Reuters logo
Housing refugees is big business for Swedish pop tycoon
September 24, 2015 / 2:06 PM / 2 years ago

Housing refugees is big business for Swedish pop tycoon

A file picture of Swedish entrepreneur Bert Karlsson outside his refugee centre in an old sanatorium in Stora Ekeberg, near Skara, Sweden taken December 19, 2013. REUTERS/Adam Ihse/TT News Agency

STOCKHOLM (Reuters) - A Swedish pop music tycoon turned TV celebrity who once founded an anti-immigration political party might well be the most unlikely beneficiary of Europe’s migration crisis.

But as long as the country is taking in the most asylum seekers per capita of any in Europe, Bert Karlsson is happy to earn a fortune from the government for housing them.

Sweden’s answer to Simon Cowell, Karlsson founded a record label and later appeared as a ubiquitous judge on reality TV talent shows.

He launched an anti-immigration political party that briefly held the balance of power in parliament before flaming out in the mid-1990s, and still says Sweden needs to spend less on migrants.

But that hasn’t stopped his company, Jokarjo, from housing around 5,000 migrants at 30 sites, becoming the leading supplier of temporary asylum seeker housing to Sweden’s government, a business he expects to double this year after tripling in 2014.

“I‘m the best in Sweden at entrepreneurship,” he proclaims, sounding a bit like Donald Trump, a figure whose anti-establishment moxie he says he admires, as he speeds from his native town Skara to his first and biggest site for refugees.

The venture is a reminder that the European migration crisis is also big business, from the Turkish market traders selling life vests on the beach in Bodrum, to the Balkan coach operators selling bus tickets from border to border.

With one hand driving his Saab - plastered with stickers from his lakeside summer resort - and the other holding an iPhone discussing business, Karlsson says he spotted the need for immigrant housing early and set out three years ago to provide it at half the price the state was paying at the time.

Sweden, a country of just 9.8 million people, received 81,000 refugees last year and is on course to top that this year. The government has penciled in 40 billion Swedish crowns ($4.8 billion) to spend on immigration and integration, around 4 percent of Sweden’s total budget for 2016.

Having run out of apartments for asylum seekers, the Swedish Migration Agency has been paying companies to house them in buildings like unused hotels and hostels.

The growing field has attracted some of the country’s major names, including the Wallenbergs, Sweden’s most prominent industrialist family. But none has taken a bigger slice of the pie than Karlsson’s Jokarjo, which billed the migration agency 170 million crowns for temporary shelter so far this year alone, more than three times as much as its biggest competitor.

The migration agency believes housing for asylum seekers will cost 3 billion Swedish crowns this year, not including the cost of looking after unaccompanied children.

CHILDREN

Stopping in a cafe to down three cups of coffee while trading stocks over the phone, Karlsson chatted to an Iranian immigrant working at the cashier’s till. He ended up offering him a job, either at one of his asylum homes or his food plant.

Residents waved as Karlsson arrived at Stora Ekeberg, a former sanatorium in the countryside which now houses more than 500 immigrants from countries such as Syria and Iraq.

Inside, children from Somalia were playing table tennis, while other residents worked out in the gym. Corridors and spaces were clean and the atmosphere relaxed.

Despite the money he has earned off Sweden’s well-publicized generosity to immigrants, he was still critical of the lavish government expenditure.

“If they want the Sweden Democrats at 50 percent, they should continue on the exact same course,” he said, referring to the rise of the anti-immigration party that became Sweden’s third biggest in elections last year.

Sweden has long prided itself on its reputation for taking in refugees. A former prime minister proclaimed the country a “humanitarian superpower”. Since the civil war began in Syria four years ago it has been out in front of its EU neighbors in offering Syrian refugees immediate permanent resident status and allowing them to swiftly bring family members to join them.

But a growing minority of Swedes say such policies are simply unsustainable.

Karlsson himself has stayed out of politics since his own populist anti-immigration party, New Democracy, collapsed in infighting.

It peaked in the general election of 1991 when it won 6.7 percent of the vote and 25 seats in parliament, the same year that Carola Haggkvist, Karlsson’s biggest musical act, won the Eurovision song contest. Three years later the party lost all of its seats and never recovered.

BALLOONING COST

Karlsson says his company saves Sweden money by housing asylum seekers more cheaply than competitors. He criticized government costs for care for unaccompanied children seeking asylum, which he said he could do at a quarter of the 1,900 crowns per day ($225) the migration agency pays municipalities per child.

More than 12,500 such children have already arrived since the start of the year, more than the agency penciled in for all of 2015 at an estimated cost of 9.1 billion crowns in its latest forecast just two months ago.

Karlsson’s competitors include care provider Attendo, owned by private equity firm IK Investment Partners. Aleris, the healthcare firm owned by the Wallenberg family’s investment vehicle Investor AB (INVEb.ST), operates six homes for unaccompanied asylum seeking children.

In the first eight months of this year, the migration agency paid out 894 million crowns to the 50 biggest suppliers of temporary housing for refugees, already close to the 1 billion crowns for all of 2014. Nearly a fifth of that went to Jokarjo.

“We are satisfied with Jokarjo. We are satisfied with most suppliers,” said Tolle Furugard, who oversees housing for asylum seekers at the migration agency.

“It is often said in the debate that they are unserious dealers just out to make money, but that’s not our view.”

Most Swedes accept the role of private business in housing migrants, but there has been an outcry against exorbitant fees charged to overwhelmed municipalities. The town of Molndal in southwestern Sweden has had to pay around 50,000 crowns per month for one-room apartments for youths in some cases.

“It’s not ok. But it is an emergency solution,” said Marie Osth Karlsson, no relation to Bert, who chairs Molndal’s municipal board.

Having opened five new sites over the previous week, Karlsson said he had 12 additional facilities ready to take on 2,000 or more immigrants over the coming weeks.

One things seems certain - demand will remain strong.

($1 = 8.3491 Swedish crowns)

Reporting by Sven Nordenstam; Editing by Peter Graff and Alistair Scrutton

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below