Emerging economies remain home to the world’s wealthiest expats, according to the latest findings from HSBC Bank International’s Expat Explorer survey, the largest global survey of expats.
Expat Economics, the first report from the 2010 study, found that Russia, Saudi Arabia and Bahrain were the top locations for expats when it came to overall wealth with higher annual salaries, greater levels of disposable income and more expats owning luxurious items.
Now in its third year, Expat Explorer surveyed more than 4,100 expats from over 100 countries, an increase of close to 1,000 additional respondents on 2009 making it once again the largest global survey of its kind. Expat Economics rankings features 25 countries in 2010, determining each location’s economic score based on three main elements: Annual income in excess of $200,000; Monthly disposable income in excess of $3,000; A measure of defined luxuries (such as owning either a swimming pool, more than one property, a boat/yacht, or going on more luxurious holidays).
Lisa Wood, Head of Customer Propositions at HSBC Bank International Bank, said that it was clear the wealth gap was widening between the east and west, with expats in emerging economies leaving their counterparts in the Eurozone behind.
“The BRIC economies have fared well over the last year and as a result we’ve seen that these expat locations are particularly strong when it comes to expat finances,” said Wood.
“While it is these countries that continue to perform well, the report has also revealed that Eurozone countries were the worst performing when looking at purely financial criteria and subsequently all featured in the bottom quartile of our league table. It’s not surprising that ongoing volatility in the region could have been one of the main contributors to this,” Wood added.
Expats in Russia remain the wealthiest in the world, with over one-third (36 per cent) of those surveyed earning over $250,000. Both Singapore (32 per cent) and Bermuda (27 per cent) also have a much higher proportion of expats with an annual income of over $250,000, significantly higher than the world average of 13 per cent.
Mainland Europe, however, dominates the bottom five positions on the league table. Almost two-thirds (62 per cent) of surveyed expats living in Spain earn below $60,000, as do almost half of the expats living in France (47 per cent) the Netherlands (47 per cent) and Germany (45 per cent). This is much higher than the global average of only one quarter (26 per cent) of expats who earn less than $60,000 and can largely be explained by the high number of expats who choose mainland Europe as a retirement destination. The only other country to join mainland Europe in the bottom quartile was South Africa, where around one-third (36 per cent) of expats earn less than $60,000.
Scores for expats based in the BRIC (Brazil, Russia, India and China) countries were higher than average when looking at a number of economic factors including earnings, career development, improved economic outlook and the ability to save.
While close to two-thirds (63 per cent) of all expats surveyed said they are earning more in their host country than in their country of origin, expats based in BRIC countries scored much higher (Brazil 69 per cent; Russia 82 per cent; India 70 per cent and China 75 per cent). In addition, with the exception of Brazil which fell slightly under the overall average, expats in BRIC countries were also more likely to see increased career opportunities within their host country (64 per cent overall compared with; Russia 82 per cent; India and China 70 per cent).
Finances amongst expats in general remained extremely positive, with the majority of those surveyed saving more since moving abroad and very few accumulating more debt. Two-thirds (66 per cent) of expats have more disposable income in their new country and those in the defined wealth hotspots are benefiting most from the increase in their personal finances. All expats surveyed in Bahrain agree they have more disposable income than they did previously, with the numbers also extremely high in Bermuda (96 per cent), Qatar (92 per cent) and Saudi Arabia (92 per cent).
Expats are also still saving a greater amount whilst working abroad and one in five (20 per cent) are able to pay off more debt than when they lived in their home country. Only 5 per cent of expats surveyed overall are now accumulating more debt. Qatar boasts the highest number of expats being able to save more than in their home country (92 per cent) followed by Saudi Arabia (89 per cent), Bahrain (88 per cent) and Russia (76 per cent).
Although expats tend to use a large variety of vehicles to save and invest, a large proportion of wealth in longer term investments is repatriated, the most common being property (30 per cent), equity (22 per cent) and bonds (11 per cent). The most popular investment vehicles for expats in an offshore centre were managed funds (16 per cent), equities (13 per cent) and foreign exchange (12 per cent).
Almost half (47 per cent) of all the expats surveyed believed that the economy in their current country has deteriorated since the start of 2009. Reflecting the turmoil experienced in the Eurozone, a larger number of expats based in Spain (93 per cent), Belgium (60 per cent), France (60 per cent) and the United Kingdom (67 per cent) also agreed with this statement.
This was in contrast to the economies that have escaped the worst of the economic downturn, with a smaller number of expats living in the emerging nations of Russia (45 per cent), India (16 per cent) and China (9 per cent) feeling negative about their respective host economies.
Expats in these regions were also much more likely to view the economy as having improved over the last 12 months (Russia 27 per cent; India, 50 per cent; China 61 per cent) in comparison to the overall survey average of around one-quarter (22 per cent).
Of those expats who revealed that the economic situation in their country had either deteriorated or remained the same, a vast majority (87 per cent) did not believe that they would be re-locating. This trend was generally higher in Middle East and Asian countries such as Qatar (94 per cent), Bahrain (97 per cent) and China (92 per cent) than European countries such as Germany (84 per cent), United Kingdom (78 per cent) and Spain (83 per cent).
“It’s fair to say that we’ve definitely seen a marked change in expat sentiment, particularly when it comes to individuals’ respective economies and their feelings on going home,” said Lisa.
“Against the backdrop of global economic recovery, we are still finding a large proportion of expats who are indicating that the economic situation of their adopted country has deteriorated. Despite this, most aren’t considering a move home and better still, the majority of expats surveyed have higher levels of disposable income, are saving more and accumulating less debt.”