Are the small tax havens really all that safe?


That is the theme of my latest Free Press column, excerpt:

If you are a Dubai resident, the chance that you will die in this conflict is very small. But you no longer can treat safety as something you do not have to think about. And you may face some uncertainty about when and how you can leave the country, a question that formerly was never in doubt. So two major advantages have vanished, even if the current conflict is settled soon. Another problem is that a substantial part of your supply of desalinated fresh water can be taken out by a well-placed missile.

More generally, the war underlines how tenuous the position of a place like Dubai is in the geopolitical order. I have enjoyed my three trips to Dubai, but I never felt entirely safe there on anything beyond a day-to-day basis. I always knew the place relied on protection from the United States and a certain degree of forbearance from its larger neighbors, including Saudi Arabia. Both Dubai and its larger encompassing unit, the United Arab Emirates, are extremely small.

And:

In most daily life, the small tax havens will feel safer than Cape Town. In the longer run, I am not entirely sure. My longer-run plans might be more robust in Cape Town. Or in Brazil. Or in Mexico. Those are all fairly dangerous places that nonetheless seem to have considerable macro stability in the longer run. South Africa has a pre-1930 history of taking in persecuted Jews from Europe and giving them an environment where they can thrive. Even the coming and going of apartheid, in 1948 and 1994, did not change South Africa’s high degree of security from foreign threats.

Dare I suggest that these larger places are more fun and also have more soul?

Worth a ponder.

 

I would much rather be exiled to Cape Town than to Dubai, all things considered, even assuming away the current conflict in the Middle East.




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