Hong Kongers departing for London take selfies with relatives and friends at the Hong Kong International Airport in August 2021. EPA
Hong Kongers departing for London take selfies with relatives and friends at the Hong Kong International Airport in August 2021. EPA
Hong Kongers departing for London take selfies with relatives and friends at the Hong Kong International Airport in August 2021. EPA
Hong Kongers departing for London take selfies with relatives and friends at the Hong Kong International Airport in August 2021. EPA


Boris Johnson's immigration policy is more liberal than we think


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July 18, 2022

As Boris Johnson faces the exit door from his stint as British Prime Minister, it is worth noting that his three years in power have literally transformed the faces of the UK.

The Conservative maverick has presided over a very controversial period for migration policy. In some ways, the populist has totally defied the most base instincts of his supporters to trigger a new wave of immigrants.

London is even more of a world city since Mr Johnson came to power. Throughout his premiership, a handful of initiatives sealed a deeper trend. One example is a scheme for Hongkongers holding UK identity documents to come to the country. Another example is last year's Afghan evacuation policy that filled many hotels in the capital at a time when Covid-19 restrictions reduced tourism. Now, something similar is happening with Ukrainians.

Skills have become the basis of the current government's entry regime. There is a policy to allow graduates to stay and work for two years after earning their degrees in the UK. Merit-based work-migration laws have more broadly been streamlined, triggering a rise in applications.

This shift in emphasis on immigration is often overshadowed by other harsher and more tokenistic migration policies. Zero-tolerance rules, for instance, are badly administered or too experimental. A case in point is the scheme to send those deemed to have entered the country illegally to Rwanda, if they cannot be easily deported elsewhere.

UK Prime Minister Boris Johnson departs 10 Downing Street last Wednesday. PA Wire
UK Prime Minister Boris Johnson departs 10 Downing Street last Wednesday. PA Wire
London is even more of a world city since Mr Johnson came to power

That policy resonates so deeply with the base of the Conservative party that each one of the candidates lined up to replace Mr Johnson as Tory leader – and, therefore, UK prime minister – has endorsed it. Every one of them has pledged to keep on defying the courts and the legal system to get it up and running.

These politicians are being fed by focus groups whose research shows that the policy is popular across the Red Wall, a set of traditionally Labour constituencies that the Tories won in the 2019 parliamentary election. In the party's view, it is a palpable demonstration that the government is working to reduce immigration.

Any other issues around migration are, so far, only being paid lip service in the race to replace Mr Johnson. This would suggest that some of the big changes he initiated will stick.

Take the London suburb of Sutton, a quiet dormitory area in the city's south-west. It has been transformed in two years. Schools have advisers to help integrate Cantonese speakers. Estate agents have opened dedicated Chinese branches on its high street. There is a fully fledged church for the new arrivals.

In central London, meanwhile, new restaurants tend to serve African or Indian fusion food.

The Brexit that Mr Johnson fought for ended the right of free movement for all citizens of the EU into the UK. Put bluntly, the biggest pool of people affected by it comprised of white Eastern European blue-collar workers and clerical and service staff.

But the rigid, Australian-style points-based migration system that was promised by many in the campaign to leave the EU in 2016 never came into play. David Frost, the hardliner who was Mr Johnson’s Brexit negotiator, warned last week that the Conservatives must show net migration coming down.

According to researchers, migration ranks second only behind the UK’s cost-of-living crisis as a concern among the Conservative party's 2019 voters. And about three quarters of those surveyed feel that the issue is being managed badly.

Protesters outside the High Court in London for the ruling on Rwanda deportation flights in June 2022. PA Wire
Protesters outside the High Court in London for the ruling on Rwanda deportation flights in June 2022. PA Wire

Mr Johnson is a so-called liberal Leaver, while the majority of the new voters are culturally conservative in a way that he is not.

The attack lines are already forming in think tanks and among political forums. Net migration to the UK this year could be about 200,000, and because of the nature of the influx, the annual cost of supporting new arrivals is pushing $10 billion.

If consultations with local voters is anything to go by, then academics are clearly seeing a vulnerability to emerge from Mr Johnson’s enthusiasm for high and skilled migration. Whether this policy is retained will depend on how strong-willed the new leader is, and what pressures the economic downturn bring to bear.

Widening out the focus of the debate, there is much to be gained from a high-net migration figure. An effort to make the immigration policy more competent, particularly in relation to tackling illegal arrivals, and, yes, deportations as well, would bring far greater dividends to the UK as a whole.

A reforming prime minister would really try to get to grips with that great challenge. If successful, the reputational dividend would be immense, particularly in the wake of Mr Johnson’s legacy.

The UK is in what is known as demographic decline. The rapidly ageing society needs migration to protect long-term economic growth.

The question, then, comes down to whether or not the country, or the supporters of its governing party at least, are happy to sacrifice future prosperity so that the country does not become culturally, ethnically and socially diverse as a result of migration.

Despite his short tenure in power, Mr Johnson has created a legacy that will play out for years to come.

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.”

West Indies v India - Third ODI

India 251-4 (50 overs)
Dhoni (78*), Rahane (72), Jadhav (40)
Cummins (2-56), Bishoo (1-38)
West Indies 158 (38.1 overs)
Mohammed (40), Powell (30), Hope (24)
Ashwin (3-28), Yadav (3-41), Pandya (2-32)

India won by 93 runs

Company profile

Name: The Concept

Founders: Yadhushan Mahendran, Maria Sobh and Muhammad Rijal

Based: Abu Dhabi

Founded: 2017

Number of employees: 7

Sector: Aviation and space industry

Funding: $250,000

Future plans: Looking to raise $1 million investment to boost expansion and develop new products

SPECS
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Updated: July 18, 2022, 3:53 PM