Southeast Asia as Retirement Haven

Outside all the easy money inspired yield chasing actions that has led to various bubbles around the world, here is one potential bullish theme for Southeast Asia: Retirement Haven 

Analyst Martin Spring writes (link not available)

Southeast Asian countries have become magnets for retirees from other parts of the world who want to spend their final years in the comfort of year-round sunny climates, friendly people who treat the elderly well, and inexpensive “colonial” lifestyles.

Two of them – Malaysia and Thailand – are listed in the top ten in the latest survey of best countries in the world for North Americans to retire to...

Thailand is now home to 45,000 foreigners who live there permanently on retirement visas. They cost little, but have to be renewed annually. To qualify you must be at least 55 years old, agree to do no work, and meet a financial requirement.

You must either prove that you have a monthly income of 65,000 baht (that’s just over $2,000), or have at least 800,000 ($25,000) in a local bank.

Although Thais’ fluency in the English language is less than desirable, that has never been a problem for us in the seven years we’ve lived here. The Thais make up for it with their ever-willing desire to be helpful – greng jai (concern for the contentment of others) being such a dominating force in their social behaviour.

Almost everything required by retirees is inexpensive, sometimes really cheap, compared to Europe, North America, even my own South Africa. Domestic help is abundant, willing and friendly – no more housework now it’s become increasingly difficult to do yourself. Medical and dental services are world-class and a remarkable bargain, with consultants fluent in English and often with advanced US/European/Australian qualifications.

Malaysia has become home to 23,000 foreign retirees under its programme designed to attract them. Its visa offer is far better than Thailand’s – once granted, it’s valid for ten years.

However, financial qualifications are much higher – you have to prove a retirement income of 10,000 ringgit (more than $3,000), and have at least 350,000 ($110,000) in a local bank.

For retirees, life in Malaysia has the same kind of advantages as in Thailand – warm climate, low costs, friendly people, world-class medical services – with the added advantages that English is widely spoken and the local language much easier to learn.

It’s topped the list as the most popular “long-stay” destination for Japanese retirees for the past six years.

Philippines was the first Asian country to welcome foreign “Silver” migrants, and now has about 23,000 who have qualified under the nation’s Special Resident Retiree visa. Many thousands more qualify for residence under other visas, or have married locals.

Financial requirements for the retiree visa are a pension of at least $1,000 a month, and a cash deposit of $50,000 in a government-designated bank.

The Philippines mainly attracts Asian retirees, from China, South Korea and Taiwan. The country is also a particular favourite of Japanese retirees as it’s only a four-hour flight to Japan when they wish to return to visit family or receive medical treatment (which for them is both free and high-quality in Japan).

Bali – a province of Indonesia – has attracted 10,000 foreigners over the past five years who have settled there permanently.

It offers retirement visas for those aged at least 55 who can prove a minimum income of $1,500 a month and rent an apartment costing at least $500 a month. They must also have medical insurance, employ at least one local such as a domestic, and cannot work or own a business.

The attractions are similar to those found in other favoured Southeast Asian long-stay destinations, except for inferior medical services.

Continued financial repression (combined with growing police state) in developed economies may force productive segments of society to emigrate. One example is the US where Americans renouncing their citizenship has reached new record highs. Southeast Asia could serve magnet for such capital flight aside from retirement flows.

But attracting overseas retirees or migrants will also depend on many factors. The Philippines government would need to ease capital controls for instance. They could also liberalize on foreign ownership restrictions to allow retirees and their families options to have wider investment options.

Nonetheless ASEAN as retirement haven hardly serves as a free pass for bubble blowing economics. Blowing bubbles will easily eclipse any positive feedback from retirement flows. Worst, possible adverse political reactions in the face of bubble blowups may even scare retirees.  Today's recent EM outflows are symptoms of hissing bubbles.

ASEAN governments will have to adapt real 'market economy' reforms and not depend on bubble blowing policies to prop up "growth" where the latter has been more about statistics. 

ASEAN would need to rely on substance rather than form. A greater degree of market economy will attract prospective investors, migrants and retirees. This will even allow the domestic informal economy to migrate into the formal economy therefore increasing efficiency of economic coordination thus leading to real growth.

Quote of the Day: Free Migration would be Great for the World

If First World governments simply respected everyone’s right to accept job offers from willing employers, most of the world’s poor wouldn’t need charity. They could take care of themselves. Any able-bodied person living in poverty would be free to sell his labor to the highest bidder in the world. Instead of paying years of income to coyotes, the global poor could migrate for the cost of a bus or boat ticket. Instead of crossing the border in fear to compete for illegal jobs, the global poor could cross the border openly to compete for any job they’re qualified to do.

Wouldn’t this simply drive First World wages down to Third World levels? No. Basic economics tells us that trade barriers don’t just redistribute wealth; they destroy wealth. Confining able-bodied workers to the Third World is like confining agriculture to Antarctica. Standard economic estimates say that open borders would roughly double world output. While trade liberalization never benefits absolutely everyone, free migration would be great for the world and great for the world’s poor.

(italics original)

This is from Professor Bryan Caplan in a debate over “negative and positive rights” at the Cato Unbound

Southern Europeans Flee to Germany

The crisis affected European nations or the PIGS (Portugal Italy Greece and Spain) have not just been enduring capital flight from fears of prospective devaluation by a forced exit, but likewise have seen a mass exodus from residents.

As I earlier pointed out, many European emigrants seem to have opted for emerging markets, meanwhile fresh reports tells us that many others have been flocking into Germany at a steepening rate.

From the Wall Street Journal

The influx of Southern Europeans into Germany has gathered pace in recent months, as a growing number of Greeks, Spaniards and Portuguese ventured north to escape deepening recession and growing social tensions.

The biggest increase came from Greece. The number of Greeks moving to Germany jumped 78% in the first half of 2012 from a year earlier, Germany's statistics office said.

In all, more than 16,000 people moved to Germany from Greece between January and June, an acceleration of a trend that began in 2010 after the Greek crisis began. The number of immigrants to Germany from Spain and Portugal was up by 53% for each country.

The trend bodes ill for countries on Europe's southern periphery at a time of worsening economic malaise. Many of those leaving are young professionals with valuable skills. Their departures could have long-term consequences for countries such as Greece and Portugal as they struggle to recover.

"There are absolutely no jobs here—that's the main reason why people move away," said Charalampos Koutalakis, a politics professor at the University of Athens.

Jobs are symptoms of a deeper systemic malaise.

On the one hand, the productive class have been finding diminished economic opportunities from which to go about or to work on, given the political trends of deepening financial and economic repression that has led to the asphyxiation of the business and entrepreneur class

Such includes the risks of the erosion individual savings which has prompted for capital flight—again from the perceived risk of more inflationist policies, the risks of an implosion of the banking system and a wider confiscatory tax dragnet for these insolvent and desperate nations.

On the other hand, the parasitical class have been fighting to retain their entitlements which have been bringing about greater political risks.

Picture from Spiegel Online

Strikes and demonstrations in protest of so-called “austerity” have only been intensifying social frictions that have sparked political violence. This has only worsened the investment climate that has brought Europe down to its knees through a double dip recession.

"The problem with socialism is that eventually you run out of other people's money [to spend]" remarked former UK’s PM Margaret Thatcher. This has been the zeitgeist of the social feud in Europe as welfare and bureaucrats bitterly contest with the ruling political class and the privileged and protected (crony) bankers on how to divvy up the residual spoils from an unsustainable system of mandated plunder.

And for the citizens who refuses to partake of political of the struggles, and who may have chosen to stay or who may have been trapped by the inability to migrate, the desire to normalize life have led to a booming informal economy which now averages 17.3% of the euro GDP or EUR 1.5 trillion.

As I have been pointing out, the informal economy seems like guerrilla capitalism operating under business or investment hostile or adverse political landscape

Bottom line: People respond to developing political trends or political risks. A political trend towards economic repression leads to violence, to capital flight, to the informal economy and to emigration.

Will French Politics Swing from Socialism to Fascism?

Far right Marine Le Pen’s strong showing at the recent Presidential runoff in France may have opened the door for politics of the extreme right.

Writes historian Eric Margolis at the Lewrockwell.com

Talk about déjà vu. Such a sweeping change would return France to its pre-war political landscape, when hard Left and hard Right were locked in bitter confrontation. Marine Le Pen could well emerge as the angry voice of many Europeans – a prospect that causes shudders across conservative-ruled Europe.

She could also prove the nemesis of the European Union. Le Pen has vowed to oppose austerity pacts, quit the Euro, restore the franc, and follow economic mercantilism. Her anti-EU, anti-free trade policies are attracting many people across Europe and even in Russia.

Fortunately, Francois Holland could prove a counter-balance to the ascendant Right. He is a moderate, cautious centrist politician given to pragmatism rather than ideology. His popularity and image of geniality and caring about people will help him withstand the forces of both Left and Right trying to pull him in different directions.

Even so, Marine Le Pen and her aggressive rightists are likely to become an ever-increasing threat to the French Republic as economic conditions worsen. It seems only a matter of time before fascism rears its head again in Spain, Italy, and Portugal. Greece is already on the way. Failure to implement austerity plans will bring economic convulsions and with them the bully boys in black

Mr. Francois Holland's victory has been negative enough for domestic entrepreneurs. Many of whom have reportedly been looking for refuge overseas from the prospects of punitive tax increases, if not from asset forfeitures, by the incoming socialist government, whom has openly declared war against the wealthy.

Yet if the prognosis of Mr. Margolis becomes a reality, then the rise of fascism (based on economic nationalism or mercantilism) elevates the risk of regional war.

As the great Ludwig von Mises once admonished,

What generates war is the economic philosophy almost universally espoused today by governments and political parties. As this philosophy sees it, there prevail within the unhampered market economy irreconcilable conflicts between the interests of various nations. Free trade harms a nation; it brings about impoverishment. It is the duty of government to prevent the evils of free trade by trade barriers. We may, for the sake of argument, disregard the fact that protectionism also hurts the interests of the nations which resort to it. But there can be no doubt that protectionism aims at damaging the interests of foreign peoples and really does damage them. It is an illusion to assume that those injured will tolerate other nations' protectionism if they believe that they are strong enough to brush it away by the use of arms. The philosophy of protectionism is a philosophy of war. The wars of our age are not at variance with popular economic doctrines; they are, on the contrary, the inescapable result of a consistent application of these doctrines.

The current trend of French politics seems locked into a wretched choice between the proverbial devil and the deep blue sea. Beautiful France may not be as beautiful as she is today in the future.

Democracy, as the great libertarian H.L. Mencken said, is the theory that the common people know what they want, and deserve to get it good and hard.

More on US Exodus: Facebook co-founder Gives up US citizenship

Wow. Wealthy Americans giving up on their citizenship seems to be snowballing.

Now we’ve got a high profile case; one of Facebook’s founders has reportedly renounced his citizenship before the company’s IPO.

From Bloomberg,

Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.

Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin’s stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. His holdings aren’t listed in Facebook’s regulatory filings.

Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dorm and stand to reap billions of dollars after the world’s largest social network holds its IPO.

“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement.

Saverin’s name is on a list of people who chose to renounce citizenship as of April 30, published by the Internal Revenue Service. Saverin renounced his U.S. citizenship “around September” of last year, according to his spokesman.

Singapore doesn’t have a capital gains tax. It does tax income earned in that nation, as well as “certain foreign- sourced income,” according to a government website on tax policies there.

Exit Tax

Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don’t sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school. For tax purposes, the IRS treats the stock as if it has been sold.

Renouncing your citizenship well in advance of an IPO is “a very smart idea,” from a tax standpoint, said Avi-Yonah. “Once it’s public you can’t fool around with the value.”

The tax bill from Facebook’s IPO, I believe, could be just one issue seen by the media.

Future taxes and civil liberties, I think, could be of the more important unnoticed concern.

Of course, America’s loss, in the case of Mr Saverin, should likely benefit Singapore, which is another sign of wealth convergence or productive capital moving to Asia and emerging markets. Another wow, the billionaire is only 30 years old (signs of how technology has been reshaping industries).

Unless the political trend towards repressiveness in the US reverses, there will be more cases of exiting wealthy Americans.

And speaking of taxes, globalization and the information age seems to have conspired to create opportunities for technology companies to use legal loopholes to arbitrage away taxes through overseas corporate vehicles.

From the New York Times

The growing digital economy presents a conundrum for lawmakers overseeing corporate taxation: although technology is now one of the nation’s largest and most valued industries, many tech companies are among the least taxed, according to government and corporate data. Over the last two years, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S.& P. companies’. (Cash taxes may include payments for multiple years.)

Even among tech companies, Apple’s rates are low. And while the company has remade industries, ignited economic growth and delighted customers, it has also devised corporate strategies that take advantage of gaps in the tax code, according to former executives who helped create those strategies.

Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.

So class warfare politicians appear to be increasingly caught in the bind of economic reality. Raise taxes, capital flees.

The Disadvantage of having an American Citizenship

The US government seems to be applying a pincer movement—or a military maneuver where the flanks of the opponent are attacked simultaneously in a pinching motion after the opponent has advanced towards the center of an army which is responding by moving its outside forces to the enemy's flanks, in order to surround it (Wikipedia.org)—to its own citizens, by imposing repressive tax laws that restricts capital movements outside the US.

Now even wealth management firms are advocating wealthy Americans to FLEE the US.

From Bloomberg,

Go away, American millionaires.

That’s what some of the world’s largest wealth-management firms are saying ahead of Washington’s implementation of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts. HSBC Holdings Plc (HSBA), Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. (DBS) all say they have turned away business.

“I don’t open U.S. accounts, period,” said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory attitudes toward U.S. clients as “Draconian.”

The 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. It means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which could affect their ability to generate returns.

“In the long run, if Americans have less and less opportunities to invest overseas, it would be a disadvantage,” Marc Faber, the fund manager and publisher of the Gloom, Boom and Doom report, said last month in Singapore.

The almost 400 pages of proposed rules issued by the U.S. Internal Revenue Service in February create “unnecessary burdens and costs,” the Institute of International Bankers and the European Banking Federation said in an April 30 letter to the IRS, one of more than 200 submitted to the agency. The IRS plans to hold a hearing May 15 and could amend how and when some aspects of the rules are implemented. It can’t rescind the law.

Obviously the Obama administration’s ploy has been to coercively capture resources of Americans through more policies of financial repression channeled through inflationism (negative real rates and QE), taxes, bank regulations, anti money laundering laws and capital controls

More from the same article…

“Bank accounts, investment accounts, mortgages and insurance policies are being refused to American clients, and those with accounts are seeing them closed or have been threatened with closure,” Marylouise Serrato, executive director of American Citizens Abroad, a Geneva-based organization, wrote in an e-mail.

U.S. citizens who live in countries that aren’t served by U.S. banks may find themselves unable to bank at all, and implementation of the law in its current form could cause collateral damage to American businesses abroad, she said.

“Americans either will not be allowed to enter into international partnerships or live and work overseas, and will be replaced by foreign nationals who do not have these limitations,” Serrato wrote. “The extensive reporting requirements of Fatca will be destructive to those who wish to do business internationally as well as to those Americans who are legitimately living and working overseas.”…

While that may be easy for Americans in Singapore, those who live elsewhere face obstacles. Before Fatca, U.S. citizens in Bangkok or Manila could find investment opportunities through non-U.S. banks such as HSBC. Now their only option is to fly to cities where U.S. firms operate.

Limited Choices

If Americans choose to bank with a non-U.S. firm such as HSBC, their investment choices are limited. At the HSBC branch in the bank’s Asia regional headquarters in Hong Kong, Americans can hold only savings deposits. They’re prohibited from opening accounts to trade local stocks or buy products available to non- U.S. customers, including 45 equity funds investing in China or other geographies and industries. There’s only one comparable emerging-markets equity option available on HSBC’s U.S.-based investors’ website.

Financial institutions that choose not to accept American customers still must determine whether new or existing clients are so-called U.S. persons in order to comply with Fatca, according to Michael Brevetta, director of U.S. tax consulting at PricewaterhouseCoopers LLP in Singapore.

The definition includes citizens, green-card holders and non-Americans deemed U.S. residents by being present in the country for at least 183 days over a three-year period, which makes them subject to U.S. tax on their worldwide income, according to the IRS.

Compliance Costs

The compliance costs for banks, asset managers and insurance companies “could stretch into the billions of dollars,” Brevetta said. Private-banking firms in Hong Kong and Singapore already have operating costs between 88 percent and 90 percent of their revenue, compared with 70 percent at Swiss banks, PricewaterhouseCoopers estimated in a September report.

Penalties for not complying will be stiff. Non-U.S. firms that don’t make required disclosures will be subject to 30 percent withholding of certain dividends, interest or proceeds from the sale of assets they or their customers receive from U.S. sources, according to Baker & McKenzie’s Weisman, who has conducted workshops and seminars on the proposed rules for current and potential clients in Hong Kong and Singapore.

Wow. The above essentially signifies as the proverbial “writing on the wall” of the growing desperation by the US government over her unwieldy state of finances due to a bloated and unsustainable welfare-warfare economy.

Not only will US citizens be restricted access to foreign financial institutions, such tax laws are subtle manifestation of protectionism as overseas investments from US investors will be severely limited. [As one would note, foreign banks have been in retaliation to the encroaching protectionist US tax laws by denying Americans access]

President Obama’s nationalist-protectionist rhetoric over BPOs is apparently being realized via arbitrary tax laws. Yet protectionism will only compound to the nation's fragile economic conditions.

F. A. Hayek once warned that Americans are headed towards the road to serfdom. His admonitions appear as becoming a reality with the deepening of America’s police state aside from snowballing political and economic fascism, signs of which the US could be in a slippery slope towards dictatorship.

Yet such laws will have adverse consequences. This should incentivize, not only more tax avoidance measures, but also prompt wealthy Americans to consider giving up on their citizenship.

True, US government has made the exit option a burden. There have been reported incidences where the US government has denied applications by Americans wishing to renounce their citizenship (Sovereign Man).

Limiting people's actions increases political destabilization. Again all these seem to square with record gun sales, polls where gold seen as the best investment option, ballooning sales of home safe and even a report where the US government has been preparing for a “civil war”.

Political risks has certainly been mounting in the US as political and economic repression suggest that the US has been increasingly at war with their citizens.

I recall that after college graduation, a relative who is a resident of the US encouraged me to emigrate to the US and apply for American citizenship. Now I realize that this decision of mine to say NO may have seemed worthwhile or the right decision.

Growing Number of Wealthy Americans Renounce Citizenship

While Filipinos have been dreaming of emigrating to the US and acquiring US citizenship, the number of wealthy overseas Americans giving up their citizenship have been ballooning, due to increasingly repressive tax laws.

From Bloomberg,

Rich Americans renouncing U.S. citizenship rose sevenfold since UBS AG (UBSN) whistle-blower Bradley Birkenfeld triggered a crackdown on tax evasion four years ago.

About 1,780 expatriates gave up their nationality at U.S. embassies last year, up from 235 in 2008, according to Andy Sundberg, secretary of Geneva’s Overseas American Academy, citing figures from the government’s Federal Register. The embassy in Bern, the Swiss capital, redeployed staff to clear a backlog as Americans queued to relinquish their passports.

The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, is searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb the budget deficit. Shunned by Swiss and German banks and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act, more of the estimated 6 million Americans living overseas are weighing the cost of holding a U.S. passport.

“It started with the fallout from UBS and non-U.S. banks feeling it’s too risky to deal with Americans abroad,” said Matthew Ledvina, a U.S. tax lawyer at Anaford AG in Zurich. “It will increase because Fatca will require banks to track down people, some of whom will make voluntary disclosures before renouncing their citizenship.”

Renunciations are higher in Switzerland because American expatriates expect extra scrutiny of their affairs after the UBS case and as the U.S. probes 11 other Swiss financial firms for aiding offshore tax evasion, said Martin Naville, head of the Swiss-American Chamber of Commerce in Zurich.

This is another example of the law of unintended consequences at work. Worst, these could be symptoms to the road to serfdom.

Are Emigrating Wealthy Chinese Afraid of a Coming Political Tempest?

Recently I blogged about an increasing number of Chinese elites who are emigrating or considering to emigrate, which contrary to conventional thinking, does not augur well or reflect sanguine signs of a “China Century”

I even alluded to snowballing risks of a political crisis

Perhaps many of these Chinese millionaires may be sensing trouble ahead (see bold highlights above), not only from a bubble bust, but also from the growing fragile state of China’s unsustainable capitalist-communist political economy.

Well, I guess my hunches seem to be getting some confirmation.

This from Financial Times/CNBC

In private conversations, many of the people who supposedly make up the ruling elite of China express serious misgivings about the direction and future stability of the country, while admitting that they feel largely powerless to affect meaningful change.

“There is a sense that we are approaching an inevitable breaking point, when the pressures in society will boil over and consume the rulers,” says one Chinese banker with close ties to a number of powerful political families.

“Almost all of the elements are in place for an uprising like we saw in 1989 – corruption is worse today than it was then, people feel they can’t get ahead without political connections, the wealth gap is much bigger and growing and there has been virtually no political reform at all. The only missing ingredient now is a domestic economic crisis.”

And many wealthy Chinese seem to be flocking to the US, by investing in “US citizenship”

From the Wall Street Journal Blog

In 2011, 2,969 Chinese citizens applied for the program and 934 were approved, according to the Immigration Service. (Approval doesn’t mean they get citizenship, it just means they can start the program). Their numbers represented more than three quarters of the total number of applicants and approvals.

It’s also a huge increase from previous years. In 2007, only 270 Chinese citizens applied and only 161 were approved, accounting for only about a third of the totals.

Why the huge increase?

The obvious reason is that China has a lot more millionaires and billionaires.

But the other reason is that these newly rich want out – or at least an escape hatch and presence in another country in case they have to flee.

So speaking of voting with their feet, many wealthy Chinese seem to view the US as having a relatively better potential compared to their homeland. They could be right.

But they could also be wrong. Maybe these Chinese elites don’t realize that they risk jumping from the proverbial frying pan to the fire.

Global Migration Trends: 700 Million Desire To Live Overseas Permanently

If migration would be liberalized, some 700 million people is likely move overseas permanently. That's based on Gallup's estimates...

``Gallup finds about 16% of the world's adults would like to move to another country permanently if they had the chance. This translates to roughly 700 million worldwide -- more than the entire adult population of North and South America combined."

And the most preferred destination for global immigrants would be the US.

Again from Gallup, The United States is the top desired destination country for the 700 million adults who would like to relocate permanently to another country. Nearly one-quarter (24%) of these respondents, which translates to more than 165 million adults worldwide, name the United States as their desired future residence. With an additional estimated 45 million saying they would like to move to Canada, Northern America is one of the two most desired regions.

But of course, while the US would be the most desired destination, one would have to reckon with their prospective emigrants. Simply said, while the world sees the US as their prime location for immigration, several Americans would opt to to live overseas.

Here Gallup measures prospective net migration flows via Potential Net Migration Index.

According to Gallup, ``The Potential Net Migration Index is the estimated number of adults who would like to move permanently out of a country subtracted from the estimated number who would like to move into it, as a proportion of the total adult population. The results are based on nationally representative surveys of more than 260,000 adults worldwide. The higher the resulting positive PNMI value, the larger the potential net adult population gain. In Turkey, for example, subtracting the estimated 7 million adults who would like to move abroad from the 2 million adults who would like to move to Turkey and dividing that number by the total adult population (52 million) results in a PNMI value of -10%."

``Across the 135 countries surveyed between 2007 and 2009, Singapore posts the highest Potential Net Migration Index of all countries and areas, with a net migration index value of +260%. Saudi Arabia (+180%), New Zealand (+175%), Canada (+170%), and Australia (+145%) round out the top five.

``Interestingly, the United States, which is the top desired destination among all potential migrants, does not make the top five in terms of potential net population growth. The United States' net migration value of +60% places it farther down the list, after Canada and several other developed nations that dominate the top of the list. One important caveat to consider, however, is that the population size of a destination country is related to its ranking.

``Developing countries, in contrast, dominate the bottom of the list. The countries with the highest negative Potential Net Migration Index values are the Democratic Republic of the Congo (Kinshasa) (-60%), Sierra Leone (-55%), and Zimbabwe (-55%), Haiti (-50%), and El Salvador (-50%)."

Gallup estimates a potential net migration index for the Philippines as -20.

The top 5 nations with the largest positive net migration index are commodity exporting countries except for Singapore. Moreover, 4 of the 5 are in Asia (except Saudi-maybe the preferred choice for most of Muslim Migrants) and are economies that have been ranked as economically free, i.e. Saudi Arabia 59th, Singapore 2nd, Australia 3rd, New Zealand 5th and Canada 7th (Heritage Foundation)

Brain Drain Is Freedom And Choice

There is this popular impression that brain drain (migration outflows) signifies as a social cost.

A UN study by Michael A Clemens refutes this notion and suggests that brain drain dynamics function similar to domestic urbanization trends and is a net benefit to society.

From Mr. Clemens, (bold emphasis mine)

``All of these “best practice” policy levers have two things in common:

First, they expand the choices available to skilled workers. For example, rural service incentives reduce the tradeoff between serving underserved populations and personal hardship.

``Second, they are more effective than shaping professionals’ migration choices per se because they address the underlying causes of those choices. For example, removing barriers to professional employment at home can change decisions freely made by potential emigrants. The common trait of “worst practice” policies is that they seek to limit skill flow itself, which is to say, to limit choices by skilled workers.

``It is time to bury the unpleasant and judgmental term “brain drain”."

Read the rest of the study here

In short, the pejorative term "Brain drain" serves to allocate labor where it is needed most. And it gives people the freedom to work for personal or career advancement. Moreover, brain drain could also be seen as an escape valve from unfree economies.

OFW Domestic Helpers Beware: The Home Robots Are Coming

If Filipinos worried about a slowdown of remittances from a potential worldwide economic recession seems valid enough, household chores based OFWs should worry about this.

Toyota has developed home robots that can do household work, and is about to hit the market in seven years time.

courtesy of Japan Times

This from the Japanese Times,

``Toyota Motor Corp. and a research body of the University of Tokyo have jointly developed a prototype for what many busy career people have been dreaming of for a long time: A hardworking robot that handles household chores.

``In a demonstration for reporters last week, the robot cleaned up rooms, smoothly put away dishes from a dining table and picked up shirts and put them in a washing machine.

``The 155-cm, 130-kg humanoid robot excels in the capacity to distinguish and perceive objects such as furniture and cleaning equipment, its developers said.

``The robot also analyzes past failures and corrects its behavior patterns, they said.

``Toyota and Tokyo University's Information and Robot Technology Research Initiative said the robot has been designed to help cope with the predicted labor shortage stemming from Japan's aging society and low birthrate.

``The developers said they will keep improving the robot and hope to start marketing it in around seven years.

``The robot is equipped with two arms, five recognition cameras and laser sensors. It gets around on wheels."

Some observations:

One, the present technology of robots are limited yet. They can’t drop or fetch school children, nor can they clothe, bath or apply first aid to them. Nor can they cook for the family or do marketing chores. But constant innovation will probably add more of these features in the future.

Two, if the cost of buying and maintaining a robot would prove to be more affordable or beneficial than one dispensed by the present household maids then our OFWs are likely in jeopardy of losing work. Yes, seven years is still seven years but preparation should prepare us from any shocks.

Three, Japan still has an inherently closed culture such that it would prefer to invent robots to do household work than to allow other nationalities to assume such a role.

With a rapidly declining population its a curiosity that they're afraid or averse to "intermarriages" or opening their society to other nationalities.