A crackdown by Denmark on “parallel society” neighbourhoods where the majority of people have a “non-western” background faces being blocked by an EU court.
Judges at the European Court of Justice in Luxembourg were advised on Thursday that Denmark's policy of forcibly redeveloping areas formerly known as “hard ghettos” amounts to “direct discrimination” based on race.
Tenants evicted under the plans – including migrants from Lebanon, Syria and Turkey – are seeking to have them struck down under EU anti-racism laws.
The court's advocate general Tamara Capeta said Denmark's push for integration “seems to have the contrary effect” by stigmatising those with a foreign background because of a belief that they struggle to fit in. Although her written advice is not binding on judges, it is seen as influential when they come to their final verdict.
Denmark's government maintains a list of “parallel society” neighbourhoods in which more than 50 per cent of people are of non-western origin and there are signs of deprivation such as low income, lack of education or drug use. The disputed laws force these areas into a “transformation” – for example by demolishing social housing or selling it to private developers.
Eight of these “transformation areas”, which were officially known as “hard ghettos” until 2021, are currently earmarked for redevelopment across Denmark. They include neighbourhoods in the cities of Odense and Aarhus where more than three-quarters of residents are non-western and most have no education beyond primary school. Several of the tenants in court lived in an area called Mjolnerparken in Copenhagen.
The laws are part of a Danish migration policy that ministers trumpet as one of the strictest in Europe. The government last week celebrated new figures showing only 860 people were granted asylum in Denmark last year, the second-fewest since 1983. “It is crucial for our society and cohesion that we have a low asylum influx so that integration can keep up,” Immigration Minister Kaare Dybvad Bek said.
However, Ms Capeta said Denmark had failed to provide evidence of “parallel societies” or to show that non-western immigrants have particular problems adapting to Danish society. The law in question “seems not only to be based on prejudice, but it also contributes to the perpetuation of that stereotyping and stigmatisation”, she wrote.
The Danish government denies its policy is discriminatory, saying non-western people are such a broad group that nobody is being singled out for their ethnic background. The definition covers European states such as Russia, Albania and Serbia as well as all of Africa, Asia and South America. The list of western countries includes the US, Australia and New Zealand.
About one in six of Denmark's population has a migrant background. People with roots in Turkey, Ukraine, Syria, Iraq and Lebanon are the biggest non-western population groups.
Different treatment
Although Ms Capeta conceded that tenants were not evicted based on their individual ethnic background, she said they were still treated differently “because of the ethnic criterion” applied to their neighbourhood. The housing policy is being challenged by 11 people given eviction notices in Copenhagen, and five others ordered out of a neighbourhood in the town of Slagelse, west of Copenhagen.
“Paradoxically, the Danish legislation that was enacted to help immigrants and their descendants from non-western countries to integrate more easily into Danish society seems to have the opposite effect,” Ms Capeta wrote.
“By perpetuating stigmatisation on ethnic grounds, it makes it more difficult for the members of the group of 'non-western immigrants and their descendants' to find a job, acquire respect and participate on equal footing in Danish society.”
If the European court agrees, it will refer the case back to the Danish justice system with a ruling that the law in question violates EU anti-racism rules. Danish judges could also be asked to consider whether there is “scientific evidence”, rather than just “prevailing social prejudice”, in favour of redeveloping social housing in migrant areas.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Off-roading in the UAE: How to checklist
How to vote
Canadians living in the UAE can register to vote online and be added to the International Register of Electors.
They'll then be sent a special ballot voting kit by mail either to their address, the Consulate General of Canada to the UAE in Dubai or The Embassy of Canada in Abu Dhabi
Registered voters mark the ballot with their choice and must send it back by 6pm Eastern time on October 21 (2am next Friday)
