Transcript Migration benefits for sending countries

Enhancing the Development
Impact of Migration:
Issues and Policy Options
Mr. Luca Barbone
World Bank
February 5, 2009
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Observations on the development
impact of migration . . .
• How and in what ways is migration important for
development?
• What are the costs and benefits of migration for
developing and developed countries?
• What are the strategic choices that countries—
both receiving and sending—are facing
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Four reasons why migration
is controversial
• Migration is not happening uniformly: large numbers of
migrants leave from relatively few countries and move to
selected destinations
• For several developing countries, out-migration involves
a large fraction of the population.
• An even larger fraction of migration occurs between
developing countries themselves, known as South-South
migration
• Some of the largest movements of labor in the world
occurs within countries
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Percentage migrants in population –
U.S. and Europe attract a
large portion of migrants . . .
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. . .while migrant remittances represent a large
portion of GDP in several ECA countries
Remittances Received (% GDP) in ECA, 2007
35
30
25
20
15
10
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Estonia
Serbia
Latvia
Poland
Lithuania
Luxembourg
Croatia
Azerbaijan
Macedonia,
FYR
Romania
Bulgaria
Georgia
Albania
Armenia
Bosnia and
Herz.
Kyrgyz
Republic
Tajikistan
Moldova
0
Note: Remittances comprised of w orkers' remittances and compensation of employees.
Source: IMF Balance of Payments Statistics.
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Emigration rates
Out-migration represents a significant portion
of the population of many countries. . .
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Source: World Bank (2008) and OECD (2008)
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…while the flow of workers into
other countries is significant
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Migration will likely continue
to increase, because:
• Increasing globalization  greater awareness of gaps in
living conditions  clearer incentives for migration;
• Improved access to transportation and communications
 facilitates mobility of individuals
• Enhanced information flows  reduce uncertainty over
migration prospects;
• With a large share of population under 30, developing
country workers are more responsive to migration
incentives;
• Consolidation of diasporas in higher income countries 
facilitates information and social networks required to
migrate.
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Migration benefits for sending countries
• Economic growth through increased foreign
exchange
• Income gains to migrants and reduction in
household poverty
• Investment in human capital
• Gives possibility to investment in business
start-ups if managed properly
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Migration benefits for receiving countries
• Improved economic efficiency and growth
• Increased labor supply (as populations in
developing countries decline)
• Job-creation through migrant entrepreurship
• Slow down in overall wage growth and inflation
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Working-age populations in
developed countries decline . . .
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Key costs related to migration
• Macroeconomic costs: potential for Dutch
disease
• Relocation and other costs to individuals
• Social exclusion and effects on the family
• Deterioration of key social services
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Possible migration strategies
• Focus on the role of the sending country as an exporter
of people, by:
• Specializing in the exporting labor and remiaing competitive in the market for
migrant work
• Financing its external accounts through remittances
• Training workers to match demand from abroad
- OR -
• Focus on making the sending country more attractive to
its citizens, by
• Implementing policy and institutional reforms to make the economy more
competititve.
• Improving the domestic business environment
• Strengthening basic and higher skills training
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Migration issues and the current
global financial crisis
• How is the situation different than in previous economic downturns
– Given global nature of the problem present crises limits potential for
alternatives
– Migrants already returning to home countries where job opportunites have
shrunk further
– Remittances expected to decline
• Possible policy responses
– In the short term, focus on social protection
– In the medium term, agree on innovative measures to better target worker flows
and skills enhancement as host countries demand
• Linkages between stimulus packages and migration
–
–
–
–
Stimulate consumer spending
Job creation
Infrastructure rebuilding
Unfreezing access to credit
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Conclusions
• Close information gaps and increase
understanding of the effects of migration
• Refine agreements between hosting and
sending countries to ensure the fair treatment of
migrants
• Institute innovative policies that better target the
needs of migrants and host countries.
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