ECONOMY - 04 JAN 2016

The Case for Economic Migration

The Case for Economic Migration
Heathrow Airport Terminal 5

In Mark Twain’s The Prince and the Pauper, two nearly identical young boys – one a prince, the other a pauper, temporarily switch places. The novel is memorable for its elementary approach to the rags to riches story: simply move the pauper into the castle. Never a country to miss a literary lesson, many Nigerians have attempted to imitate Twain’s impoverished protagonist, stuffing their lives in a bag and seeking pastures new abroad; by hook or by crook.

Economic migration is an intricate issue that is vulnerable to cultural perceptions, many of them inaccurate. Depending on what part of the world you read this, the phrase “economic migration” might evoke images of Eastern European plumbers, Syrian refugees or young Africans infiltrating slum gangs. For Nigeria, it is made more awkward by historic immigration and emigration routes: first during the slave trade and later, under colonial rule. Now, it assumes greater significance in a superficially globalised world. A world where European borders, until recently, were nearly non-existent; where anti-immigration sentiments have risen since the turn of the decade and the difficulty of travelling within Africa to be one of the continent’s great contradictions.

The most effective development tool in the world

Economic migration – the movement of people from one place to another in the search for a higher standard of living and to improve economic prospects, is the most powerful tool for economic development and the quickest way of ending global poverty. This is because moving a poor person to a rich country automatically boosts their productivity. For example, the primary reason accountants in Nigeria earn less than their counterparts in the United States is not a disparity in skill but in location. Once given the opportunity to move, the poor can escape the conditions that worsen their poverty such as poor infrastructure, adverse weather conditions and limited opportunities. This is consistent with the idea that poverty is a situation more than it is a status. Once removed from that situation, the poor are more likely to prosper.

Another way economic migration will help developing countries is through remittances. Global remittances currently stand at around $586 billion, three times the size of overseas aid. And more migration means more remittances. This is crucial because remittances are more resilient than foreign aid or foreign direct investment and unlike the latter two, tend to rise during economic downturns. In recent times, remittances have played an indispensable role in the survival and growth of many developing countries.

But the real case for economic migration is a global one. A prominent paper estimates the net effect of full labour mobility on global GDP as a 122% increase. Such results are not unusual. In a 2011 review of the literature, the economist Michael Clemens found that open borders of this sort would increase global GDP by 67%-147%. So allowing people to move produces larger efficiency increases than free trade or other significant global policy initiatives. And the economic logic is simple: increased labour mobility means that human capital is allocated more efficiently at the global level.

Closed minds, closed borders

Despite these benefits and an economic movement dedicated to realising them, economic migration remains unpopular. For many critics, economic migration will depress real wages in immigrant countries, create inevitable social and ethnic divisions, and stretch public finances to breaking point. Yet economic evidence has consistently contradicted such arguments, showing that any negative effects tend to be short-term. However, such paranoid sentiments remain powerful and are responsible for the existence of many other developed world controls e.g. capital controls, trade embargoes, visa restrictions etc. The globalisation steam engine has yet to overturn these, despite the best efforts of international organisations such as the World Trade Organisation, World Bank and United Nations. Thus, the concept of open borders looks ahead of its time; controls on money and goods are likely to be lifted first.

Imminent demographic changes in the world’s wealthiest countries may force a rethink in this area. The developing world has an ageing population and will soon be in need of young workers. This has prompted a number of commentators to advance a temporary workers proposal. The rough idea is that labour restrictions should be lifted somewhat to allow migrants to plug skills gaps that will inevitably appear as the workforce ages. Interestingly, this may not rule out the very poor as there may be low skilled labour-intensive industries that are unyielding to mechanisation. This contrasts heavily with the anti-immigration sentiment that currently pervades a number of powerful Western economies and indicates that economic migration will become a more important issue by the middle of this century.

The biggest losers

The current situation, a mesh of shifting and sometimes conflicting rules regarding the rights to migrate, is inefficient and unsustainable. Nigerians are still able to find migration channels but few permit them to be fully immersed into the countries they arrive in. They end up living shadow lives there which is not just detrimental to them but reinforces the negative impression of foreigners, thus worsening the odds of future legitimacy.

Nevertheless, the issue of social integration remains relevant given heightened tensions in Western societies. Today, economic migration continues to pose awkward questions about the rights of citizenship and the fungibility of nations and is constrained by the logistic and financial capabilities of our time. But many of the world’s poor are prisoners of birth, losers in life’s first and most decisive lottery. In a world that condemns discrimination along nearly all dimensions, nationalism continues to thrive. Countries are generally sympathetic towards migrants who seek physical security but remain hard-nosed towards those in search of economic security. So far, the exclusivity of citizenship trumps the natural right to self-determination and free movement, even when the exercise of such rights represents the surest path away from poverty. The economic benefits might eventually convince the world to fully embrace economic migration but to some, the moral case already should have. 


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Kitan Williams

Kitan Williams

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