International Migration Impact on Developing Countries: Insights and Solutions

1. Migration and Developing Countries 21 November 2007 Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung Berlin Jeff Dayton-Johnson Johannes Jütting OECD Development Centre

2. International migration and developing countries Roadmap to the presentation: • What do we think we know? • What do we really know? • What can we do? • Concluding remarks

3. Two main messages Good news: Migration can contribute to reduce global poverty Inconvenient news? Development in general nor aid in particular will slow or stop migration... for a long, long time

4. International migration and developing countries What do we think we know? 1 What do we really know? 2 3 What can we do? 4 Concluding remarks

5. 1) What Do WeThink We Know? • International migration is exploding • Canary Islands, boat people: most immigrants to EU/OECD come from poor countries  humanitarian crisis • Brain drain robs poor countries of doctors, nurses and teachers • Remittances: No need for aid any more

6. International migration and developing countries What do we think we know? 1 What do we really know? 2 3 What can we do? 4 Concluding remarks

7. 2 ) What do we really know • Size, trends and composition of migrants • intra-OECD migration • skill levels and destination • Brain drain versus brain gain • Remittances – substitute or complement to aid • Development policies – can they stop emigration?

8. International migrants as a share of population Source: United Nations.

9. Origin of migrants to EU-15 Asia (7.0 per cent) India: 1.8 Pakistan: 1.2 Vietnam: 0.8 China: 0.7 Indonesia: 0.6 Bangladesh: 0.5 Philippines: 0.5 Sri Lanka: 0.4 Hong Kong: 0.3 Japan: 0.2 Wider Europe (16.4 per cent) Turkey: 5.8 Croatia: 1.0 Serbia-Montenegro: 2.2 Russia: 0.7 Albania: 1.7 Bulgaria: 0.3 Romania: 1.6 Lithuania: 0.3 Ukraine: 1.4 Belarus: 0.3 Bi-H: 1.1 Latin America (4.4 per cent) Ecuador: 0.7 Colombia: 0.7 Suriname: 0.6 Brazil: 0.6 Argentina: 0.5 Jamaica: 0.4 Venezuela: 0.4 Peru: 0.3 Chile: 0.2 EU-15 Intra-EU migration: ABOUT HALF Africa (13.6 per cent) Morocco: 4.5 Nigeria: 0.4 Algeria: 3.9 Senegal: 0.4 Tunisia: 1.3 Somalia: 0.3 Angola: 0.6 Ghana: 0.3 South Africa: 0.6 Dem. Republic of Kenya: 0.4 Congo: 0.3 Egypt: 0.4 Mozambique: 0.2 Source: OECD Database on Expatriates and Immigrants, 2004/2005

10. Skill level of migrants to Europe and North America Source: OECD Database on Expatriates and Immigrants, 2004/2005

11. Where do low-skilled migrants in the OECD come from? Source: OECD Database on Expatriates and Immigrants, 2004/2005

12. The Migration Cycle • Migration affects development in three ways (+/-): • Changes in labour supply • Receipt of remittances • Changes in productivity • The relative importance of each effect varies over the migration cycle Source: OECD (2007)

13. Skill levels and poverty reduction • Low-skilled mobility raises wages or reduces unemployment/underemployment • The low-skilled remit more • Circular mobility • Unaccompanied by family members • Shorter stays • Closer to home • Remittances by the low-skilled have a larger poverty-reduction impact

14. Brain drain: gains and losses • Brain gain for some countries • Incentive for quality improvement in the educational system • No chance to work in qualified jobs • Returning “brains” • Brain drain hits the poorest developing countries hardest! Source: OECD (2007)

15. Brain Drain: A Problem for the Poorest Countries Source: OECD Database on Expatriates and Immigrants, 2004/2005; Cohen and Soto (2001)

16. Remittances matter…. Money sent home annually, per migrant (2000) Source: IMF Balance of Payments Statistics; UN Trends in Migrant Stock, 2000.

17. …. mostly used for consumption Uses of remittances, Mexico 2000 percentage 78.0 7.0 5.0 4.0 1.0 Saving Other Cons. Investment Consumption Goods Education Source: Fomin, Pew Hispanic Center

18. Remittances and aid: complements, not substitutes • Remittances tend to finance consumption: often productive (consumer durables, house improvement, education, health) • Incipient schemes for community investment of remittances (e.g. Tres por uno, Zacatecas, México)

19. Will development slow migration? How it works: • Poor countries specialise in production and of goods that use labour intensively • New jobs created in export sector, absorbing would-be migrants • Outsourcing

20. Probably not • Adjustment is a long-term process • Demographic factors will slow it further • “Migration hump” hypothesis; with prosperity, more emigration • Pitfalls of using aid to influence migration

21. Summing up • Humanitarian crisis/illegal migration only part of the inflow • Brain drain – more complex; some countries gain by exporting • Remittances good, but not good enough • Complex interaction: development - migration

22. International migration and developing countries What do we think we know? 1 What do we really know? 2 3 Whatcanwe do? 4 Concluding remarks

23. 3) What Can We Do? More coherent policies for more effective mobility management • Look at migration policies through a development lens • Look at development policies through a migration lens

24. Migration policies througha development lens More flexible options for migrants and employers, including • Smart labour-market access policies to allow legal circular mobility • Creating paths to naturalisation/citizenship for longer-term migrants • Reducing remittance costs and increasing access to the financial system • Co-developpement: engaging diasporas

25. Development policiesthrough a migration lens For sending countries, integrate migration into national development strategies. • Macroeconomic policies (tax revenues, exchange rates…) • Human resources and higher education policy • Infrastructure investment (transport, communications) • Dealing with the informal sector

26. International migration and developing countries What do we think we know? 1 What do we really know? 2 3 What can we do? 4 Concluding remarks

27. 4) Concluding remarks • Migration an integral part of globalisation • Creating more awareness of the development – migration nexus • Striving for policy coherence • Not raising false hopes, promoting realistic solutions

28. For more info: www.oecd.org/dev/migration

29. Vielen Dank !Thank you for your attention !

30. What about illegal immigration? • Estimates of illegal immigrants for selected countries: • United States: 10.5-12 million (3.5-4% population) • Netherlands 125 000-230 000 (0.8-1.4 % population) • Switzerland 80 000-100 000 (1.1-1.5 % population) • Greece 370 000 (3.4% population) • Overstaying often more common than fraudulent entry or sea landings • Italy, 2005 estimates: 60% “overstayers”, 25% entered with false documents, and 14% entered by sea landings in southern Italy Source: International Migration Outlook 2006, 2007

31. Estimates of the Irregular Migrant Stock * = Subsequent regularisations not accounted for in these estimates. Source: OECD 2005.

32. Costs of transfers to Mexico Costs of remittances to Latin America * (%, for 200 USD) (%, 200 USD) 13.0 12.1 11.3 10.6 8.9 8.6 9.2 8.2 7.9 7.3 7.3 7.3 6.9 8.1 6.4 7.3 5.8 7.4 5.6 5.4 2002 2003 2004 2000 2001 Source: Pew Hispanic Center Peru Haïti Bolivia Cuba Mexico Jamaica Ecuador Colombia Average Honduras Nicaragua Guatemala Dominican Venezuela Rep. El Salvador * From USA; 2004 Source: PEW Hispanic Center Transfer costs high