In Observance of International Migrants Day (December 18)
Migration, like global warming, is a hot topic. It is also equally if not more controversial: while a global consensus seems to be emerging on addressing climate change, views on migration seem to be diverging.
People have always migrated in search of a better life. According to the United Nations, there are around 281 million international migrants including 30 million refugees. The COVID-19 crisis has all but stopped new migration while return migration is rising. So, the stock of international migrants seems to have fallen somewhat during the past two years but there are strong reasons to believe the fall has been temporary, because migration pressures continue to be strong due to income gaps, demographic imbalances, and climate change. During 2013–17, the average income in the high-income OECD countries was $43,083, compared with $795 in the low-income countries, a ratio of 54:1. Even if the latter were to continue to grow faster than the former, at current growth rates it would take 135 years to close the income gaps. Low- and middle-income countries (LMICs) are on track to add over 400 million working-age persons to their population. A significant number of these persons would find it hard to get jobs, and even if they do, the incentive to migrate (which could raise incomes rather dramatically) would continue to remain strong. In addition, climate change could displace millions of persons. Technology is changing, and the feasibility of providing many services remotely could lower the demand for workers and further raise barriers to immigration even as the pressures to migrate are rising. In the end, no physical barriers can stop people from moving. At the margin, the flow of migration, both across and within countries, could be slowed, but it cannot really be stopped.
So,. The policy framework would then naturally shift toward harnessing the benefits of migration for the destination and the origin countries.
Migration provides a great way for sharing prosperity between places. In recent years, our understanding of the benefits of migration to origin countries has greatly improved. In 2021, remittance flows to LMICs are on track to reach $589 billion, larger than foreign direct investment and official aid. In addition, migration benefits origin countries through facilitation of trade, investments, transfer of skills, knowledge, and technology.
But there is, regrettably and against cutting-edge research, less of a consensus on the benefits of migration to destination countries. Notwithstanding a steady flow of academic evidence to the contrary, there continues to be a misguided and anecdotal perception of immigrants displacing jobs for native-born workers and causing congestion, rising housing prices, and fiscal burden. That immigration increases the supply of labor, expands the availability of scarce skills, enhances entrepreneurship, creates businesses and jobs, and increases the size of the economic pie is often ignored in shaping public opinion. The fear of “losing jobs to migrants” is a post-modern version of “lump labor fallacy,” well known from discussions on retirement age where the retirement of older workers was – completely erroneously – seen as making room for young workers.
What roles can the governments of sending countries and host countries play in promoting safe and regular migration? Arguably, there is much more to be done in destination countries in cushioning the “shock” of an unexpectedly large influx of people. Countries and communities in such situations need external support, not just moral support, but real financial help.
They need to keep remittances flowing, by protecting migrants from “wage theft” (aka wage discrimination) by employers and supporting their access to banking and other financial services, including digital social transfers. Origin countries experiencing larger-than-expected return migration also need financial support from the global community to facilitate safe and productive returns.
Global partnerships are needed, backed by a Concessional Financing Facility for Migration. That’d require, inter alia, innovative, private sector financing (e.g., diaspora bonds) to complement official financing. In the World Bank Group, we are working hard to support countries to implement safe and regular economic migration.
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