In recent decades, immigration rates have been a considerable asset for many countries around the world. Whether in Europe or Asia, North America or Oceania or even in the Middle East, the flux of foreign talent in various sectors has contributed to economic growth and that of the labour market and the emergence of new sectors. For example, many Middle East countries, like Kuwait and Qatar, can boast a predominant expat population who actively contribute to their economy. Unfortunately, the global health crisis and the economic downturn led to an expat exodus over the past year.
Restore competitiveness
The past year has been challenging for most countries around the world. Still, some countries managed to overcome the economic downturn in recent months. China, for example, recorded an 18.3% GDP (Gross Domestic Product) growth in the first quarter of 2021. Last year, during the same period, China recorded its worst economic performance for the past four decades. But some countries, like the United Arab Emirates, have found another way to boost their economies. Dubai recently launched a new remote work visa that allows foreign professionals to come and live there while working remotely. This means that they are not allowed to join the labour market but can contribute to the economy through spending (leisure, schooling, rent, food, etc.). Many other countries have adopted this concept to boost their economies with foreigners' economic input.
Canada also recognises the significant contribution of immigrants to its economy. Faced with an ageing population and a low fertility rate, the country is looking to retain professionals and international students who have already settled there. With their experience and skills, they are expected to foster economic growth amid the crisis. South Korea is another good example of a country where immigration can make a difference. Foreign talent looks crucial for the development of R&D (Research and Development) and technology, especially AI (Artificial Intelligence), which are likely to become a new economic pillar. So a range of measures has been proposed to attract and retain foreign talent in the long run, including tax benefits.
Expat taxes are another crucial factor for economies around the world. In most cases, people move abroad for better career prospects, high wages and standards of living, etc. But high wages also means high taxes. Expat taxes are usually high, given the attractive expat packages. The higher their annual income, the higher taxes they pay, even if some countries provide tax benefits for the first few years. So, in the long run, economies stand to benefit from immigration.
A stronger labour market
Many countries, such as Canada, New Zealand and Australia, etc., are currently facing a shortage of skills in various sectors. While these countries have a highly qualified workforce, certain sectors, including healthcare, engineering, technology, construction, still find it hard to meet the demand. As we indicated above, ageing populations are another challenge for countries like Canada, which makes global recruitment even more important. The pandemic has clearly slowed down recruitment, but these countries kept their borders open amid the pandemic to address the shortage of skills.
Let us not forget seasonal jobs that, most of the time, cannot be filled locally. Since seasonal low-paid jobs do not require a permanent workforce, they are of no interest to local job seekers. And yet, these sectors do contribute to the economy. In New Zealand, Australia, Canada, and even the UK, there are many seasonal job opportunities in sectors like agriculture, tourism, summer language teaching, etc. Temporary immigration thus helps in filling these positions while ensuring the survival of these sectors.
Help business survive
Over the years, foreign talent has turned out to be a considerable asset for many companies around the world, mainly multinationals. Often, the qualifications and skills required for specific projects are not available locally. So hiring foreign expertise helps them achieve their goals and remain competitive. The pandemic not slowed down global recruitments but also led to financial crises within businesses and institutions. Thousands of foreign professionals either chose to or were compelled to return to their home country for various reasons such as salary and job cuts, poor quality of life and working conditions, or simply to be closer to their families in these hard times.
COVID-19 infection rates and death tolls and the government actions against the pandemic, and the health restrictions on arrival are other crucial factors for those who would like to move abroad. Still, a slow recovery is expected with the reopening of borders and the resumption of flights. Countries worldwide are playing it safe regarding international flights and entry conditions to kickstart their economies.
The role of foreign investment
Whether a business is micro, small, medium or large, it represents a certain investment. Since many economies around the globe rely heavily on foreign investment, it can pave the way to economic recovery. Since the early days of the pandemic, many industries and businesses have come to a standstill. Faced with the economic downturn, a number of countries have defined new strategies to attract foreign investors and entrepreneurs, such as tax incentives and other benefits like special visas, permanent residence, citizenship, etc.
Thailand, for example, is considering a new action plan to boost foreign investment and tourism, which has been seriously affected by the global health crisis. The proposed measures include reduced corporate taxes, revision of property laws for foreign nationals, and benefits for startups. Thailand also recognises the significant contribution of foreign retirees and pensioners to its economy. In fact, most of them receive pensions from abroad, that is, in a foreign currency, and maintain an expat lifestyle, which includes rent, spending, leisure, etc. Many of them also invest in property. Thailand aims at attracting at least one million new foreign retirees over the next few years and generate around $ 38.1 billion each year.
