Anti-migrant attitudes are hurting businesses in Denmark

Anti-migrant attitudes are hurting businesses in Denmark

Though the most recent wave of migrants reached Denmark in early September, few have applied for asylum, and the vast majority went on to Sweden. According to some, this is a good thing. To others, this symptomises how Denmark has gone from being a country willing and able to assume international responsibility to a state where powerful forces want to beef up border controls.

Migrants passing through Denmark are well aware of the fact that they’re not welcome. Sweden is perceived as more tolerant and open to foreigners fleeing war and instability, but arguably it is not just migrants who take measure of the level of openness and tolerance.

Stockholm, the capital of Sweden, has recently been dubbed a world-leading innovation center second only to Silicon Valley, and features on numerous lists of best cities for start-ups. One factor that is frequently cited as decisive in this regard is availability of talent, home-grown or “imported”. With all eyes on the unfolding migrant crisis in Europe, reputations are being formed, and they disperse far beyond desperate streams of refugees in Germany, Hungary, and Austria.

Danish business leaders stand against immigration-deterring ads

When Inger Støjberg, Danish Minister of Integration, placed ads in Lebanese newspapers outlining ways in which immigration to Denmark is becoming more arduous, several Danish business leaders spoke up.

They expressed concerns that such a move might hurt Danish exports and the attractiveness of Denmark as a place for high-skilled foreign workers.

The full-page, tax payer-funded ads ”inform people that we would rather not see them. That won’t make us any richer, only poorer,” according to a Communications Manager from Grundfos.

Along the same lines, the Managing Director at Microsoft Development Center Denmark expressed that she fears applicants will cease to look to Denmark for opportunities if hostile attitudes to immigrants persist.

In order to soften the impression, a group of independent Danes have collected DKK 160,000 (~US $24,000) in order to place another ad in the same Lebanese papers, this time apologising for their own government’s hostility. Perhaps the lasting impression of the Danes will be divided as opposed to unequivocally unwelcoming.

A translated version of the ad placed in Lebanese newspapers

A translated version of the ad placed in Lebanese newspapers

Migrants might impose a short-term cost, but could be a long-term benefit

The majority of immigrants arriving to both Denmark and Sweden are humanitarian refugees, often with little or no education. The language barrier is a significant challenge, which is not easily overcome, and labour market outcomes are poor, with a much higher unemployment rate for foreigners, as shown in the figure below.

Source: OECD Indicators of Immigrant Integration 2015

Source: OECD Indicators of Immigrant Integration 2015

Integration undeniably poses challenges. However, with small, open economies like Denmark’s and Sweden’s, it is unwise to be xenophobic. Furthermore, both countries stand to benefit in the medium to long term, since the number of people of working age is shrinking, potentially creating shortages in the labour supply.

According to Cevea, a (center-left) think-tank, maintaining the welfare state in Denmark is impossible without foreign-born labour to fill out the gaps left by retiring boomers. Last but not least Scandinavia, including Denmark, has long been viewed as a group of ‘model countries’, exemplifying how to be transparent, well-governed and responsible.

This is what is at stake – the right to take the moral high ground in international politics.

The situation becomes even more delicate when taking into account that former PM Helle Thorning-Schmidt has been nominated by the Danish government as UN High Commissioner for Refugees. The timing could hardly have been worse.

Make no mistake, Sweden’s immigration debate is looming; it just has not been allowed to unfold yet.

Sweden Democrats, an anti-immigration party, attracted a quarter of the vote in a YouGov poll from late August. The only reason SD has not acquired the same level of influence in policy making as the Danish People’s Party is due to the fact that no other Swedish party wants to cooperate with them.

A 25.2% share of the vote is fully comparable with the DPP’s, however, and suggests that there is a significant part of the population in Sweden, too, who is far from thrilled at the prospect of welcoming an influx of migrants. They’re just less vocal on the international stage than their Danish counterparts.

Categories: Economics, Europe

About Author

Mikala Sorenson

Mikala Sorensen is an Economist with regional expertise in Europe. She holds a first class honours degree in Philosophy, Politics and Economics from the University of York and a Masters in Economics from the University of Copenhagen. Having interned at the Danish OECD-delegation in Paris and currently working at the Danish Ministry of Finance, she specialises in politics and macroeconomics. Analysis for GRI is an expression of her own views.