Millionaires being drawn to UAE
A Feb. 21 report from New World Wealth tracked trends in the geographical distribution of millionaires around the world. One finding is that the UAE is attracting these high earners.
The study found that the Emirates attracted approximately 3,000 of these wealthy individuals in 2015 and over 5,000 migrated into the country in 2016. While the UAE is seen as more of a wealth magnet than its neighbors, other GCC states also attracted a large share of the world’s wealthy elite, for example, Qatar gained around 2,000 millionaires that year.
One reason for the influx, according to researchers, was a net loss of approximately 6,000 millionaires in neighboring Turkey, where elites fled political turmoil.
In addition, there are the positives that many mobile jet-setters see in the UAE, especially in modern, cosmopolitan hubs like Dubai and Abu Dhabi.
“The UAE’s low tax rates and high safety levels make it particularly attractive to high-net-worth individuals,” Andrew Amoils, New World Wealth analyst, said in a press statement. “It also boasts several fast growing sectors including financial services, technology, health care and media.”
Some also claim that geopolitical relevance and societal progressivism make a difference – the study cited Australia as another wealth magnet, with an estimated 11,000 millionaires moving in during 2016. The U.S. and the U.K. lost high-net worth individuals during that time, researchers said.
What does it mean to have a modern Islamic nation with so many mega-rich residents?
“Islam does not discourage people from getting rich,” Hammad Ahmad, imam of the Ahmadiyya Muslim Community, recently told Gulf News Journal. “But Islam does look down on amassing wealth and sitting on it.”
He said that Islamic traditions like alms-giving and a tax on dormant wealth are meant to enforce these religious and cultural concepts, although some of them are not currently practiced in many Islamic nations.
Ahmad said although the practice of requiring a 2.5 percent tax on wealth has been a feature of the Islamic caliphate in times gone by, it is not currently practiced in today’s GCC nations, at least, not in a consistent and universal way.
“It depends on the political and economic setup of the countries in question.” Ahmad said.
However, he added, the general idea is that the state is responsible for taking in the money from the rich and redistributing it to the poor.
The idea that millionaires would flock to a nation where the pervading culture promotes wealth redistribution seems to be an inherent repudiation of the idea that market economics is the only force that the rich care about. In today’s world, it does not seem as if political catering inherently attracts high net worth people to a country.
Excessive wealth, Ahmad said, is harmful. When money does not change hands, it does not feed the economy.
“It harms people. It harms the economy.” Ahmad said.