Published on People Move

Migration megatrends – rooted in development

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Migration has to happen, is happening, and will happen. We have to find ways to manage it and harness its benefits. Competition for skilled workers will increase even as there will be a need for creating more jobs for all.

There are nearly 1 billion migrants – 1 out of 7 people in the world. Of this about one-fourth, a quarter of a billion people are international migrants. Of the international migrants, south-south migration is larger than south-north migration.

International migration, especially south-south migration, is set to grow. As economies grow, the competition for specific skills will increase, necessitating mobility of people across international borders. Demographic pressures – the aging population in many rich countries and the addition of over 1.5 billion people to the work force in Africa and Asia – will increase the pressure to create and find jobs in the global labor market, especially adding to south-south migration. Environmental change will add further pressures.

Migration is beneficial for migrants, their families in sending countries, and their employers in the receiving countries.

Over 90% of international migrants are voluntary, economic migrants. (The share of economic migrants is even higher in the case of internal or south-south migration.) Nine out of 10 migrants are typically employed by an employer, and get compensated for services provided. In this arrangement, the employer gets scarce services at an affordable price. The migrant earns a livelihood and sends money home to the country of origin. The employer, the receiving country, the migrant and his/her family back home, the country of origin – all benefit from this arrangement.

In the receiving country, migrants provide scarce labor, much-needed skills, business investments, innovation and entrepreneurship, pay taxes, purchase goods and services, and bring diversity. They can also pose challenges of integration, but the work place – the labor market solution - is perhaps the best place for effective integration. In the sending country, the benefits accrue in the form of remittances, trade, investments, philanthropy, skills, knowledge and technology transfer, tourism, values and advocacy. The large size of remittances (over $400 billion annually), their counter-cyclicality and insurance effects, beneficial impacts on poverty, education and health is well documented. The potential for tapping diaspora savings (also estimated to be nearly $500 billion) for financing for development is less understood, but surely there.

Even a sudden surge of asylum seekers may require long-term development solutions.

Migration is a natural accompaniment of the development process, and it gets accentuated when major developmental gaps emerge between countries or geographic regions. If the natural process is hindered by policies of controls, labor and commodities markets become segmented, and developmental gaps emerge and persist. When developmental gaps become large, they may give rise to resentment among people feeling left out, and extreme reactions including social and political conflict can emerge. If the conflict then causes exodus of people and asylum seeking, as in the case of Syria recently, the short-term fix is of course to help the people, but it is important to remember that the root cause was likely persistent developmental gaps, and there should be efforts to address the issue of long-term development.

(GIZ’s Eschborn Dialogue 2014, with the theme “World in Motion: Mobility, Migration, Digital Change”, concluded last week. This is a summary of my intervention in a panel on international migration and development.)


Dilip Ratha

Lead Economist and Economic Adviser to the Vice President of Operations, Multilateral Investment Guarantee Agency, World Bank

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