remain unaffected by an existing system.

However, a newly formed island with no indigenous people, no existing structures, or government becomes a perfect laboratory for experimentation. Much like an artist who positions a pure white canvas onto an easel, an experimental nation state will begin, through trial and error, to craft the world’s next great masterpiece.

Many experiments will fail. But unlike the modeling being done in virtual worlds, these island countries will serve as a real world test bed for tinkering with real world systems on a small scale.

Until we unleash the power of experimentation, we have little or no sense of what our true potential actually is.
One Scenario

There are many possible scenarios for how an Experimental Nation State may be used, but let’s consider one example.

One of the first island countries that is created is purchased by Google.

It becomes the first Corporate Nation State, not governed by a dictator, Prime Minister, or President, but by a CEO with a Board of Directors, influenced by shareholders.

Google decides to use the Experimental Nation State to test out a new loan matching service designed to match the money from Middle Eastern countries with prospective borrowers around the world. They decide to set up this operation in their own country as a means of circumventing the onerous banking and lending laws in nations around the world.

While they have no intent to do anything illegal, this arrangement offers them great efficiency without having to deal with the onerous regulatory agencies.

With Google’s extensive data mining capabilities, they have the ability to know more about every person and every organization than any credit bureau ever will. This enables them to instantly match up lenders and borrowers, and optimize the loan packages for both sides in the process.

Once this process is in place, borrowers and lenders around the world begin to shift to the new Google loan system, altering financial markets in nearly every country.

Whether this scenario intrigues you or frightens you, its easy to see the enormous potential for unleashing potent new engines of innovation.

Some Predictions

Let me begin with a question. If you could live where you are living today, do the exact same work that you’re doing today, and make the same money you’re making today, but you had the option of becoming a citizen of another country, what would be the compelling reason for you to make that decision?

This is exactly the type of question that governmental architects will be wrestling with as they consider the value proposition between a country and its people. This entrepreneurial approach to nation-building will quickly become the topic of global conversations.

Here are a few predictions:

    • Island countries will begin to emerge within the next ten years and they will dramatically shift the face of global politics.
    • New forms of government and unusual political models will begin to emerge including corporate nation states, religious states, tax-free zones, single function countries, cause related countries, and even rental nation states where organizations can “rent a country” for a year or two to test out a specific project.
    • Many experimental nation states will fail, giving rise to a resale market for island countries.
    • Existing nations will buy their own island countries as a way to extend their influence in other parts of the world. It may be their way of creating a subsidiary country to test new systems.
    • “Open enrollment” citizenship is the concept of creating a virtual citizenry where citizens do not having to reside in the country they are affiliated with. Open enrollment will cause many new laws to be created to sort out responsibilities between countries and their people.
    • Once the number of new countries created starts to climb, many existing countries will begin asking that a moratorium or limits be placed on the building of new countries.
    • A great migration of wealthy families will begin to cause grave concerns among established governments.

Some countries will build new islands and sell them as countries, while others will sell either existing islands or existing tracts of land as autonomous countries.

  • Countries who create and sell other countries will suddenly achieve higher status in the court of world opinion, and we will see an interesting power shift as this occurs.
  • In an unusual shift of thinking, as more and more countries come into being, vying for the attention of the wealthy and talented, existing countries will be forced to compete to retain their own citizens.

The world is in for some radical changes ahead. Hold on tight, we are in for a wild ride.

By Thomas Frey

5 Responses to “Owning Your Own Country”

Comments List

  1. Terry Wynn

    The value of owning a country (other than recreation and vanity)is being able to do things locally that can be transferred globally. The example cites banking and taxation. Manufacturing/research that would cross regulations in 1st world countries are another. However, all of these require "shipping" to 1st world countries, either through banking and moneylaundering laws, taxation policy, and trade regulation. As Neteller showed, the US can neutralize offshore banking for most when they desire it. Recognition is all, and recognition is granted from the big boys, not created by island building nations. And the big boys will guard their previledges well. And you forgot one key nation function DEFENSE. Somali pirates anyone?
    Reply
  2. <a href='http://www.ruthhoward.edublogs.com' rel='external nofollow' class='url'>Ruth Howard</a>

    Rising water levels?!Thinking particularly of Dubai's current construction projects.
    Reply
  3. <a href='http://www.amazon.com/Anglosphere-Challenge-English-Speaking-Nations-Twenty-First/dp/0742533336/ref=sr_1_1?ie=UTF8&s=books&qid=1237409721&sr=1-1' rel='external nofollow' class='url'>Jim Bennett</a>

    Basically, there is a world market for sovereignty services. These include issuance of currency, banking and incorporation venues, and passports. They are sold or rented unbundled, with small providers such as the Caymans or Panama marketing most aggressively. However, they are at one end of the spectrum, competing on price (both acquaisiton price and ongoing costs, such as taxes), convenience of obtaining, and high privacy. The USA and the European Union compete on features such as stability, protection, and, on currency, the size of the installed base. As Terry notes above, the sovereignty provider's cartel has already been aggressive about curbing competition in unbundled, retail competition for single sovereignty services. You are suggesting greatly expanding the supply from the current 200+ providers, and making such services available on a wholesale basis. They form, in effect, a seller's cartel, with the UN as their trade association or union. I suspect it is highly unlikely that the cartel will permit carte blanche dilution of the value of their assets, especially in strained economic times. The history of would-be sea-based competitors such as Atlantis or Sealand suggests that they will use as much state force as is needed to maintain the oligopoly.
    Reply
  4. Rudy Kuzniar

    I have become very interested in the prospects for starting a virtual country or somehow forming my own land-based country. As you mention, getting the intent and purpose right up front is critical. Your line of thinking is precisely the type of post I appreciate, both instructive and interesting. Its time we begin to break apart the current power structure and try something new. Don't stop the excellent posts! Rudy
    Reply
  5. Jeffrey Netherwood

    All due respect for everyone that thinks this idea of creating islands and selling them as countries, it will happen someday, and you cant stop it. This is a great idea. It will help the economy of the nation creating the islands and will influence the UN to allow more nations into their meetings. I do think, that this will not happen till far into the furture. Plus, yes everyone might at sometime want to start a country, but the island being made is man made. You can't put iron ore and coal and other minerals crutial for the creation of a nation there. IT'S IMPOSSIBLE!!! Unless they find a way to do that, the nation will fall in les than a year if they don't want to go bankrupt buying the resources.
    Reply

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