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July 2019, Volume 25, Number 3

Population, Golden Visas

The UN released new population projections in June 2019 that project the world's population rising from 7.7 billion in 2019 to 9.7 billion in 2050, and peaking at 11 billion in 2100. The world added a billion people between 2007 and 2019.

Nine countries are expected to account for over half of the two billion increase in population over the next three decades: India, Nigeria, Pakistan, Congo, Ethiopia, Tanzania, Indonesia, Egypt and the US. The population of sub-Saharan Africa is expected to double by 2050 and triple by 2100.

India is expected to surpass China as the world's most populous country in 2027. By 2050, the most populous countries are expected to be India with 1.6 billion people; China with 1.4 billion; Nigeria with 400 million; the US with 380 million; and Pakistan and Indonesia, with 335 million each.

Fertility fell from an average 3.2 births per woman in 1990 to 2.5 in 2019, and is projected to decline to 2.2 in 2050. Average life expectancy rose from 64 in 1990 to 73 in 2019, and is projected to be 77 in 2050.

A sixth of all people are expected to be 65 and older in 2050, up from a ninth in 2019. The number of people 65 and older around the world exceeded the number under five for the first time in 2018.

Between 2010 and 2019, some 27 countries had population declines of at least one percent. Between 2019 and 2050, 55 countries are expected to experience population declines of at least one percent.

Ten countries are expected to have a net outflow of over a million migrants between 2010 and 2020, including Syria, -7.5 million residents; Venezuela, -3.7 million; and Myanmar, -1.3 million. Many of the people leaving these three countries are refugees. Other countries send out temporary workers, including Bangladesh, expected to have a net outflow of -4.2 million over the decade; Nepal, -1.8 million; and the Philippines, -1.2 million.

Golden Visas. At least 15 countries offer passports to foreigners who invest in real estate in the country. Many more countries offer immigrant visas to foreigners who invest in their countries, including the US, which offers immigrant visas to foreigners who invest at least $500,000 to create or preserve at least 10 US jobs.

British-based Knight Frank estimated in 2018 that 36 percent of people worldwide with more than $30 million in net assets had second passports. Henley & Partners, a firm that often helps foreigners obtain second passports and immigrant visas, charges at least $25,000 to help people obtain second visas from its 30 offices around the world.

Competition between countries, especially small Caribbean nations, has led to a reduction in the minimum investment needed for a passport to $100,000. St. Kitts and Nevis was the first country to introduce a formal program of selling passports in 1984, a year after independence. Henley & Partners negotiated a visa-free access agreement for St. Kitts passport holders to the European Union's Schengen Area, making St. Kitts passports more valuable to investors.

No one knows how much has been invested in order to obtain passports or immigrant visas, one estimate is $20 billion. The Chinese are the largest buyers of foreign property that leads to immigrant visas or passports, followed by Russians.

Eight countries, five in the Caribbean, Cyprus, Malta and Turkey, give passports in exchange for property investments, and eight others including Greece, Latvia, Portugal and Spain give immigrant visas to property buyers. Portugal allows foreign property buyers to become citizens after five years and residence in Portugal of at least a week a year, while Latvia and Spain require a 10-year wait.

Portugal attracted about 4,200 Chinese property buyers in 2018. Portuguese developers often structure property projects to appeal to foreign buyers. For example, by renovating historic buildings, foreigners need to invest only E350,000 rather than E500,000. As soon as buyers make a E350,000 payment, the five-year clock to obtain a passport begins, even if the property is not habitable. Portugal offers lower taxes to "non-habitual residents."

Africa. Over 50 percent of Africans are employed in agriculture, but agriculture contributes only 25 percent to African GDP; crop yields are often a quarter of global averages, especially for corn. Africa has most of the world's uncultivated arable land, but aging farmers and low productivity mean that Africa imports $35 billion worth of food a year. Projections suggest that Africa will import over $100 billion worth of food before 2025.

Subsistence agriculture has long been associated with drudgery and poverty, prompting rural youth to migrate to urban areas for opportunity. Farmers in Africa are old. Over 60 percent of Africans are under 24, but the average age of farmers in Africa is 60.

Ghana and Ivory Coast, producers of 60 percent of the world's cocoa, announced plans in June 2019 to set a minimum price of $2,600 a ton for cocoa. Retail chocolate sales are over $100 billion a year, and there have long been complaints that cocoa farmers who often hire children receive only a small slice of retail chocolate revenue.

Ghana and Ivory Coast did not disclose how much of the higher price would go to farmers, and whether farmers would have to avoid child labor and deforestation to receive higher prices. Some cocoa farmers oppose government agencies having a monopoly on cocoa sales to buyers, arguing that these agencies take too much money from farmers.

Journalist Stephen Smith argues that the demographic imbalance between Europe, with 750 million people and shrinking, and Africa, with 1.1 billion and growing, makes more Africa-Europe migration inevitable. Smith predicts that by 2050 a quarter of Europeans could be Africans or the children of African immigrants.

Smith, Stephen. 2019. The Scramble for Europe: Young Africa on its way to the Old Continent. Polity.