Migration-Development Nexus

Question 1

What is the Migration and Development Timeline:

Answer 1

¥ 1950s-1973: IM as driver of industrialisation and capitalist development in sending and receiving countries
¥ 1973-2000: Dominant pessimism. Migration doesn’t stimulate, but undermines development in sending countries (brain drain, remittance dependency, “Dutch disease”)
¥ Since 2000: Rapid turnaround of views under influence of surging remittances and key actors in ‘development community’ (GCIM, World Bank, DfID)

Question 2

How does Developmental differences influence migration:

Answer 2

• Studies in 2000 show that the median wage levels for works in the same occupation were 21% in low income economies compared to high income countries

Question 3

What is the impact of migration on development?

Answer 3

• In sending countries depends on:
o Demographic characteristics of those who leave
o Skills characteristics (brain drain)
o Whether they return (brain gain), etc.
o Use of remittances (whether they send back money (and what for), etc.)

Question 4

Explain Brain-Gain argument

Answer 4

• Emigration as an economic ‘safety valve’
• Return-migration can serve economic development as experiences and resources gained are applied in the source country
• Emigration prospect as an incentive to invest into education, not all will move (Stark)
• Phillipines development model, training nurses for the international medical market, and this has positive domestic side effects, raises education level as Stark suggests

Question 5

Explain Brain-Drain Argument

Answer 5

• Developing countries loose some of their brightest and most qualified workers
• Developing world subsidises the training of workers for the developed world (e.g. doctors and nurses)
- Are immigration controls in the interest of countries of origin?
• 74% of foreign born doctors, and 65% of nurses in OECD countries originate from non OECD countries
• Over half of the doctors trained in developing countries currently work in OECD countries
• phenomenon of OECD countries recruiting medical personel from poorer development countries

Question 6

What is the role of Aid in Reducing Migration Pressure?

Answer 6

• Effectiveness of foreign aid has been questioned
• ODA payments are made for a variety of reason (colonial ties, strategic considerations, kick backs for domestic industries, etc.)
• generally not believed to be very effective in reducing migration (small size, difficulties in targeting, etc.)
• UN Targets: 0.7 percent of GDP (regularly met only by NL, DK, SWE and NOR)

Question 7

Role of Investment and Trade in Development

Answer 7

• FDI is short term oriented and isn’t a long term sustainable development goal
• FDI results in Capital flight and doesn’t boost domestic enterprises or DRM
• Role of Trade in Development
• trading in goods can substitute for economically motivated migration
• But: main import restriction in industrial countries are on labour-intensive products in which the developing world has a comparative advantage
• trade liberalisation can lead to labour displacements in the short term (the ‘migration hump’)
• NAFTA

Question 8

NAFTA US-MEXICO Case Study

Answer 8

• NAFTA triggered a large inflow of U.S. government- subsidized corn into Mexico.
• U.S. government subsidy to corn producers: $4.2 billion per year
• Cheaper, imported corn depressed the price of domestically-produced corn in Mexico by 48%.
• Widely seen as having been responsible for large- scale job-losses by Mexican farm-workers and increased migration pressures
• Overnight with Nafta trade liberalization, mexican small scale corn producers had to compete with heavily subsidized large scale corn producers in the US
• Ironically, some of those farmers losing their jobs in Mexico irregular migrated to the US to work in farms
• A lot of people have put a lot of faith in remittances when considering the migration-development nexus
• Remittances treated as the most promises for development in sending countries

Question 9

• What is migration hump?

Answer 9

• In the early years of a trade liberalization agreement you might have economic disruptions that might lead to people losing their jobs
• When disposable incomes of individuals increases, this might actually enable people that weren’t previously able to migrate, to migrate
• When you think about this interms of electoral cycles, that’s a long time that policy makers aren’t willing to engage in, their measures have to be time effective

Question 10

What is the role of the Diaspora in development

Answer 10

• Individual migrants and diasporas can contribute to home country development
o financial (remittances, investment, trade, entrepreneurial activity, skills and knowledge) and
o Important source of finance for countries of origin
o Estimated to be significantly larger than official foreign development aid
o Question about the productive capacity of such financial flows
o Do they produce sustainable growth opportunities or just new dependencies?

o non-financial (knowledge transfer, political, social and cultural exchange, and support for democratization and the protection of human rights)

Question 11

• Estimates of Remittances

Answer 11

• WB Estimates that remittance flows annually exceeded 500b dollars a year, but the official statistics might underestimate what is happening because it isn’t all official channels to transfer payments
• We often think remittances are north south payments, but there are interregional transfers going on
  ♣ A collective attempt to try to force transfer companies to try to reduce their transfer fees in the early 2000s late 90s which were over 25% and decliend to anaverage 10-15% in 2001-2007 in US Mexico

Question 12

What are the positive impacts of remittances

Answer 12

• Evidence from household surveys shows that remittances reduce poverty
• Remittances also finance education and health expenditures, and ease credit constraints on small businesses
• Poverty alleviation, WB estiamtes in some countries like Uganda, the share of poor people in the population have reduced by 11% points as a result of remittance, 6% in Bangeledesh
• Remittances not only used for consumption but for the things listed above

Question 13

What are the limitations and risks of remittances?

Answer 13

• Large remittance flows may lead to currency appreciation and adverse effects on exports
• Remittances may create dependency
• Remittance channels may be misused for money laundering and financing of terror
• Too few remittances are used for ‘investment’ purposes

Question 14

How are remittances used in south?

Answer 14

• One of the early studies show that remittance used for immediate consumption
• Consumption not useful for domestic development unless its local products
• Productive investment were marginal in these studies
• Some countries have responded to this with the 3x1 program

Question 15

What is the 3x1 mexican remittance program

Answer 15

• The Mexican 3x1 Program for Migrants is a matching fund scheme
• Program seeks to direct the money sent by hometown associations abroad (collective remittances) to productive uses
• The federal, state and municipal governments contribute to the program multiplying by three the contributions sent by migrants abroad.
• Question that still remains, is about additionality, to what extent is the mexican government able to use private resources that they would have been solely responsible for

Question 16

Is Migration the panacea for development?

Answer 16

• Despite their often considerable benefits for individuals and communities, migration alone cannot remove more structural development constraints.
• Migration and capabilities: Migration generally increases capabilities of migrants and their families – but also gives migrants the choice to either invest or to disengage from social and economic life in origin countries.
• Positive’ impacts (e.g., poverty, living standards, education, health) can be celebrated as ‘self-help’ development but also point at states’ failure.

Question 17

What are important questions going forward about migration/development

Answer 17

• Triple Win’ scenario only under certain conditions
• Concern remains about brain drain and dependencies
• Need for better strategies to
o Maximise ‘brain gain’
o enhance the role of economic and social remittances

Question 18

What does Skeldon Argue?

Answer 18

• The movement of health professionals may be central to any understanding of brain drain, this migration of the skilled is likely to continue
• Five countries - haiti, cape Verde, Samoa, Gambia and Somalia - are estimated to have lost more than half of their university-educated professionals ‘in recent years’
• The UK is estimated to have more skilled migrants overseas than any other country, at 1.4 m in 2000
• The impact that this migration has on the development of countries of origin is not so clear
• Policy options
- Direct attempts to control the movement of the skilled is counterproductive. Attempts to control or limit skilled movement may force them to seek informal channels of migration through which they cannot practice their skills legally in destination economies
• Issue of compensation: idea that the developed world recompense the developing world for the skills obtained
• Policies that seek to draw on the diaspora are likely to meet with greater success where the development potential of the origin area is high and where it is combined with liberal policies towards the private sector by origin governments

Question 19

What does Hein De Haas argue about the migration-development nexus?

Answer 19

• The debate on international South-North labour migration tends to be one sided because of its one-sided focus on the interests of and consequences of migration for ‘receiving’ societies
• Useless to think that migration can be halted or that aid and trade are short-cut solutions to immigration
• Migration policies pursued by most Western states often tend to decrease the potential contribution of migration to enhancing welfare and well-being in both the sending and the receiving societies
• Relationship between migration and development is a reciprocal relationship
• Migration Myths

Question 20

What are the Migration Myths Hein De Haas Discusses?

Answer 20

1. We live in an age of unprecedented migration
2. Poverty and misery are the root causes of labour migration – a certain level of socioeconomic development and a relative deprivation in the form of global inequality of development opportunities contributes to migration
3. Development policies, development assistance and trade liberalisation are an effective remedy against migration
4. Brain drain - Not all migrants are highly skilled, only massive in a minority of countries, can exist alongside brain gain
5. The money migrates remit to sending countries is mainly spent on conspicuous consumption and non-productive investments
6. The orientation of migrants towards their countries of origin is an indication of the lack of social and economic integration in the receiving countries’ societies
7. States are able to manage, largely control or stop migration

Question 21

What Does Collier argue?

Answer 21

1. Argues remittances aren’t substantial
2. Brain drain reinforced by motivation drain, motivated people are a minority
3. Skilled and ‘motivated’ workers ‘leave behind’ the others
4. “Poverty persists because of weak political institutions, dysfunctional social attitudes, and a lack of skills”

Question 22

How does Sandefur respond to Collier?

Answer 22

1. Empirically, the alleged “brain drain” from poor countries does not exist
   - In the low-income countries with the highest levels of skill emigration, the stock of skilled workers left behind is going up, not down.
2. Emigration is not an alternative to other drivers of development, it is a cause.
3. There is zero evidence that trapping skilled workers in places with few skilled jobs will generate growth