By Christine Lagarde, Managing Director, International Monetary Fund

This article originally appeared on the iMFdirect blog on November 11, 2015:

As the Group of Twenty leaders gather in Turkey this weekend, they will have on their minds heartbreaking images of displaced people fleeing countries gripped by armed conflict and economic distress.  The surge of refugees in the last few years has reached levels not seen in decades. And these numbers could increase further in the near future. 

The immediate priority must be to help the refugees—who bear the heaviest burden, and too often tragically—with better access to shelter, health care and quality education.

Many of the countries neighboring conflict zones—which have welcomed most of the refugees—have stretched their capacity to absorb people to the limit. To support additional public services for refugees, they will require more financial resources. The international community must play its part. With the IMF’s support, for example, Jordan has been able to adjust its fiscal targets to help meet this need.

Those countries that have done most to welcome displaced people are to be commended. Some countries have been willing to receive large flows of refugees and done their utmost to provide them with food and shelter. Others, especially among advanced countries, should look at how they might increase their scope for admitting more refugees.

Ultimately, however, one thing is very clear: no country can manage the refugee issue on their own. We need global cooperation.

Migration’s economic implications

Cross-border migration, of course, comes in several forms. It includes both refugees who are forced to leave their country and economic migrants who voluntarily leave in search of opportunities. This total number of migrants has risen significantly in recent years, now accounting for over 3 percent of the global population.

Regardless of the motivation, the decision to uproot and leave one’s home is difficult and can be risky. But once people pass through the journey, resettle, and find stability, migration can—with the right policies—have an overall positive economic impact: for migrants, their host country, and their country of origin (as shown in staff analysis).

Migrants can boost a country’s labor force, encourage investment and boost growth. Preliminary IMF calculations show a modest positive impact on growth from migrants in EU countries, for example.

More importantly, migration can also help address the challenges from aging populations in a number of advanced countries. Over the medium term, our research shows that migrants could help reduce pressures on pension and health spending; and in the near term, the net budgetary impact tends to be relatively small.  

Brain drain and remittances

What about countries experiencing an outflow of migrants?  Certainly, these countries often lose their youngest and brightest, with important implications for growth. This has been the case in Caribbean countries, for instance, which lost over 50 percent of their high-skilled labor between 1965 and 2000.

Remittances help to counterbalance some of these effects.  Indeed, they can be a very important source of income—which has been shown to lead to higher education and health spending.  In 2014, remittance flows to developing countries amounted to $436 billion, more than half of total net foreign direct investment and well over three times as much as official development assistance.

Moreover, if the transaction costs of remittances could be lowered further, even greater benefits would accrue.  Estimates suggest that reducing remittance costs to one percent of the amount transferred could release savings of $30 billion per year, more than the entire bilateral aid budget to sub-Saharan Africa!  We should strongly support the G-20’s commitment to reduce remittance transaction costs.

Policies to better integrate migrants

The key challenge is to facilitate the smooth integration of newcomers—whether economic migrants or refugees. No doubt, there will be hardship and difficulties at the outset, whether logistical, fiscal, or political, but these need to be weighed against the benefits that accrue over the medium to longer term. Easier said than done—but it canbe done.

What does a well-designed integration policy include?

• First, strengthening the ability of labor markets to absorb migrants—by enabling immediate ability to seek work and providing better job matching services.

• Second, enhancing access to education and training—by providing affordable education, language and job training.

• Third, improving skill recognition—by adopting simple, affordable and transparent procedures to recognize foreign qualifications.

• Finally, supporting migrant entrepreneurs—by reducing barriers to start-ups and providing support with legal advice, counseling and training.

In Sweden, for instance, an introduction program for refugees provides employment preparation and language training for up to 24 months, together with financial benefits. The program is beginning to help the latest inflow of refugees to find jobs—even though it will inevitably take time to fully succeed.

A global call

Demographic forces, globalization, and environmental degradation mean that migration pressures across borders will likely increase in the coming decades.  And cross-border challenges demand cross-border solutions.

Global policy efforts, therefore, must focus on better cooperation and dialogue among the affected countries. This includes promoting fair burden-sharing, facilitating remittance flows, protecting labor rights, and promoting a safe and secure working environment for migrants.

The IMF will also do its part, including through our financing and capacity building. In addition, over the next few months, our analysis on this issue will feed into our policy advice to countries in Africa, Europe and the Middle East dealing with massive population movements.

Migration is a global issue. We must all work together to address it.

 

Christine Lagarde is Managing Director of the International Monetary Fund. She was appointed in July 2011. A citizen of France, she was previously French Finance Minister from June 2007, and had also served as France’s Minister for Foreign Trade for two years.

Ms. Lagarde also has had an extensive and noteworthy career as an anti-trust and labor lawyer, serving as a partner with the international law firm of Baker & McKenzie, where the partnership elected her as chairman in October 1999. She held the top post at the firm until June 2005 when she was named to her initial ministerial post in France. Ms. Lagarde has degrees from Institute of Political Studies (IEP) and from the Law School of Paris X University, where she also lectured prior to joining Baker & McKenzie in 1981.

By Sam Jones, The Guardian

This article originally appeared in the October 7, 2015 edition of The Guardian:

The large-scale migration of people from poor countries to richer ones will “reshape economic development for decades” but could help end extreme poverty and increase global prosperity if the flow is properly harnessed and regulated, according to the World Bank.

The global monitoring report 2015/16, published at the start of the bank’s annual meeting with the International Monetary Fund (IMF), notes that the world is undergoing a major demographic shift as population growth slows in developed countries but continues to rise in some less developed ones.

Although the demographic changes vary from country to country, the overall trends are stark: while more than 90% of global poverty is concentrated in lower-income countries where populations are young and fast-growing, more than 75% of global growth occurs in higher-income countries where women have fewer children, where there are fewer people of working age and where the proportion of elderly people is on the increase.

Jim Yong Kim, president of the World Bank group, said the current era of demographic change could prove to be “an engine of economic growth” if the right policies were in place to facilitate migration.

Read the full article

Improving asylum seekers’ access to legal residency, labour markets, and social safety nets can help wealthy countries meet urgent and dire humanitarian needs in the short-term while facilitating the mutually beneficial outcomes of labour mobility in the long-term. So how do we do it? The Ryerson Global Diversity Exchange (GDX) webinar on 28 July 2015, conducted in collaboration with the World Bank and the Bertelsmann Stiftung, examined this question through a trans-Atlantic lens, seeking to highlight emergent innovations in refugee policy for further investigation.

Globe and Mail journalist Doug Saunders jump-started the conversation with a three-piece wake-up call, starting with the current refugee crisis: Trans-Mediterranean crossings to Europe have not increased since last year, but have become more deadly, so the cost of not reforming migration systems is rising. Europe-oriented refugee flows represent a tiny slice of the global total; failing to address even these flows will put more pressure on already heavily burdened countries. Finally, Europe’s system of refugee resettlement is uneven, slow, and insufficient to meet regional needs. The need for a serious shift in refugee policy within Europe is thus clear—but what might this shift look like?

Matthias Mayer of Bertelsmann Stiftung and Ratna Omidvar of Ryerson GDX put their heads together to think about potential ingredients of a successful and inclusive asylum framework and, pulling from the German and Canadian refugee protection experiences, three lessons emerged.

First, lengthy (and increasing) asylum processing times in Germany contribute to poor labour market integration outcomes for asylum-seekers, as employers hesitate to hire workers who may be forced to leave the country.

Second, flows of asylum seekers to countries with labour market shortages are steadily increasing, signaling an opportunity to use labour market forces to drive increased protection efforts.

Third, integration of asylum seekers works best when they can access a specific support network in their host community.

A rich conversation with World Bank Senior Economist Manjula Luthria produced the following set of questions for further investigation, which will be explored through this series of Ryerson GDX Conversations.

 

For more about the webinar speakers, additional resources, and to watch the GDX webinar, see: National Policies for an International Challenge: Improving Refugee Integration Policies (July 28, 2015)

 

By Manjula Luthria, Senior Economist, World Bank, and program leader for the International Mobility Program of the MENA region’s Human Development network.

It happened again a few weeks ago, this time it was in Boston. A year ago it was in Frankfurt and a few years before that in Wellington. As I make the case for loosening restrictions on labour mobility to a room full of well-meaning development experts, I am asked repeatedly: How can I possibly celebrate the effects of international mobility and make the case for more of it when the mobility we observe right now is so far from fair? Do I have no concern for the plight of the poor young woman who looks after the children of a well-off couple in New York while her own children suffer her absence and consequent neglect at home? Do the horrible impacts on “those left behind” not point to a grave need to pause and take a second look before we start celebrating mobility? What about the poor workers who face exploitation at the hands of powerful employers, in the form of wages well below that of the native workforce and faced with poor conditions at work? Isn’t the development-friendly course – not to mention the morally responsible one– to work on improving these conditions first before we unleash more poor and vulnerable into the non-ideal conditions?

In fact, in one capital city we even had a vote on it. The audience was asked to vote on whether they thought migration was a clear win-win for all, versus whether they thought it had benefits but also costs. No surprise, the majority of the audience voted for the latter. And this opened the door to conversations about some type of justifiable restrictions on movements since the costs were far from negligible. All in the name of saving the vulnerable – the migrants themselves, and the wronged innocents, the ones left behind.

As all of this transpires around me, I am compelled to switch hats. From a development professional making the development case, to a migrant from a developing country, then to working woman and finally to a working mother. And I start to wonder… how different is this conversation on placing limits on migration from one that must have occurred a generation before mine when women first sought employment outside the home?

Could these concerns mirror all the realities that described women’s participation in the labour force certainly a generation ago, but even today? In terms of unequal wages for similar work we’ve only just made it to 82 cents on the dollar, and from role placement in teams to promotions, we know unequal treatment is well documented. Working women also report more stress in their lives than their stay-at-home female counterparts. Those left behind suffer the absence of mum at home, and some evidence points to a higher incidence of obesity amongst kids of working mums.

So whether viewed from the point of view of the women who seek employment or their family members – it’s not an unequivocal happy story. Yes, it has benefits and costs, like almost everything else.

But would we ever hold a vote on this issue of whether some restrictions to women’s employment is therefore justified on this basis? It’s hard to imagine this today, certainly not in the cities I’ve mentioned above. Yet we know that restrictions did exist a few decades ago – indeed, there were laws on the books that prohibited women from continuing to work once they got married based on the paternalistic notion that someone else knew better. And it’s true that the conditions at work were far from ideal, they were quite horrible by today’s standards in fact! Absent from the workplace were the all-female bathrooms, any notion of maternity leave, childcare facilities, home based work, family leave, or redress mechanisms to report misdemeanors. How could anyone keep asking for more access for women into the labour force when the conditions facing them at the workplace were so deplorable? Shouldn’t we just put the brakes on it until we’ve weighed up the costs and benefits and come up with a clearer picture of whether this is truly a win-win?

Today, you’d be embarrassed to be in a room full of people who phrased a question like this.

How long before we are equally embarrassed to discuss this in the context of migrants who seek labor market access, especially those who are willing to do jobs that natives won’t? How long before we stop talking of this false cost-benefit analysis and move on to talking about the barriers to mobility? How long before we can make the case for more access and agency for migrants, knowing that the supporting policies and institutions surely still need to be built? Isn’t that the task where we ought to put our financial and political capital in the development community?

Re-printed with permission from the Center for Mediterranean Integration (CMI), International Labor Mobility blog, 

Manjula Luthria is Senior Economist and program leader for the International Mobility Program of the MENA region’s Human Development network. She is based at the Center for Mediterranean Integration (CMI)  in Marseille, France and can be contacted by email at: mluthria(at)worldbank.org.

By Manjula Luthria, Senior Economist, World Bank, and program leader for the International Mobility Program of the MENA region’s Human Development network.

While the Grammy’s gave us the title to this post, it was the Superbowl that made me think of last year’s controversial commercial. A one-minute Coca Cola advertisement featuring children and adults—mostly immigrants—from across the United States, singing “America the Beautiful” in multiple languages. The advertisement sparked outrage with detractors calling it unpatriotic and swearing to never buy a coke product again. The contentiousness of migration became more apparent as 2014 progressed, with the election of anti-migration political parties in Europe and widespread disapproval of President Obama’s immigration reforms here in the States. At the onset of this year—spurred on in part by the terrifying attacks on Charlie Hebdo—some Europeans took to the streets not only to protest terrorism, but also immigration.

To those of us who work on migration, these events on both sides of the Atlantic pose a mystery.

Data show that the gains to global welfare from more international labour mobility are astoundingly large (much larger than the gains from other development darlings) yet public opinion appears to show a repeated rejection of the idea of more mobility. If this disconnect is cause for worry, the findings of the World Values Survey are cause for outright depression: in OECD countries the number of people rejecting migrants as neighbors rose from 1 in 12 in 1980 to about 1 in 8 in 2010, a 34 percent increase. Natives’ perceptions of a detrimental impact of more migration on their personal lives does not seem to match the mountain of evidence that points to it being globally beneficial.

Meanwhile, economists and demographers tell us that we need to prepare for more—not less—mobility than currently exists. In discussing why we should care about these challenges in his book Arrival City, Doug Saunders highlights the upcoming “mass movement that will change our world in the twenty-first century.”  The World Bank’s Maitreyi Das, in Inclusion Matters, describes migration as “one of the most potent forces of social churning” today. Indeed, migration is here to stay.

So with larger migrant flows imminent, the sources of all this resistance to migration require serious attention, which will no doubt take us into the uncomfortable territory of privately held views. This means that the binding barrier to entry needs to be recognized, even though it remains invisible in the form of implicit bias or perceptions. If we don’t devote this effort now, labour will remain trapped in locations that do not offer the best return on investment, or will end up choosing mobility at a great risk to their own well-being and lives. And our twin goals of reducing absolute poverty and achieving shared prosperity will continue to miss one of the most important weapons in its arsenal.

In an effort to lay the foundations for more labor mobility—not just international, but internal as well—we in the Social Protection and Labor Global Practice at the World Bank have fostered country engagements on increasing access to overseas markets as well as strengthening the institutional underpinnings that can support this greater access. As we scale up these engagements, we will also start to pay greater attention to policies and practices that can help reduce the resistance to migration, improve the reception that migrants receive, and ultimately improve their insertion into the unfamiliar labor markets of their new host communities in a way that fully utilizes their labor assets.

Identifying such policies and practices will involve a broader conversation amongst various specialists, from those working on hiring practices of employers to housing regulations in urban centers to service access. We are launching this conversation now, in partnership with the Social Inclusion Community of Practice, and will be reaching out to various stakeholders within and outside the World Bank to continue this important conversation.

Join us to discuss emerging work on these issues at Opening Doors and Minds: Urban Migrant Integration in Policy and Practice, a conversation between Maitreyi Das and Doug Saunders moderated by Xiaoqing Yu, Director for the Social Protection and Labor Global Practice at the World Bank.

This is the first of three articles on arrival cities by Manjula Luthria. See also, Cabin Crew, Please Prepare for Landing: Migrant Inclusion on the Ground.

Manjula Luthria is Senior Economist and program leader for the International Mobility Program of the MENA region’s Human Development network. She is based at the Center for Mediterranean Integration in Marseille, France and can be contacted by email at: mluthria(at)worldbank.org.