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In Londongrad, not everything that’s rich is Russian

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It’s well-known that London has cultivated a reputation for itself as a playground for the ultra-rich in recent years, with more billionaires per capita than anywhere else on the planet. But while much of that wealth has been associated with Russian oligarchs in the press and by politicians – earning the city the dubious nickname of ‘Londongrad’ – a new report has highlighted how London is a hot place for investments and residence of rich people from other countries as well, with Gulf nations pouring up to five times more than Russia into London overall, writes Colin Stevens.

The fact that all six of the Middle Eastern nations named in the report have had struggles with human rights abuses and internal scandals underlines how the UK government is keen to turn a blind eye and welcome the rich and powerful individuals from these countries if the price is right. Worse, many foreign affluent individuals claiming residency in the UK, have even helped themselves to government support intended to alleviate the economic effects of coronavirus.

Russian reputation belies Gulf ascendency

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While the influx of Russian cash into the UK has been a particular cause for concern among British journalists and politicians – even prompting an eponymous report into Russia’s activities in the country – the stats show that they’re not the biggest investors by a long shot. The £25.5 billion spent by Russian businessmen is not an insignificant sums by any means, but it’s half the outlay expended by China and is positively dwarfed by the astronomical amounts poured into the country by oil-rich Gulf nations.

In the wake of these investments, an illustrious group of Gulf royals have set up shop across the UK, residing side-by-side with the notorious Russian oligarchs. Since the late 2000s, Arab sheiks have bought up prime real estate in London to have a residence in a country that not only offers them tax advantages but also serves as a get-away playground for doing business and enjoying entertainment not possible in their home countries. For example, Saudi prince Alwaleed bin Talal acquired a top-end hotel, the Savoy, while the Sultan of Brunei purchased the Dorchester Hotel. The list goes on, but illustrates how these real estate items are turned into trophy assets for those able to afford self-aggrandisement.

While the Conservatives will point to the massive injection of capital that those investments have brought to British shores, they are less eager to acknowledge the repressive regimes that often fund them. Indeed, the willingness to embrace overseas arrivals with shady histories if they open their chequebook is the over-arching theme in the story of how London became the place it is today. This is epitomised succinctly in the case of another non-Russian, Nerijus Numa, Lithuania’s richest man, who might also be in legal trouble back home.

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The Lithuanian reportedly holds a portfolio of companies and properties worth around £1.2 billion, and assumed taxpayer status in the UK in 2015. Numa’s business interests, however, have been dogged by accusations of fraud and tax evasion. Holding company Vilniaus Prekyba – the owner of Lithuania’s largest retail chain and of which Numa is the single biggest shareholder – was probed by Lithuanian authorities shortly before his relocation to London, a move which has itself raised questions over the double taxation avoidance agreement between the two countries.

In the Netherlands, the Amsterdam Court of Appeals started a formal investigation concerning the activities of one of his companies, TAF Asset 11, focusing on a string of suspicious transactions to the tune of €26 million. According to the court, these funds were transferred from Numa's former companies to TAF Asset 11 in 2009, officially for "tax reasons", but they resulted in the acquisition of a Polish company called Emir 77. The fact that the acquisition happened without guarantees and under terms unfavourable to TAF Asset 11 caused the Amsterdam court to raise the question what the real interests behind the transactions were. For his part, Numa denies the charges, arguing that neither he nor companies connected to him are currently under investigation.

Foreign investment trickling upwards only

Again, proponents of the UK’s morally fluid stance on FDI will highlight how Numa has not yet been found guilty of any wrongdoing in much the same way they have attempted to wash their hands of the oppression linked with their Middle Eastern benefactors. However, it’s clear that even a purely economic argument doesn’t hold up under much scrutiny from the perspective of everyday citizens.

Indeed, the only ones who appear to be profiting from overseas investment are those already with one foot in the mega-rich club, while over 200,000 Londoners lose their homes as entire estates are demolished to make way for fancy new developments. The opulent hotels which are owned by sheikhs, sultans and other affluent Arabs, often serve as the backdrop to their lucrative commercial transactions, are staffed by minimum-wage attendants, only leading to a widening dichotomy between the rich and poor.

To add insult to injury, it appears that wealthy foreign nationals and even British-born tax exiles are making full use of the UK government’s furlough scheme to further line their pockets. Analysis of claimant data released last month has revealed that 750,000 companies will have claimed a grand total of £66 billion by the time the initiative reaches its conclusion in September this year, with many of them non-native and categorically not in need of such a bailout.

As such, the rich – be they Gulf-based, Russian, Lithuanian or anything else – are not just hoovering up all of Britain’s best property and driving up house prices in the process, but actively taking taxpayers’ money from their pockets. In that context, it begs the question: is such a relationship really worth it, for London, her citizens or the wider British public?

coronavirus

Russian COVID cases hit record high as eastern Europe imposes new curbs

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A medical specialist takes care of a patient at the City Clinical Hospital Number 52, where people suffering from the coronavirus disease (COVID-19) are treated, in Moscow, Russia October 21, 2021. REUTERS/Maxim Shemetov/Files

Russia reported a record high number of daily COVID-19 cases and some central European countries imposed fresh restrictions on Monday (25 October), as a new wave of the pandemic gathered pace, write Luiza Ilie, Gleb Stolyarov, Gabrielle Tétrault-Farber in Moscow, Jason Hovet in Prague, Tsvetelia Tsolova in Sofia, Bart Meijer in Amsterdam, Lidia Kelly in Melbourne, Roxanne Liu, Ryan Woo and Gabriel Crossley in Beijing, Shashwat Awasthi in Bengaluru and Alan Charlish.

In Asia, the Red Cross called for urgent help for Papua New Guinea and China's latest outbreak forced the capital Beijing to delay its annual marathon and step up other curbs, less than four months before it hosts the Winter Olympics.

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Authorities around the world have been sounding the alarm as infections surge, with governments in regions where vaccine uptake has been low forced to toughen up restrictions in a bid to stop the virus raging out of control.

"The pandemic is far from over. Complacency is now as dangerous as the virus. Now is the time to be on heightened alert, not to let down your guard," World Health Organization Director-General Tedros Adhanom Ghebreyesus said on Monday.

Russia on Monday reported 37,930 new COVID-19 infections in the last 24 hours, its highest in a single day since the start of the pandemic, as well as 1,069 deaths related to the virus. read more

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Frustrated by the slow take-up of Russia's Sputnik V vaccine by its own population, authorities are introducing stricter measures this week to try to curb the spread of the pandemic.

Some regions imposed a workplace shutdown and from Thursday, Moscow will introduce its tightest lockdown measures since June 2020, with only essential shops like supermarkets and pharmacies open. Moscow schools are also closed, and unvaccinated over-60s in the capital have been ordered to lock down for four months.

Vaccine scepticism is high across central and eastern Europe, and as a result the region has become a hotspot.

Tougher restrictions came into force in Romania and the Czech Republic on Monday, while in Slovakia stricter rules were expanded to more regions. In Bulgaria, police will start imposing fines on people who break restrictions from Monday.

Poland also warned it would consider tighter restrictions.

In Romania, where a deputy minister on Saturday lamented a "disaster situation", the government reintroduced a curfew and made health passes mandatory for entry to most public venues. Read more.

While experts have said that a lack of confidence in public institutions caused by decades of Communist rule has fuelled vaccine scepticism in the region, there were signs that more people were now getting a jab.

In Romania authorities said inoculations were on the rise last week, while in the Czech Republic the daily number of doses administered was the highest since late-August.

The Dutch government also said it may impose new coronavirus restrictions to reduce pressure on hospitals struggling to deal with a swelling number of COVID-19 patients.

Reuters Graphics
Reuters Graphics

The International Federation of Red Cross and Red Crescent Societies warned of the potential for huge numbers of deaths in Papua New Guinea unless international action was taken to help the island nation's struggling health service. Read more.

Less than 1% of the population has been fully vaccinated, according to Our World in Data figures, with the Red Cross blaming misinformation, public apprehension, and logistical challenges.

"Urgent efforts and further support are needed in healthcare to prevent a massive loss of life in the coming days and weeks," Uvenama Rova, PNG Red Cross secretary general, said.

Chinese health officials warned on Sunday that its latest cluster, caused by the highly transmissible Delta variant, was increasingly likely to expand further.

Beijing has banned entry of people from other cities with cases, and closed indoor venues such as some chess and card parlours, even in districts without infections. Although the infection numbers are far smaller than many places outside China, authorities have adopted a zero tolerance strategy.

New Zealand saw its second-highest daily tally of COVID-19 cases since the pandemic began, with 109 new locally acquired coronavirus cases reported on Monday, the bulk of them in its largest city, Auckland. Read more.

Once lauded for its success in stamping out the virus, New Zealand has been struggling with an outbreak of the Delta variant centred in Auckland, despite the city remaining under a strict lockdown for more than two months.

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Climate change

Russia says Putin won't fly to Glasgow, in blow for climate talks

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Russia delivered a blow to hopes of a breakthrough international deal on climate change when the Kremlin said on Wednesday (20 October) that President Vladimir Putin (pictured) would not fly to Scotland for talks starting at the end of this month, write Alexander Marrow, Mark Trevelyan and Dmitry Antonov.

Putin's spokesman Dmitry Peskov said he would take part remotely, but the no-show by the leader of the world's fourth-biggest emitter of greenhouse gases is the latest setback, with Chinese President Xi Jinping and Indian Prime Minister Narendra Modi also uncertain to attend.

Britain, which hosts the 26th United Nations Climate Change Conference of the Parties, or COP26, in Glasgow from 31 October to 12 November, is seeking support from major powers for a more radical plan to tackle global warming.

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The Kremlin had previously announced that Putin would not attend a Group of 20 summit in Rome in person this month due to concerns about the COVID-19 pandemic.

"He will also not fly to Glasgow, unfortunately," Peskov told reporters, saying other Russian representatives would go.

"We need to work out in what format it will be possible (for Putin) to speak via video conference, at what moment," Peskov said. "The issues that will be discussed in Glasgow right now form one of the priorities of our foreign policy."

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Russia is warming 2.8 times faster than the global average, with the melting of Siberia's permafrost, which covers 65% of Russian landmass, releasing significant amounts of greenhouse gases.

Putin said last week Russia would strive to be carbon neutral no later than 2060. He said hydrogen, ammonia and natural gas were likely to play a larger role in the energy mix in coming years and that Russia was ready for dialogue on ways to tackle climate change.

Before the Kremlin's announcement, British Prime Minister Boris Johnson told investors on Tuesday there would be a good attendance at COP26. "It looks like a lot of people are going to be able to come in person," he said.

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NATO

Russia warns NATO any move on Ukraine will have consequences - report

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Banners displaying the NATO logo are placed at the entrance of NATO headquarters during the move there, in Brussels, Belgium. REUTERS/Yves Herman/File Photo

Moscow has warned NATO that any move towards Ukraine's membership in the bloc will have consequences, the RIA news agency quoted Russian Deputy Foreign Minister Andrei Rudenko as saying on Thursday (21 October), write Maxim Rodionov and Olzhas Auyezov, Reuters.

RIA said Rudenko had been asked about US Defence Secretary Lloyd Austin's comments on a visit to Ukraine this week when he said that Washington supported Kyiv's aspiration's to join the transatlantic alliance and that no country could veto such a move.

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