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whereaminow (73.00)

Want Prosperity and Liberty? Move to Qatar or the UAE

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January 27, 2009 – Comments (10) | RELATED TICKERS: Q.DL , ATA , R

Since 1996 I've spent a great deal of time overseas. Since 2002, I've been in the Middle East. I want to share some impressions and thoughts on economic and social life that you won't learn about unless you flee the United States.

I live in Qatar and I am very happy. I have a good job. I do not pay personal income tax. In fact, no individual in Qatar (Citizen or not) pays personal income tax as far as I know. The Corporate tax rate is 10%in Qatar (12% in the UAE). There is no universal health care. No social security. No value added tax. No Capital Gains tax. No dividend tax. No minimum wage laws. No estate tax. As far as I am aware.

Many Americans falsely believe that Qatar, Bahrain, and the better known United Arab Emirates are fantastically wealthy due to oil. This is a half-truth and a convenient fallacy. It allows Americans to place blame for the shortcomings of their economic system on a magical outside force that is beyond their control.

Oil has certainly increased the wealth of Arab governments. It has not, however, led to an increase in the wealth of Arab populations unless coupled with Laissez-Faire Capitalism. Otherwise, that wealth has been confiscated by the ruling class and the population has remained economically and socially enslaved.

In Qatar and the UAE however, the story is quite different. Not only has laissez-faire capitalism flourished, it has raised the standard of living for all residents, foreign nationals included. These two countries have become the "melting pots." Less than a quarter of their populations are natural-born citizens. Foreign nationals from every country, including America, have higher standards of living than they would back home. Phillipinos, Indians, Bangledeshis, Pakistans, Europeans, and Americans flock to Qatar and the UAE for good reason.

The side effects of this laissez-faire approach are phenomenal. Police brutality is unheard of. Though the official religion is Islam, the rules regarding expression of religious beliefs are clear. There is no religious persecution. Fraud and coercion are practically non-existent. Most people work very hard. There is little-to-no homeless. Medical expenses are easily paid for except for the most significant procedures. Nobody cries about a lack of health insurance. Nobody has the need or desire for forced government retirement funds like Social Security.

The stock markets in these countries continue to boom for multiple reasons. Capital is allocated into productive resources. Oil, while a staple of these societies, is only a small part of the picture now. Money makes money when employed effectively. Hard work and voluntary cooperation in an open market creates wealth. Businesses keep 90% of what they earn, to be reinvested in other endeavors. Individuals keep everything they make, and invest that money as they see fit. Without the government destroying wealth and imposing its will, society is happy and productive. There are no "robber barons." There are no Bernie Madoffs. While fraud happens, as it does anywhere, the fraudulent are more often held accountable than anywhere I have ever lived (and I've been around the block a couple of times.)

Not everything is perfect in these countries of course. There is, after all, still an existence of government and the ever looming threat of foreign governments. Maybe in time the Qatari and UAE ruling classes will react to their loss of control over the lives of their citizens. Maybe a foreign nation will attempt to steal their resources and wealth. Maybe religious leaders will attempt to polarize the populace. Maybe maybe maybe....

But for now, without a doubt, if you want liberty look no further than Qatar and the UAE. It is true that you want have perfect Anarcho-Capitalism as Rothbard envisioned. It is true that you may still get screwed over by a rich Arab with more "wasta" than you. Nonetheless, when compared with the ever burgeoning American/European police state, destructive government market intervention, and overall popular apathy and self denial of American/European Socialist culture, I'll take life in Qatar or the UAE any day of the week.

I hope not to offend anyone here. I only wish to shed some light on the misconceptions of Arab life that only serve to feed the empirical/protectionist ideas of American intellectual thought.

The people on The Daily Paul come here because the seek liberty. I'm letting you know that I have more living in an Arab country than you have in America. Most of you already suspected it, which is why you browse this site to begin with. You're intelligent and inquisitive. I thought this might be a receptive audience.

If you want to know more about these countries, ask. I will tell you what I know. I'm not a sociologist, a census taker, or a bureaucrat. I work, live, and play. I'll share what i know.

-David in Qatar

10 Comments – Post Your Own

#1) On January 27, 2009 at 1:59 AM, whereaminow (73.00) wrote:

Obviously I first posted this on another website's discussion board and then lazily copied it over. But, it also holds true for The Fool Community. Be sure I won't be posting this at Daily Kos or Red State any time soon.

Regards,
David in Qatar

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#2) On January 27, 2009 at 2:50 AM, DaretothREdux (45.97) wrote:

You don't think you would get a good reaction at Red State? Heh. Great blog man. If you are looking for a good laugh, you might enjoy my rant today. I try to be funny yet relevant.

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#3) On January 27, 2009 at 3:31 AM, falang1 (98.54) wrote:

...and I would fly Gulf Air over Northwest any day.  Can I ask what lines of work are there and what the weather/social activities are like?  Can you take your kid out to a ballgame or play football (soccer) at the park?

I am overseas as well and while the money is great I find that I miss some of the "niceties" that the US has (national parks, etc).  I am trying to find a balance somewhere.  

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#4) On January 27, 2009 at 4:05 AM, saunafool (98.67) wrote:

David,

Maybe I'll be traveling there later this year to see for myself, but that's for another day.

I live in Luxembourg, and many of the things you say about UAE and Qatar could be applied to Luxembourg as well: Lower income, corporate, and VAT tax rates than the surrounding countries, no capital gains tax, very low property tax, people work very hard, and society is very safe. 40% or so of the population is foreign born with plenty of Americans, Asians, and other Europeans.

With so many banks here, I won't make any claims about corruption, except that none of the scandals to date have originated in Luxembourg.

The difference is we also have universal health care, numerous other social benefits provided by the government, and some things that are kind of old-school socialist like the government owned mustard factory.

Oh, and the other difference: Luxembourg has the highest per capita income in the world. UAE is ranked 36th in between Spain and New Zealand. (The linked article suggests that the cross-border commuters are one reason the Luxembourg number is distorted, but even if you were to drop the number by 20% to account for "les frontaliers" the per capita number would still be the highest in the world.)

Here is my personal theory: It's the small country advantage. With a small country, all the government has to do is have relatively better conditions for business than the surrounding countries. Doing so will attract a disproportionate capital flow relative to the population, and the small population will prosper.

The UAE is doing basically the same thing--setting themselves up as the finance/business hub for the whole Middle East. It's a smart move.

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#5) On January 27, 2009 at 4:08 AM, whereaminow (73.00) wrote:

falang1,

The Qatari people are big into sports. Google Image "Khalifa Stadium" when you get a chance. It's remarkable. Of course, they are all about soccer, cricket, golf, racing, etc. Doha, Qatar hosted the Asian Games in 2006.

For a family, Qatar can get a little boring, but Dubai and Bahrain have awesome family entertainment: spectacular amusement parks, beaches, and nightlife. They're both less than an hour flight from here.

Btw, have you ever flown on Emirates Air? You'll never look at an American airline company the same way.

Of course, like all Muslim countries, there are social issues that will drive a Libertarian like me absolutely nuts:

1. If a mosque opens up near your home, oh well. That's 5 times a day you'll be listening to some imam sing gibberish to you. Though, thankfully, unlike other Muslim countries, the whole world doesn't stop when he sings.

2. Drugs are illegal and possession is punished severely. Period.

3. In Qatar, you can drink in your home but you must buy a liquor license and purchase from the State-run store that marks up the prices about 50%.  Qatar has some bars and night clubs. Dubai and Bahrain are way more fun.

4. You have to respect their sense of "decency." Don't let your daughters run around in miniskirts, but other than that, you'll be fine. Don't open-mouth kiss in public. Etc. It's like the Puritan Age sometimes. A bit ridiculous.

-David in Qatar

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#6) On January 27, 2009 at 4:39 AM, whereaminow (73.00) wrote:

falang1,

The weather is similar to Arizona. Hot and dry (though with occasional humidity from the Persian Gulf). The summers are rough. You stay indoors. The winters are awesome.

As for the available lines of work: everything. If you have a computer background like me, you can work anywhere in the world and Qatar is no exception. But just about every business you'll find in America or Europe can be found here.

Sauanfool,

I've heard great things about Luxembourg. I recently turned down a job in Germany because I couldn't get a VAT exclusion, but I've traveled to through Europe quite a bit.

Make no mistake about it. If you can live tax free in Europe, with a good job, you should do that. You have to be wary of the Euro/EU, the Police State, and the political instability that grows every day. On the flip side, the weather and culture are better - there is more to do.

But I really believe that pendulum too, is swinging, which is the point of this post. Though you'll never get over 120 degree heat in July, I predict that in less than a decade the UAE will certainly surpass most European countries in terms of liberty and prosperity. I think it has already passed all of them (perhaps except Luxembourg) in terms of economic liberty. 

Singapore is another country that went through a period of tremendous growth due to laissez faire capitalism, but from what I am observing, there is already a shift underway back to State control.

It's unfortunate that no country has it right yet. You will not find social and economic freedom in any country in the world. At least, I haven't yet. Though I hear some good things about Costa Rica and will have to check it out some time. I'm no expert on Central America and the constant drug wars deter me from taking a closer look.

Regards,

David in Qatar

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#7) On January 27, 2009 at 5:00 AM, falang1 (98.54) wrote:

Thanks for the input.  I must admit your idea of amenities change when you have a family.  "Nightlife" can be substituted for "nice park with a swingset".  Having both is a plus, not too boring for kids or parents.

Never flown Emirates. Singapore Air and Gulf Air are my favorites.   Not an elitist, I just fly a lot.  But as long as the plane is not 20+ years old, I'm usually ok.  

#2..I see a lot of that everywhere (the severe drug penalities).  Is it just the US and some of Euurope that are lenient?

#3...hmm, buy a liquor license to drink in your home?  That's un-American!!  ;)

#4...similar to Singapore.  They have "no-kissing" signs in the taxis.

 I have to think about whether I agree with saunafool, but I wonder if indeed this is only possible in smaller countries.  Or maybe just the "tax-haven" or banking countries like Bermuda, Cayman, Monaco, etc. If everyone followed this, money would no longer flood into these countries?

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#8) On January 27, 2009 at 5:57 AM, saunafool (98.67) wrote:

You have to be wary of the Euro/EU, the Police State, and the political instability that grows every day. On the flip side, the weather and culture are better - there is more to do.

Americans always ask me about the EU. They really believe in the "black helicopters" thing--that it's some evil entity determined to form a Soviet Union of the West.

Personally, my business is distributing products all over Europe. It would be almost impossible without the EU and the Euro. I love the Euro.

Not saying it's perfect, but on the whole, the EU has opened up the free flow of goods across borders and greatly simplified business in Europe. Before the EU, doing business in Europe was worse.

So, I would make the argument that the general trend in Europe is towards greater economic freedom, not state control. The EU is a big, inefficient bureaucracy, but Europe is a big, inefficient continent for doing business (17 languages or so, formerly different import rules and duties for every country, and so on).

Of course, a recession (particularly one originating in the private sector like this one) can always cause a major setback to free markets, so we'll see how it plays out in the next 3-4 years. (My guess: not good.)

As for political instability, on one hand we have Greece which is obviously having problems; on the other hand we have France and Germany which are more united, and more embracing of free markets than they have been for the past 30 years.

Problems and discord? Of course, welcome to Europe. It's like herding cats, even within the borders of many of the countries. Tough, even hundreds of years later, to forget that feudal past...

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#9) On January 27, 2009 at 6:28 AM, letitgrow100 (87.86) wrote:

http://www.heritage.org/Research/PoliticalPhilosophy/fp1.cfm

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#10) On January 27, 2009 at 8:35 AM, JakilaTheHun (99.93) wrote:

saunafool makes an excellent point and it's one that I want to write about in great depth one day.  Small states, just like small companies, have many advantages.  They are focused and more capable of dealing with their problems in an efficient manner.  I almost always invest in small companies because it's rare to expect huge returns from a big, diversified, inefficient conglomerate.  Governments are really no different.

Madison wrote in the Federalist Papers about republican government and how it only worked on a small level.  He said a republic the size of the United States would be too bulky and would ultimately fail and/or morph into something else.  The entire idea behind Federalism was to decentralize power to a much more local/small state level.  Unfortunately, as generations have passed, we've totally forgotten this truity in the United States. 

We should have never admitted states as large as California or Texas to the union to begin with.  They should have been broken up several times.  Our system is now an incoherent hodgepodge and it's inevitable that the Federal government will continue taking power as a result.  In fact, we're morphing into a centralized monarchy.

It's not laissez-faire capitalism that creates great wealth in small countries.  It's smart and prudent policymaking that is achievable best on a small state level.  For Qatar, that might be low taxes and little government intervention in the economy to lure in foreign investors with a lot of capital.  Luxembourg's vision might be a bit different with universal health coverage and other state-provided niceties that also lure people in.  The common theme is that it's much easier to manage a small government and there are fewer inefficiencies.

Btw, one of the states in the US that has the lowest taxes is New Hampshire.  It's not a coincidence.  The costs of government are extremely low due to its small size.  In fact, they don't even pay their legislators; they have "citizen-legislators" who merely collect a stipend for their travels. 

 

Of course, there's a downside, too.  Small states are more efficient, but they are also more suspectible to outside threats.  No different than small companies, really. 

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