A little more than a month into 2024 and it feels as if we have been holding our collective breath for weeks. It feels as if we are waiting to see how the many pressures – disruptions to Red Sea shipping, the risk of conflict spilling over from Gaza to Lebanon, Iraq, Iran and other parts of the region, and the rapid proliferation of artificial intelligence technology – will shape global trade and economic growth this year.
Observers are naturally watching the traditional great powers – the US, China and Russia – for indications of how such forces will be managed. To an extent, the American presidential election in November could have the most bearing on all of the above, as the dwindling field of candidates fight to dominate the minds of voters seemingly most concerned about how increased levels of migration over their southern borders will be managed.
The growing influx of migrants is, like climate change, not a single-country issue. These are examples of our 21st-century “Butterfly effect” and speak to the urgency with which we need to come up with multifaceted solutions.
Movement of people – legal and illegal – across regions and continents is nothing new, of course. The reasons that drive them to leave home are almost unchanged across history. What is different now is the ability of authorities, experts and the media to view this movement happening in real time and wherever it might be visible in the world.
The knee-jerk response to this migration trend is to try to stop it. In the UK, the US and Europe, this has proved to be an unsuccessful approach. Yet it is unlikely that policymakers will stop trying, given the political realities of being accused of supporting migration.
One consequence of an anti-migration atmosphere in the West is that it dampens the movement of wealthier people while doing little to deter those without those financial means, who have little choice but to seek sanctuary so far from home in order to find security, stability and economic opportunity.
A recent report highlighted how the citizens of the Brics+ grouping of nations, for example, have significantly less economic mobility than those residing in the most advanced economies. That is despite Brics – originally Brazil, Russia, India, China and South Africa – together having more purchasing power than the G7 and the rising number of wealthy individuals residing within those five countries.
According to the Henley Passport Index, passport holders from Brics’s original member countries can access, visa-free, just 21 per cent of the world, on average, compared to those from G7 nations who combined can access more than 80 per cent without requiring a prior visa.
Saudi Arabia along with the UAE, Egypt, Iran and Ethiopia joined Brics on January 1, doubling its membership to 10. This has boosted the wealth that it contains. Dubai hosts 72,500 millionaires, of whom 212 are centi-millionaires and 15 are billionaires, while Abu Dhabi is home to 22,700 resident millionaires, including 68 centi-millionaires and five billionaires.
Dubai has been ranked the third-wealthiest city in Brics+, while Abu Dhabi placed 10th on the list, according to the report by Henley & Partners and New World Wealth. Five Chinese cities figured among the 10 wealthiest metropolises in the grouping, with the capital Beijing ranked the wealthiest Brics+ city, home to 125,600 millionaires, including 347 centi-millionaires and 42 billionaires, the research showed.
Shanghai ranked second with 123,400 ultra-wealthy residents, while Mumbai and Shenzhen round out the top five list.
The result of this strange contradiction regarding the lower mobility of Brics+ citizens will be that wealthier nations will also lose investment opportunities that they might otherwise have obtained. When people put their money in a country, regardless of the project and sector, they like to be able to easily visit and see first-hand how that funding is being put to work. If they cannot or are discouraged from doing so, they will keep their money elsewhere. In an era of high interest rates, it is no easy thing to make up the investment gap that could emerge as a result of these trends.
Dominic Volek, group head of private clients at Henley & Partners, says that the extended Brics community will probably create new opportunities for themselves going forward at the expense of other regions. It’s important to note that over the next 10 years, private wealth is projected to grow very quickly in India, Saudi Arabia, the UAE, China, Ethiopia, South Africa and Egypt.
Yet wealth is only one side of the argument. To meet the challenge of rising levels of economic and political migration, there will have to be a total focus on prosperity. This is far more than wealth; it is when all people have the opportunity and freedom to thrive, according to the Legatum Prosperity Index. For prosperity to be sustained and inclusive – which it must be to attract investment and talent – it should conserve the environment, emphasise well-being of people, and prioritise culture.
The Legatum ranking annually puts northern European nations at the top of their list. Such data only adds to the belief that to find prosperity, one would do best to seek it out there rather than in other regions. Yet it is clear that immigrants are not encouraged to go there any more under all but the narrowest circumstances.
But a vacuum must be filled, and the cold shoulder being offered in the West could ultimately spur a greater emphasis on prosperity that is led by the emerging economies.
