2021: What to Expect in Legal and Economic Policy, Business and Immigration

2020 has been a turbulent year for the world. Covid 19 need not be discussed anymore than it already has been, and with a vaccine around the corner, there is hope that 2021 may yield some return to “normality”. As far as business and immigration are concerned, 2020 has seen travel and visa issuance drop to very low levels. Most people have been grounded, and as a result, digital work has been on the rise. The Canadian economy saw a decline in economic growth, and a decline in immigrants arriving in 2020. The US also experienced its steepest drop in GDP growth in Q2 2020, with real GDP declining 9.1%. The Canada-US border remains relatively closed (though it is possible to travel between the countries with prior authorization, and the US border remains officially “open”). In addition, Donald Trump signed an executive order in April, halting the issuance of temporary work visas. This has meant that North America has been relatively shut off to the rest of the world. On a global scale, similar patterns can be observed in the UK and Europe, with growing fears of a continuing recession. Asian economies in the Middle East and beyond have also been feeling the shock, and the Gulf regions, such as Saudi Arabia, Kuwait, and to a lesser extent, the UAE, have seen a mass exodus of foreign workers, in the tens of thousands.

Playing Catch Up in 2021

There is no doubt that the world economy is in the middle of a prolonged recession. However, some governments may try to end the recessionary process rather quickly during 2021, if the dangers posed by covid19 can finally be mitigated. To that end, the Canadian government has rolled out an ambitious immigration program which aims to welcome over 400,000 new immigrants each year from 2021. Donald Trump’s restrictions on foreign workers are set to expire soon, and it would not be wrong to hope that incoming president Joe Biden will take a more encouraging approach to foreign workers and immigrants. More foreign workers and immigrants will generally mean more economic growth and capital investment from the incoming migrants, if they are skilled professionals or business people.

Some of the most remarkable legal changes this year have also been seen in the Middle East. For one, the UAE has revamped some of its local laws to make the country more appealing and easier to live in for foreigners. There have been changes to the Companies Law which remove the requirement to have mandatory local business partners for mainland UAE companies, thereby opening the way for less restricted foreign investments. Previously, any “onshore” companies were required to have 51% of their shares distributed to Emirati nationals, with only 49% of the shares made available for foreign investors. Secondly, the personal status laws of the UAE have been amended to allow foreigners to distribute assets according to the laws of their home country, if they pass away in the UAE. There have also been steps taken to “decriminalize” cohabitation between couples, which marks the implicit recognition of unmarried partners who may, for all intents and purposes, operate as a family unit. The Kingdom of Saudi Arabia has also announced ambitious plans to do away with the “sponsorship” system, whereby employees would be under the “sponsorship” and legal authority of their sponsor. Practically speaking, this could give employees more freedom to transfer between jobs and employers, and therefore more economic freedom. These changes are expected to take place in mid 2021.

Not all countries have taken proactive steps to boost economic activity however. For example, the Republic of Kuwait has announced plans to reduce the number of expats working in the economy, and decrease the length of time given to expats on their residence visa (one year residence permits will be issued now instead of 2 year permits). Omanization drives in Oman continue in full force and effect as well, while various ministries in the Kingdom of Bahrain have announced plans to reduce the number of expats who are employed in the government. Such policies seem to be aimed at consolidating resources and damage mitigation, due to the devastating economic impacts of covid 19.

Predicting the Future

It is very difficult to say what will actually happen in 2021. However, if the vaccine changes the trajectory of covid19 infections and deaths, after Q1 2021, things could start moving towards “business as usual.” With various legal measures and policy initiatives taken up by governments to promote economic growth and greater international cooperation, there could also be a more rapid return to economic stability. The Brexit talks will be taking place in 2021, and this could be a period when a number of historic international trade deals are signed between the United Kingdom and the rest of the world. Joe Biden in the US could reopen to country and take a more open stance to issues of international trade than his predecessor, Donald Trump. Therefore, there are reasons for an optimistic approach to 2021, though such optimism must be balanced with a healthy dose of caution.