If you spend your time looking at the media you would think that the World is getting more and more dangerous. The truth funnily enough is the opposite, the World has never been safer, but don’t let facts get in the way of a good scare story. Let’s look at how Spain benefits.
However, there are many countries having problems at the moment and Spain is benefitting from problems elsewhere both perceived and actual. Let’s take a look at how.
Firstly, the background. A couple of years ago Spain put in place the Golden Visa to attract foreign, non EU, residents into the country. The limit was set at 500,000 Euros investment initially in property or more in the case of government bonds. To begin with it was a bit of a disaster, just 87 visas granted in the first six months This was because it was unclear if the investment was for each member of a family, whether it had to be in just one property etc… However the update of the law made it clear that dependent relatives and family were included in the deal, you could spread your investment over various properties and also you could work here, and this was the clincher because in the initial law although you could live here you had no right to work here meaning many people couldn’t take advantage of the law, they needed an income of course. Allied to the Entrepreneur’s Visa the options look good for people wanting to get out of some scary situations around the World.
So how is Spain benefitting from the problems in the World, perceived or otherwise? Which countries are providing flows of new immigrants coming into Spain and why?
Record numbers of tourists visited Spain in 2014 and those numbers have been knocked out of the ballpark by the 2015 figures even though the year has not yet ended. Spain has benefitted from problems in Egypt, Tunisia, Morocco, Greece and its Islands and Cyprus (The banking crash and haircut for investors included). Equally tensions between Russia and Ukraine have meant the Black Sea is out of bounds for many Russians so they are discovering the Mediterranean coast.
The weakening of the Euro against a basket of currencies over the last few years has meant an increase in tourism and investment from countries that don’t have the Euro such as the UK, Sweden, Switzerland and the United States. This is true at a personal and institutional level. Also there has been a huge increase in investment from Russia despite the precipitous fall of the Rouble against all currencies as capital flight from Putin is huge.
The Arab Spring
The Arab Spring was a movement to get more democracy into certain Arab countries, North Africa, Egypt and Iran among others. Despite the hopes and expectations of the people it mostly caused a worsening situation in those countries after the dictators were thrown out, replaced or killed or in Iran’s case a crackdown on social media. The vacuum in power that was left was mostly filled by chaos. Libya, for example, now is an absolute mess and we are seeing a large number of enquiries from Libyans desperate t get their money out of the country.
The Oil Price
Oil prices being so low and falling means that many cash rich oil and drilling workers and engineers have been laid off and they are looking at safe havens for themselves that offer safety and good value for money. As they are mostly paid in dollars and the dollar is so strong against the Euro we are seeing many of them resettling in Spain at least temporarily.
The low oil price has also meant that Petrol and transport costs have fallen meaning people driving in Spain see it as cheaper and also the transport sector has reduced its costs making it more competitive economically too.
Attacks in France, Tunisia, Egypt and Turkey have meant that Spain is perceived as a safer haven than certain other countries. I fully expect that Spain is a target for the terrorists the same as other countries but the attacks in Madrid of 2004 have largely been forgotten as more recent events focus the World’s attention. So far the Spanish police are doing a good job managing to thwart supposed planned attacks but that may not last of course.
There are political problems in many areas and insecurity in those countries with political problems is forcing many people to leave. Prime areas where people are coming from into Spain because of this over the last few years have been South Africa, Egypt, Venezuela and even the United States. (Believe it or not we have many clients from the United States because they do not feel safe in their country or are sickened by the reactionary politics of certain sectors and the possibility of nutjobs like Donald Trump or most of the Republican nominees getting power.)
South Africa is getting more and more dangerous and the value of the Rand is falling massively. The difficulty for many South Africans is actually disinvesting in the country and if they manage it to then get their funds out of the country.
Spain has an inept and immensely corrupt government but hopefully that will end in a week’s time even if it is by a coalition of everyone but the PP. Spain may even be considered dangerous by some but crime figures are low and getting lower and the perception is that you are safe on the streets in Spain even late at night.
Spain is in a good position to continue benefitting from problems elsewhere, it continues to be a great place to live and also a relatively cheap place to live with a great quality of life and a perception of safety. Until any of those factors change Spain will continue to do well from all the problems in the World.
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