Anti-Islamism as Impediment to Growth

Are Denmark’s strict immigration policies to blame for its recent lack of economic growth?

For almost ten years, Denmark has enacted policies that limit immigration and promote the integration of ethnic minorities in Danish society. Some now fear that the country’s economic woes can be attributed, at least in part, to its Islam backlash.

Since the start of this decade, Denmark has been ruled by a minority government of liberals and conservatives, sustained in parliament by the Dansk Folkeparti (Danish People’s Party) which is known for its nationalistic, socially conservative platform and tough positions on law and order. Since it first participated in the country’s parliamentary elections in 1998, the party’s popularity has risen sharply to stabilize at a little over 13 percent of the vote in recent years.

Under the People’s Party’s influence, Denmark’s ruling coalition has approved of different measures meant to curb immigration to the country, including the enforcement of laws that were designed to prevent marriages from being arranged and forcing migrants to learn the Danish language.

The Islamic community in Denmark comprises no more than 4 percent of the population. Anti-immigration sentiments, particularly aimed at the Muslim community, have grown more fierce in recent years nonetheless and the country became focus of widespread Muslim discontent in 2005 when a Danish newspaper printed several caricatures of the Prophet Muhammad. Danish diplomatic missions in the Middle East were scorched; Danish products boycotted; one of artists who drew such a cartoon, Kurt Westergaard, was threatened.

Denmark’s economy is open and competitive despite strict immigration criteria and is ranked, according to the 2010 Index of Economic Freedom compiled by the Heritage Foundation and The Wall Street Journal, among the freest in the world. Although Denmark’s banking sector, due to prudent lending practices and sound oversight, emerged from the global financial meltdown relatively untouched, the country has not escaped the effects of the recession entirely. The economy on the whole contracted with almost 5 percent in 2009 while unemployment currently hovers around 6.5 percent.

Denmark is very reliant on foreign trade and investment but lack of immigration freedom is hardly to blame for its problems today. Rather, the foremost weaknesses of Denmark’s economy are high government spending, amounting to more than 50 percent of GDP; its pervasive welfare state and the high personal and corporate tax rates necessary to sustain it.

Another country currently governed by a coalition of nationalists and conservatives, Switzerland, does even better economically. The small Alpine country’s openness to commerce has enabled it to become one of the world’s most competitive and flexible economies, no matter recent anti-Islam policies as a ban on the construction of minarets.

In the Netherlands, a coalition similar to the Danish, of liberals and Christian Democrats, supported by the rather xenophobic and socially conservative party of Geert Wilders, is likely to emerge from the political deadlock caused, in part, by the concern of prominent conservative leaders that the Dutch economy, similarly dependent on international trade, though particularly with Germany, could suffer under such a government composition. In reality, as in Denmark, the greatest impediments to growth are high government spending and a tax regime that is both burdensome and complex.

In no case has there been evidence of tough immigration laws or the rhetoric of a few causing economic contraction or a decline in exports or investment. Immigration can, on the other hand, contribute to growth. There is ample evidence of this statement, particularly in the form of the United States; a nation that continues to attract talent from all over the world. It would be unwise for any country to close its borders entirely, if not immoral. But warnings of economic catastrophe awaiting those states governed, if only in part, by anti-immigration or anti-Islamic parties are probably unsound.