Over the last year, there has been a palpable spike in isolationism and border control policies, from Brexit Britain to Donald Trump’s US. With world leaders gathering in Davos to discuss globalization’s deepening impact, it is no surprise to see that the subject of migration and global mobility is firmly on the agenda.
However, despite the seemingly retrograde tendency towards protectionism in some parts of the world, the lessons from the “2019 Henley Passport Index and Global Mobility Report” point decisively toward the fact that global travel freedom is actually on the rise.
The report uses research and historical data to explore regional and global mobility trends, and, significantly, to reveal the links between travel freedom, growth, and democracy.
In the Middle East, the subject of travel freedom is certainly a hot topic, with the UAE itself the number one riser on the Henley Passport Index, a ranking all of the world’s passports in terms of the number of countries and territories to which they grant visa-free access.
As of the beginning of this year, the UAE passport was the most powerful in the region, with its citizens able to access 164 destinations without having to obtain a visa before travel.
This expansive attitude to mobility has no doubt contributed to the global reputation of the UAE, as one of the most open economies in the world, allowing a rich flow of people from all levels of society and all over the world to pass through its borders and contribute to its success.
A mere glance at the number of expats living in the UAE (85 per cent of the population) is testament to this fact.
Dubai is probably the most famous contemporary example of how a globalised approach to development can ignite an economy and provide citizens with opportunities to both better themselves and their societies — indeed it is perhaps this that most sets the UAE apart from other countries in the region and abroad.
Global mobility divide
However, it is also clear that despite the important progress that has been made in overall global mobility in the Middle East and elsewhere, there remains a significant “global mobility divide”, with holders of certain nations’ passport enjoying much greater travel freedom than others.
For example, in 2018 the average European could travel to approximately 163 destinations without a visa, while the average individual from Africa could travel to only about 61 destinations.
The general increase of global travel freedom should therefore not eclipse the fact that some passports have become exceptionally powerful, while others remain extraordinarily weak.
It is this disparity that the investment migration industry seeks to address.
There are currently an estimated 18.2 million high net worth individuals on the planet (defined as those with assets of at least $1 million), and their collective wealth has now surpassed the $70 trillion mark. That number also continues to grow and is projected to exceed $100 trillion by 2025.
However, tethered to weak passports, many of these high-net-worth individuals (HNWI) find themselves beholden to jurisdictions that restrict their movement, limit their residence options, and hamper the opportunities available to themselves and their families.
Through investment migration, the movement of these HNWI to alternative receptive economies can provide tangible benefits for the host countries they move to.
Nearly half of the 17 countries that saw the biggest percentage increases in wealth from 2016 to 2017 were assisted by inflows of wealthy people.
In Europe, the most successful citizenship-by-investment (CBI) programme is that of Malta, which has seen an inflow of 404 million euros for its posterity scheme and 174 million euros for its consolidated fund since 2014.
Four years after the launch of the Malta Individual Investor Programme (IIP), Malta had one of the highest GDP growth rates — and one of the lowest unemployment rates — of any EU member-state.
Elsewhere, the Portuguese golden visa programme raised 77 million euros in foreign direct investment from 126 investors in November 2018, up 30 per cent year-on-year.
The programme has raised about 4.2 billion euros from 6,813 investors. Such figures are significant when one considers the effect such liquidity has in alleviating a national deficit.
In fact, well managed residence- and citizenship-by-investment programmes have the unique capacity to transform a sovereign debt into sovereign equity.
Citizens by investment
One of the most exciting new CBI programmes to emerge in Europe last year was the Moldova Citizenship by Investment (MCBI), which, in exchange for a minimum financial contribution of 100,000 euros and subject to a stringent vetting and due diligence process, offers applicants and their families full citizenship rights that are transferable without restrictions to future generations.
Applicants also gain a passport that facilitates visa-free or visa-on-arrival access to 122 destinations, including all the countries in Europe’s Schengen Area as well as Russia and Turkey.
All things considered, HNWI living in the UAE are optimally placed to take advantage of CBI options that give them permanent access to Europe, especially when the opportunities to invest just keep on expanding.
It stands to reason that with ever more HNWIs contributing to the global economy, governments should work towards a more open approach to migration.
Furthermore, with more affluent entrepreneurs and skilled individuals looking for greater international opportunities that provide security, stability, and travel freedom, global leaders look set to continue embracing CBI as a driver of non-debt bearing liquidity for sovereign states, driving new levels of fiscal autonomy by escaping the downside of sovereign debt and creating opportunities for society at every level.
Andreas Keller is Managing Partner Middle East, Henley & Partners.