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News News
Fears grow over protectionism
As the global financial and eco- tionism is French President months’ time to see that French
nomic crisis has deepened, fears Nicolas Sarkozy, who has pro- industrial groups have passed into
are growing over a possible new posed the creation of a $25 bil- other hands,” Sarkozy has said.
wave of protectionism. lion sovereign wealth fund to It is unclear whether other gov-
So far, there is little evidence of shield French companies from ernments will heed Sarkozy’s call
a large upsurge in traditional bor- foreign “predators,” insisting that for investment protectionism -
der tariff protection - though the without such a mechanism, Germany has severely criticized
Russians have increased tariffs on France will “stop building trains, the French plan. According to
cars, the Indians have increased aircraft, cars and ships” and the United Nations Conference
steel tariffs, and other countries become a “reserve for tourists.” on Trade and Development
have threatened future actions. At Sarkozy intends to use an existing (UNCTAD), national regulatory
the recent G-20 meeting, world state financial house, the Cassis changes to FDI guidelines were
leaders promised not to introduce des Dépôts et Consignations overwhelmingly favorable
protectionist measures over the (CDC), as the means of adminis- during the 1990s. As late as
next year. tering the fund. 2000, of 150 regulatory changes
There is, however, one ominous The CDC will come under tracked by UNCTAD, only three
sign of protectionism in an area tighter government control, with were counted as unfavourable
that is mostly outside the scope of the French state assuming a siz- to FDI. By 2006, however, UNC-
WTO trade rules: foreign direct able minority position in the new TAD reported that 37 of 184
investment (FDI). The leading fund. “I will not be the French actions (20 percent) were © Vasily Smirnov
advocate of investment protec- president who wakes up in six unfavourable.
President Sarkozy
Global recession ‘could
Expat workers key to economic
hit expat clients’
development in Kuwait
spending habits’
The global financial crisis will restrictions, reduced fees and
introduce new realities in the charges, and a reduction in
region, possibly resulting in an bureaucratic procedures relating
influx of expat workers to Kuwait to business.
Medical insurers and brokers with they go out, while around 40%
from neighbouring Gulf states. The general perception is that
clients based or heading overseas have cut down spending on holi-
The downturn is affecting the the current system of immigra-
face huge difficulties during the days and clothing.
Gulf regional markets, potentially tion regulations, property laws,
next twelve months, as British Despite the global financial
undermining prosperous local and the procedures regulating the
expatriates cut back on spending uncertainty the survey indicated
economies. Due to worsening establishment of new businesses
due to the economic downturn. that most expats believe their
financial and economic situa- in Kuwait are not up to date,
An extensive survey by Bupa lifestyle is better in their new
tions, some regional migration of non-competitive and not wel-
International has established that country. Most said the weather
expat workers throughout the coming to foreign investments.
almost 75% of expats are con- and the way of life are the most
Gulf region can be expected. The Ministry of Immigration
cerned about the impending eco- significant advantages of an off-
Recently in Dubai, Nakheel, a recently announced that it would
nomic downturn. In particular, shore lifestyle. Over a third say
major developer in the Gulf, suspend the renewal of visit visas
the negative impact of currency their health has improved since
made redundant around 500 immediately after the Eid, appar-
fluctuations was of special con- moving, due to more exercise and
employees, 15% of its work force. ently to implement new visit visa
cern, as the value of the British a healthier diet.
Most of these expatriate workers charges.
pound has fallen by 17% against Tim Slee, global sales director at
have already gained excellent Many expatriate partners cur-
the euro since the start of 2007. Bupa International, said the results
experience in construction work rently working and living in
According to Bupa International, show that the onus will be on
and financial expertise, and Kuwait will feel the harsh impact
expats say they are now spending insurance providers and brokers to
absorbing such workers into the of such increase in visa charges.
less money, while saving is proving help customers on tightening
local Kuwait economy should Those workers, especially those
“increasingly difficult”. A drop in budgets.
prove an asset. who have been laid off by giant
property prices are also affecting “We need to ensure they remain
Some commentators believe developers in the Gulf, will wel-
40% of the expats surveyed, while well-covered internationally for
the expected influx of expat come Kuwait as a new workplace,
over a third expressed concerns healthcare at a price that works
workers and employees from a Government spokesperson
about the impact the global down- for them, even if this means
neighbouring Gulf states requires claimed. “The global economy
turn will have on their pension. adjusting their cover back to what
changing the current ‘mind set’ in requires innovation and flexibility
Almost half of expats said they they consider to be the essentials,”
Kuwait. There have been calls for in businesses and investment reg-
are not spending as much when he said.
greater flexibility in immigration ulations,” he added.
January 2009 Investment International www.investmentinternational.com
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