Think tank: Immigration beats aid in reducing world poverty Finding a hidden benefit in the politically charged issue Danny Sriskandarajah and Laura Chappell A cap on annual migration and no amnesty for illegal immigrants is one of the clearest policy stances of the new coalition government. The Conservatives have got their way and the Liberal Democrats have caved in: this administration has pledged to reduce immigration levels. At the same time the coalition is also committed to reducing global poverty: the aid budget will be protected. The new government wants to be tough and compassionate. But is it? A new report by the Institute for Public Policy Research (IPPR) shows that migration may be a far better way of helping the world’s poor than aid. The report, based on 10,000 household surveys in seven countries, suggests that migrants working overseas deliver tangible benefits in ways that aid and foreign investment just can’t.

Globally, migrants sent home about £220 billion to developing countries last year; four times the total volume of aid. Without these “remittances”, some Third World countries would struggle to survive. In Tajikistan, remittances account for more than two-fifths of the total economy; in Senegal, remittances are 12 times foreign investment inflows. The African continent receives $36 per capita in aid but $44 in remittances. Moreover, remittances have emerged as one of the most resilient sources of income for poorer countries during the downturn. This money — which usually goes straight to families with no strings attached — can be critical in boosting the quality of life of poorer households worldwide. For example, in Georgia and Jamaica a household with a member abroad is one-third less likely to experience unemployment. In Ghana, households with absent migrants spend $107 more per year on education than those without; in Jamaica, each returned migrant in a household increases healthcare spending by more than 50%. When migrants return — and significant proportions do, even to the poorest countries — they usually bring with them new resources, skills and networks. This can be critical in promoting entrepreneurship and trade in local economies. The migration experience can also change attitudes for the better. For example, more than 70% of returned migrants say that because of their experiences abroad they are now more committed to equality between men and women. Men are prepared to do some childcare, for instance. So it is possible that migration contributes to long-term social and cultural changes, as well as to economic development.

Of course, migration can mean “brain drain”: countries such as Fiji and Jamaica are estimated to have lost about three-quarters of their highly skilled professionals. But the picture’s not all bad: the money, skills and ideas that migrants send home, or bring back with them, often outweigh the negative impacts. And the knowledge that a good education and skills can open up the chance to migrate provides a powerful incentive to young people to work hard at school and university. Some, but not all, will end up leaving, so the pool of skilled people in a country may grow. These findings have important implications for the new government’s strategy on international development. Migration should become an integral part of the development agenda because migration can do things that aid cannot. Aid has some well known weaknesses — it can get tied up in bureaucracies and its effectiveness can be blunted by corruption. In contrast, remittances go directly to households and are spent by families, not officials. Both migration and aid have a place in development strategies, but a change in approach — more support for migration and less focus on aid — is overdue.

Of course the second part of this suggestion may be easier for electorates in Europe and America to stomach than the first. But be realistic. The demand for migrant labour in rich countries is set to rise as our populations age. It seems likely, too, that two-tier labour markets that have become almost addicted to cheap immigrant labour — some 90% of all London’s cleaners come from abroad — will become only more entrenched. Simply put, economies like ours need migrants to keep them growing. This does not mean that we should open the floodgates. Rather, we need practical policies to facilitate and manage mobility. Increasing legal migration programmes may be the best way to meet labour shortages in some sectors, deliver real economic benefits to developing countries and ensure that migrants are not pushed into the hands of traffickers. Will the public buy it? Think of it this way: if we really want to help the poor and salve our consciences, we have some choice. Giving money to a charity for relief in Haiti is fine, but it may be that hiring a Filipina nanny or encouraging our employers to pay the African cleaners a higher wage is better. Danny Sriskandarajah and Laura Chappell work with the Institute for Public Policy Research

http://www.ippr.org.uk/publicationsandreports/publication.asp?id=751