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| Author: | Bruce Stokes |
|---|
March 1, 2003
National Journal
A tide of humanity flows across the U.S.-Mexican border and slips into Europe across the Adriatic and Mediterranean Seas each year. Such migration imposes costs, and confers benefits, on the developing economies that are the source of this human wave. The costs are in brain drain-the loss of talented and educated workers to the rich countries. The benefits are in remittances-the hundreds of millions of dollars that emigrants send back home once they've established themselves in their new country. The net effect on the developing world of the loss of millions of its citizens to the developed world is still a subject of heated debate among academics. But experts say it is clear that governments in North America and Europe could do more to minimize the damage and maximize the gain from such large-scale movements of people.
"Voluntary migration from a poor to a rich country almost always benefits the migrant," said Kathleen Newland, co-director of the Migration Policy Institute, a Washington think tank. An immigrant "may easily find himself or herself earning in an hour what he or she earned in a day [back home]. The question is whether the benefits to those individuals and their relatives left behind aggregate to a general benefit to the home country."
Migrants almost always send money home. Although the average remittance is often small-about $200, according to estimates for transfers from the United States to Mexico and Central America-it adds up. The World Bank figures that remittances to all developing countries total about $60 billion a year, roughly equal to the total foreign aid rich countries give to poor ones each year. Remittances account for 25 percent of the economy in Nicaragua, 17 percent in Haiti, and 4 percent in Bangladesh. In each of those countries the remittances are a greater economic contribution than foreign aid and foreign investment combined.
The popular image of migrant laborers is of low-skilled people-dishwashers and gardeners-who have no job prospects at home. But the industrial world is draining off more and more of the developing world's best and brightest. The Economist reports that about 30 percent of all highly educated Ghanaians and Sierra Leoneans now live abroad, and three-quarters of Jamaicans with a higher education live in the United States.
The emigration of such highly skilled individuals denies their homelands the benefits of the public funds invested in their educations. And their governments lose the tax revenues that such potential high earners might have generated at home. For India, such brain drain has been estimated to cost up to half a percentage point of annual gross national product.
But stemming the flow of immigration just isn't practicable, most policy makers agree. "Stopping them coming is not a feasible policy option," said Jagdish Bhagwati, an economist at Columbia University. "And you are not going to be able to get people [who are already here] to go back."
From a developing-country perspective, the most important thing rich-country governments could do is to legalize illegal migrants. "If immigrants have no legal status," said Newland, "it is much harder for them to increase their earnings and thus contribute to remittances. And it's tougher for them to come and go."
But in most rich countries, legalizing large numbers of illegal immigrants is a political football. One suggested approach to overcoming political resistance is to establish benchmarks that immigrants would have to meet to earn legal status, based for example on the amount of time they have spent in the country, their employment records, or whether they have set down roots by buying homes. In 2001, this concept was under discussion between Washington and Mexico City before it was derailed by U.S. security concerns after September 11.
Sending money home could also be made easier and cheaper for migrants. The total cost of sending a typical remittance to Latin America can eat up 15 percent of the amount sent, according to research conducted by Manuel Orozco, project director for Central America at the Washington-based Inter-American Dialogue. Reducing that overhead to 5 percent of the amount remitted would effectively add at least $650 million to the funds flowing to some of the poorest households in the region. Some of this could be done by easing regulations on the transfers of funds between countries and making it easier for immigrants to get bank accounts in their adopted countries.
Finally, in the Doha trade negotiations, developing nations are pushing for freer worldwide movement of labor in construction jobs and other services-such as for nurses and computer programmers-so that they can fully exploit their comparative advantage in such work, which is in demand in all parts of the global marketplace. Rich countries could relax their resistance to such initiatives.
These and other fixes, experts say, would go a long way toward easing the cost and maximizing the benefits of the growing tide of humanity pressing to get into Europe and North America.
In The Closing of the American Border, Edward Alden goes behind the scenes to tell the story of the Bush administration’s struggle to balance security and openness in the wake of the September 11, 2001, terrorist attacks.
In Termites in the Trading System, Jagdish Bhagwati reveals how the rapid spread of preferential trade agreements endangers the world trading system.
America Between the Wars explores how the decisions and debates of the years between the fall of the Berlin Wall and the collapse of the Twin Towers shaped the events, arguments, and politics of the world we live in today.
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