The release of the latest Henley Passport Index details the UAE as the Covid-19 winner.
The study, which ranks the world’s passports according to the number of destinations their holders can access without obtaining a prior visa, is compiled using official data from the International Air Transport Association.
Over the past two years, as the world has battled the pandemic, the UAE passport has remained strong.
In the latest ranking, the UAE retains its position at No 15, the highest spot it has achieved since the launch of the index in 2006. It shares the ranking with Cyprus.
Emirati travellers are now able to visit 176 countries around the world on either a visa-free or visa-on-arrival basis. The index shows the UAE is also the biggest climber of the last decade, having gained 49 places from a ranking of No 64 in 2012.
The UAE is also the only Arab nation to rank in the top 20.
World's most powerful passports lack freedom to travel
Elsewhere, there was only minor changes in the top 10 most powerful passports compared to the last ranking, which was released in April.
Japan retained its top spot, with a record-high visa-free or visa-on-arrival score of 193.
Singapore slipped to joint second place alongside South Korea, with passport holders from both countries able to access 192 destinations around the world visa-free.
Despite leading the index, citizens of these three nations are currently the most restricted and reluctant to enjoy their travel freedom, with international passenger demand for the Asia-Pacific region reaching only 17 per cent of pre-Covid levels, according to Iata’s latest statistics.
The figure lags behind the global trend where destinations in Europe and North America have recovered to around 60 per cent of pre-crisis travel mobility levels.
“By next year, many markets should see traffic reach or exceed pre-pandemic levels, while we expect this to be the case for the industry as a whole in 2024,” said Marie Owens Thomsen, chief economist at Iata.
EU countries dominate, India and South Africa recover
EU member states dominate the rest of the top 10, with Germany and Spain ranking in third place, followed by Finland, Italy, and Luxembourg in joint fourth.
Denmark, Austria, the Netherlands, and Sweden share fifth place while the UK and the US have both dropped down a rank to sixth and seventh, respectively.
Other countries are showing signs of recovering from pandemic-related restrictions on travel. Indian passport holders now have roughly the same travel freedom as they did pre-pandemic, with unrestricted access to 57 destinations around the world, compared to just 23 destinations in 2020.
South African passport holders who were restricted to just 46 destinations at the height of the Omicron wave in 2021, have unrestricted access to 95 destinations around the world, close to the nation's pre-pandemic passport score of 105.
Afghanistan remains at the bottom of the index, with its nationals only able to access 27 destinations worldwide visa-free.
Ukraine on the up, Russia increasingly isolated
The latest index also highlights the impact the current conflict in Ukraine is having on travel freedom and mobility.
Russian passport holders are more cut off from the rest of the world because of sanctions, travel bans, and airspace closures.
The Russian passport slips down to No 50 on the index, with a visa-free or visa-free on arrival score of 119. Airspace closures in several EU member nations, Australia, Canada, Japan, New Zealand, South Korea, the US, and the UK effectively means Russian citizens are barred from travelling throughout much of the world.
Ukraine’s passport is ranked at No 35 on the index, with holders able to access 144 destinations around the world without needing a visa in advance, a record high for the country. And, with the nation now having EU candidate status — the first step towards EU membership — travel freedom for Ukrainian passport holders looks likely to increase further in the coming years.
“It’s an understatement to say that we are living through a particularly turbulent time worldwide, with the pandemic still casting a long shadow and newer developments such as war, inflation, political instability and incidents of violence increasingly dominating the headlines,” said Stephen Klimczuk-Massion, fellow at the University of Oxford's Said Business School and member of the advisory committee of the Andan Foundation.
“In this context, a passport is more than ever a calling card, which, depending on which passport you carry and where you are going, will have an impact on the kind of welcome you will receive, where you can go and how safe you will be when you get there.”
The most powerful passports in the world
1. Japan
2. Singapore / South Korea
3. Germany / Spain
4. Finland / Italy / Luxembourg
5. Denmark / Austria / Netherlands / Sweden
6. France / Ireland / Portugal / the UK
7. Belgium / New Zealand / Norway / Switzerland / the US
8. Australia / Canada / Czech Republic / Greece / Malta
9. Hungary
10. Lithuania / Poland / Slovakia
11. Estonia / Latvia / Slovenia
12. Iceland
13. Malaysia
14. Lichtenstein
15. The UAE / Cyprus
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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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