Globalisation and International Migration

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Globalisation and International Migration
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The period since 1990 constitutes a new and
important phase of globalisation
3
Since the 1990s

• There has been an enormous expansion in world
  trade.
• Quantum jump in FDIs
• Huge increase in financial flows
• There is also an increase in inequality.
• There is a premium on labour market flexibility
  worldwide
• There is an enormous decline in transaction costs
  of mobility.

4
Some data on globalisation

• Between 1980 and 1996, stock of DFI as of world
  output increased from 4.8 to 10.6.
• DFI flows as of world gross fixed capital
  formation rose from 2 to 5.6.
• Global foerign exchange transactions soared from
  60 bill per day in 1983 to 1200 per day in 1996

5
In the developed countries

• Natural increase in population is well below
  replacement level, hence population in many
  countries is declining.
• Population is ageing rapidly. Increasing
  dependency ratios are putting enormous pressure
  on sustaining social security and health
  benefits.
• With increasing levels of prosperity, local
  populations are opting out of low paid work (3
  Ds).

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All these factors should have led to an increase
in the rate of international migration in the
period of globalisation
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But what do migration trends suggest?

• Most migration is still between developing
  countries but a sizable proportion is between
  developing and developed countries.
• Although the stocks of migrants is going up, the
  rate at which migration is increasing has been
  going down (i.e migration flows are declining).
• In many countries, especially in EU, even the
  absolute number of migrants has been going down

8
International migration trends

• In 1998, 58 of the migrants lived in developing
  countries.
• All migrants constitute only 2.5 of the world
  population,
• The rate of growth of the migrant population fell
  from 2.5 during 1985-90 to 2.2 during
  1990-2000.
• In developed countries, the rate of growth of the
  migrant population fell from 2.6 during 1965-90
  to 1.4 during 1990-2000
• Stocks of Migrants workers from developing
  countries as all migrant workers declined in
  most developed countries except the US, Canada
  and Australia.
• The number of countries with restrictive
  immigration policies increased from only 7 in
  1976 to one-third of all countries in 2003.
• Emigrant workers in developing countries embody a
  much higher level of educational capital than the
  average. Clear evidence that skilled labour is a
  much larger component of the emigration stream
  from developing countries to developed countries.

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Contrast to the first phase of Globalisation

• This stands in contrast to the first
  globalisation phase (1870-1914).
• In this phase, flows of goods and capital (FDI)
  was also very high.
• But there was also large scale movements of
  population between countries between developed
  countries and the new lands and from UDCs to
  others.

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Some data on the first phase of globalisation

• Share of exports in GDP for the 16 major
  industrialised countries was 21.2 in 1913.
• Share of stock of DFI to world otput was around 9
  .
• Stck of foreign inv was one fourth of of
  developing countries GDP and double 9in real
  terms what it was in 1980!
• And in this phase, there were no restrictions on
  labour mobility.
• About 50 m people left Europe (about 1/8th of its
  population) in search of work and similar numbers
  left India and China.

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Policy discourse on globalisation is consistent
with restricted mobility

• The international discourse on globalisation
  accepts free trade in goods and servcies, and
  free capital flows.
• Capital and labour mobility are treated as
  substitutes and the talk is of taking capital to
  labour and not the other way around!
• Labour mobility and technology access are to be
  tightly controlled in the era of globalisation
  and liberalisation.
• The WTO and the new UN conventions provide tools
  for being able to implement a restrictive regime
  for labour immigration and technology
  dissemination.

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Structural features of capital in developed
countries

• Export of goods and capital remain important but
  financial flows now dwarf all other flows.
• As before, capitalists have to decide between
  exporting capital or goods.
• Over time, production and export of goods in
  developed countries has become more capital
  intensive.
• Less capital intensive production centres are in
  developing countries.
• Goods in developed countries have become capital
  and skill intensive.

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Implications for demand for migrant labour

• As capital and processes are go off-shore, there
  is intensified search for skilled labour for RD,
  IT etc.
• Since many services have to be provided locally,
  there is a demand for skilled professionals to
  man these services.
• There is also a demand for immigrant labour for
  low paid and dirty work.
• The composition of these three categories of
  immigrant labour demand varies between labour
  scarce OECD countries and others (OPEC, East
  Asia).

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Economic responses to the demand for immigrant
labour

• Low barriers and secure conditions of entry for
  highly skilled labour (especially in the new
  lands).
• Limited period entry for workers
• Turn a blind eye to irregular migration (which
  feeds the 3 D work).

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Socio-political responses to immigrant workers

• Range from increasing xenophobia to comprehending
  multi-culturalism.
• Attempt to use graded regional solutions, which
  are considered to be more politically acceptable.
• Increasing racial-religious divide in policy
  variables concerned with screening/selection of
  migrants.

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The larger costs of restrictive migration

• Fuelling divergent patterns of growth and
  weakening the engines of growth in developing
  countries.
• Exacerbating reverse transfers to developed
  countries (brain drain and associated capital and
  tax losses).
• Not helping to solve the problems of social
  security and demographic imbalance in developed
  countries.
• Leading to large human costs in both origin and
  destination countries.
• Increased militarism and asymmetric power
  relations.
• In the ultimate analysis, these costs are so
  large, that these policies are unsustainable.
• Hence significance of alternative strategies
  which are polcitically, socially and economically
  sustainable.