People from developing countries and from the countries in transition in Central and Eastern Europe will increasingly seek to migrate into the developed countries of the West unless the developed countries support development strategies based on foreign direct investment (FDI), trade liberalization and aid, warns a study released today by the International Organization for Migration (IOM) and the United Nations Conference on Trade and Development (UNCTAD).
In a joint study, entitled "Foreign Direct Investment, Trade, Aid and Migration"(1) (96 pages), the two international bodies review trends in international economic migration and find that push factors of emigration have reinforced since the 1980s in both developing countries and the former socialist countries. Economic migration is rooted in extreme poverty and living standard differentials between countries.
While high-income and middle-income countries are obviously the main destination of migrants, their admittance capacity is increasingly limited due to mounting un- and under-employment, modest economic growth and the dislocation of jobs. High-income countries are therefore exposed to a growing pressure of irregular migration, which governments have been trying to deter through vigorous action. However, the costs of managing and controlling migrant inflows are high and their effectiveness limited. Forged identity documents, porous borders and large-scale trafficking in migrants do not prevent migrants from poorer countries from entering receiving countries and/or staying over illegally.
A better way to manage economic migration is to generate rapid economic growth in the countries of origin. Broad-based and rapid development will induce potential poverty migrants to stay at home of their own free choice rather than migrate under compulsion. The UNCTAD/IOM study finds that increased flows of FDI and trade, as well as more effective use of development aid, impact directly and indirectly on this process.
Foreign direct investment contributes directly to a reduction of migration through job creation in foreign affiliates and, through an array of forward and backward linkages, in host economies as a whole. Indirectly, FDI contributes to economic development by bringing technology and organizational and managerial know-how and providing origin countries access to markets. FDI can thus generate a sense of hope among potential migrants for a better economic future in countries with insufficient capital but abundant labour.
Such countries can also increase exports by making a dynamic use of the comparative advantage of their low-cost labour. Trade tends to reduce migration through the creation of additional employment and accelerated economic growth in origin countries. The increased tradability of skill- and knowledge-intensive services opens up new opportunities for high-wage jobs in the migrant sending countries and can be expected to induce skilled workers to stay in their country.
Development aid, if targeted towards the economic and social reintegration of return migrants and towards areas of high migration pressure or groups of population with high migration propensity, can play an important role in alleviating migration pressures. Such aid, if properly co-ordinated with overall national economic policies and used to promote human resources development, infrastructural development and stable macroeconomic policies, can also have a positive impact on economic growth and broad-based development.
Governments can reduce disruptive migration
Government policies are central to creating a favourable policy environment conducive to enterprise development and to growth, thus reducing the propensity to migrate. This is exemplified by a number of East Asian countries and earlier by southern European countries which evolved over the years from net sending to net receiving countries.
The study recommends that governments should undertake "migration audits" before taking major economic policy decisions regarding FDI, trade and enterprise development. Furthermore, they could commission studies on national experiences in migration management in selected sending and receiving countries, in particular the experience of countries that have made the transition from net sending countries to net receiving countries. Based on such case studies, a matrix of key variables that can help reduce disruptive migration and make migration movements more orderly should be devised.
