Effect of Banking Collapse; Southeast Asia Grows as Retirement Destination
The western banking collapse of 2008 did more than cost investors large sums of money, it exposed markets to a renewed sense of vulnerability in that is typically thought of as the world’s most stable financial institutions. But one of the unintended (or unforeseen) results of these events has been the upsurge in alternative retirement destinations for those that are ending their working careers. Perhaps most surprising is the upsurge in the number of retirees moving to the Asia-Pacific region.
Changing Visa Arrangements
“One of the things that has propelled these trends and made these types of arrangements much easier,” said John Gordon at NordFX,“ is the willingness of Southeast Asian economies to offer retirement visas for foreigners.” Long term visas now being offered by governments in the Asia-Pacific region (especially in areas like Malaysia, Thailand, and the Philippines) have made these transitions easier and encouraged foreign inflows for consumer spending within their respective economies.
One of the most successful examples can be seen in the My Second Home (MM2H) program that was initiated by the Malaysian government in 2002. This program was designed to attract retiring expats for the long-term and has since attracted nearly 20,000 expats from the UK alone. A former British colony, Malaysia also established an Expatriate Service Division that is geared toward helping foreigners as they enter and stay in the country for long periods of time. Malaysia also expressed an interest in increasing the number of 10-year visas and long-term work permits that are given to foreign residents each year.
Economic Influences
These efforts to ramp up tourism and long term visa extensions for retirees could be what ultimately cushions the Asia-Pacific economies during any potential difficulties that are seen economically during the next decade. Recent examples of political turmoil in Thailand and the growing possibility of a “bubble-like” economic scenario have raised the chances that the region could experience another financial crisis that is similar to what was seen in 1997.
The regions that are most likely to experience the benefits, however, are the areas where there are more relaxed procedures for visas (both long and short term), a broader acceptance and implementation English language communication outlets, and a decreased likelihood for political hostilities and instability. To say the least, the possibility that a government might be overthrown will weigh heavily on the prospects that the country will be viewed favorably by foreign retirees as a suitable destination. This Is something that is being seen now, to a large extent in the troubles being experienced in Thailand.
In any case, the broader trends here are clear: The Asia-Pacific region has grown leaps and bounds in terms of its ability to attract foreign retirees for both brief and extended periods of stay. This creates large positives for the economies in these areas, and this will likely provide incentives for governments to relax visa restrictions in the next few years.
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