WHERE in the world should Jersey be targeting its marketing efforts? It seems to be a trickier question than first appears.

Around five years ago the Middle East was top of the list for the finance industry, specifically Dubai. But in the past year others have come to the fore. A well-travelled economist told me last week that he actively seeks to avoid Dubai, believing that its tourism strategy needs revisiting. Mass-market promotion is not to everyone’s taste.

China and particularly India have become the places to be, not just for the Island’s financial services industry but also in terms of general economic development. Guernsey already has a presence in China and our own Economic Development Minister Philip Ozouf is keen to establish a Jersey presence in India, following his visit there earlier this year.

Indeed, within the next few weeks Jersey businesses are being invited to tap into the expertise of Indian entrepreneurs at ‘angel’ workshops.

On the other hand, the recent investigation into the future of the finance industry by the London Business School suggests that there could be rich pickings on Jersey’s own doorstep, namely Poland and other eastern European countries. In the interest of environmental sustainability alone (given the multiple costs of long-haul flights), the suggestion is worth more than a second glance.
Nevertheless, it would be silly to ignore the recent rapid growth in India and China and their potential to breed the multi-millionaires which fuel Jersey’s own economy. And in times of economic downturn, both countries are likely to fare rather better than London and New York in the aftermath of the sub-prime crisis.
According to a recent comprehensive report on the global wealth index, published by Barclays Wealth, by 2017 China is expected to accelerate from seventh to third place and India from 12th to eighth place.
The gap between the developed

and developing markets is closing, they predict, with the number of countries with dollar multi-millionaires increasing from seven to 12 in 2017.

According to Barclays, the one to watch is Russia, which is on the verge of joining the top ten. Brazil is not far behind, and strong performance is forecast from maturing economies like Turkey and Malaysia.

Inevitably this will displace historically stronger countries, like Norway and Australia, and even the UK.
As difficult as it may be to forecast what the economic world will look like ten years from now – considering how quickly things have evolved in the past five – Barclays are confident that the number of high net worth households in the top ten wealthiest countries will almost double, totalling a combined wealth of more than $154 trillion.

Those involved in the private wealth management industry may have to fight harder for it as the newly developed countries increase their own expertise, but there will be plenty more work to go around.

WHAT might the future hold for property investment? In the UK, we were told last week, house prices have fallen by over four per cent in the past year. At the same time some specialists are gloomy about the prospects for the number of new shopping malls due to open there this year, not least the £1 billion Liverpool One, which opened last week with reportedly only 80 per cent of its retail space taken up.

In Jersey the structuring of property funds has been a big winner over the last couple of years, sparked by changes to UK legislation on stamp duty.

And according to a Jersey supplement published by Property Funds World this month, the closing of that loophole has not halted progress one bit. Neither has the introduction of Reits (Real Estate Investment Trusts) in the UK become a competitive disadvantage for Jersey practitioners.

Nevertheless, complacency is not advisable, as we are often told. The announcement by Jersey Finance chief executive Geoff Cook that funds statistics for the first quarter of this year are ‘flat’ is an indication that something is going on in the investment markets and that it is starting to make inroads here.

Whether that means a noticeable slowdown in the Island’s property funds business is difficult to tell, given the confident stance taken by industry spokesmen in the aforementioned supplement.

Not least, they herald the introduction of the new unregulated funds régime, although according to one practitioner it may be hedge funds and private equity structures which will be more inclined to use it.

Meanwhile, it is not unreasonable to ask about the impact of a decline in UK property prices on the plans for Jersey’s Waterfront. If UK retailers are not prepared to invest in new malls on their own doorsteps, will they be prepared to take a leap across the water to a refurbished abattoir building and other assorted developments? Will we ever see shops like TK Maxx in the new Esplanade shopping district?

Or will they decide that the reluctance of UK shoppers to spend money anywhere – let alone in an expensive Island which has just added at least three per cent to its prices – is not worth the risk in the current climate?

TALKING of GST, I must say that I’ve noticed some scandalous increases. Contrary to the assertions of Chief Minister Frank Walker at the Institute of Directors’ annual debate last week, I have no hesitation in saying that in my personal experience the Jersey retailers I frequent have absolutely not absorbed GST.

I’m a creature of habit, like most busy people, and many of the items I buy on a regular basis have gone up by considerably more than three per cent in the last week or so. The average seems to be 50p on items that used to cost less than a fiver.

No doubt the market will adjust as people like me vote with their feet and say: ‘I’m not paying that.’ However, last week I was paying £1.03 for a litre of milk. This week it’s down as low as 97p in some outlets. I guess that’s competition for you.