Feb 17, 2014

Falkland Islanders may get US$500,000 citizen dividends each annually, potentially.

Falkland Residents
The Falkland Islands has a tiny population of 3000, and a potentially gigantic common wealth. If the Falklands recognizes citizen ownership of its common wealth and distributes a citizen dividend, each resident can, potentially, get a citizen dividend of half a million US dollars every year.

Oil wealth

Here's the calculation.

"It seems certain that 350 million barrels worth of oil are below the sea bed to the north — and it is believed that at least ten times as much could be found to the south."

That adds up to about 4000 million barrels of oil. At US$100 a barrel, that is $400 billion dollars.

Falkland Islands government is planning a 9 per cent royalty on each barrel. Let's take a round number of 10%. That is $40 billion dollars of common wealth for the Falkland Islanders.

If they put that into a dividend fund, an investment return of 5% will mean $2 billion a year for its population of 3000.

That means a $650,000 citizen dividend for each resident annually.

That puts the fantastic potential Kuwaiti citizen dividend of $2.3 million (over a 80-yr lifetime) far behind.

What's happening?
The people there are expecting lots of money to flow in.
"The islands’ financial secretary, Nicola Granger, has been to Norway to discuss that country’s experience of setting up a sovereign wealth fund — a state-owned fund that would invest all this extra money."

What could stop the citizen dividend?
There are two possibilities.
1. External threat. The Argentina government may not let go of the vast riches, or the UK government may want a share.
2. Citizen ignorance. The Falkland Islanders may make the same mistake that the UK government did with the North Sea oil. The UK government considered that a God's gift to the economy, and the citizens were robbed of their rightful citizen dividend. The Scottish are angry about this. (How black gold was hijacked: North sea oil and the betrayal of Scotland, Dude, where's my North Sea oil money?, Norwegians point the way as 'oil fund millionaires')

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