The rich want to live in the Anglosphere

From The Millionaires Are Fleeing. Maybe You Should, Too. by Ruchir Sharma. Both interesting and frustrating.

When a country begins to fall into economic and political difficulty, wealthy people are often the first to ship their money to safer havens abroad. The rich don’t always emigrate along with their money, but when they do, it is an even more telling sign of trouble.

Since 2013, New World Wealth, a research outfit based in South Africa, has been tracking millionaire migrations by culling property records, visa programs, news media reports and information from travel agents and others who cater to the wealthy. In a global population of 15 million people each worth more than $1 million in net assets, nearly 100,000 changed their country of residence last year.

In most countries it is fair to assume that any millionaire exodus is composed mainly of locals, and not foreign investors, because the wealthy classes will be dominated by citizens or longtime residents. In 2017, the largest exoduses came out of Turkey (where a stunning 12 percent of the millionaire population emigrated) and Venezuela. As if on cue, the Turkish lira is now in a free fall. There were also significant migrations out of India under the tightening grip of its overzealous tax authorities, and from Britain under the cloud of Brexit.

A lot of interesting information.

But it is often incompletely presented and the arguments seem often to serve a priori assumptions over actual facts.

Equally surprising was the lack of change in the United States, where the arrival of a billionaire president did not seem to attract or repel millionaires. A net total of 9,000 millionaires migrated to the United States last year, but they represent a drop in the ocean of five million American millionaires.

Nine percent of the global millionaires leaving their own country, moved to the US. Just as they seem to do year in and year out. That seems to be a ringing endorsement of the US. Sharma (and the original research) wants to make some points about safety and Trump and healthcare but clearly none of those are real issues in that the inflow remains the same.

Was there another country which attracted more millionaires? Yes, just one. Australia attracted ten thousand millionaires. Far more consequential for them as they are that much smaller a country. And it makes sense in that Australia has long been a bolt hole for regional millionaires concerned about the stability of their home country.

The US and Australia are in a league of their own. All the countries with net inflows of millionaires receive fewer than half as many.

It is worth noting, of the nine countries with a net inflow of millionaires (and, as it happens, zero outflow of millionaires), four are the classically liberal bastions of the Anglosphere: US, Canada and Australia and New Zealand. Of the other five, three are traditional banking secrecy countries (UAE, Switzerland, and select countries in the Caribbean). Israel and Singapore round out the list of nine.

It remains notable to me, though, that the US is such a major draw for global millionaires.

With inflows, you must have outflows. Is there any pattern to the countries with large outflows? Of the eleven with the worst outflows, nine of them are low trust and/or Islamic and/or totalitarian/dictatorships and/or just plain unstable (China, India, Turkey, Russia, Indonesia, Saudi Arabia, Brazil, Nigeria, and Venezuela.) The first four are suffering especially large outflows.

There are two other countries with net outflows. Both countries gained 1,000 millionaires each and both lost 5,000. Britain has traditionally been a net recipient of millionaires but not this year; probably due to Brexit, terrorism, and taxes. France probably due to . . . well to France having long been inhospitable to the wealthy.