Global Policy Forum

by Brigitte Granville*

Migration is the side of globalization that, to borrow Oscar Wilde's phrase, dare not speak its name. Advocates of globalization dance around the topic because they fear it will incite nativist backlash. Respectable opponents of globalization avoid it in fear that they will be called racists or insensitive to the plight of the world's poorest.

This silence is not only disingenuous; it is certainly dangerous. In theory, global economic integration implies a world where the markets for goods, services, capital, and labor are perfectly integrated. Although many markets are nowadays increasingly open--even if others, notably agriculture, remain distorted by protectionism--integrating global labor markets has largely been left out of the globalization process.

This is hardly surprising. Over the centuries, governments have always been concerned to protect "their" local poor and unskilled from immigrant competition. Of course, such concerns are quickly discarded when countries become rich and local workers no longer want to perform menial jobs. The history of much of the great migrations to the US in the 19th and 20th centuries fits this model. So do the Indo-Pakistani and Afro-Caribbean migrations to Britain that followed the UK's post-war imperial retreat, and the migrations of Algerians to France and Turks to Germany during the "economic wonder" of the 1960s.

But political leaders and citizens in the developed world are wrong to think that economic migration can be turned on and off like a spigot. Despite massive government efforts in Europe and the developed world to restrain immigration after the oil price shocks of the 1970s, labor inflows into the rich countries started to increase in the 1980s to an annual average of about 1.4 million in Europe and 2.3 million in the US. The number of foreign-born workers increased throughout the OECD area (Japan being the sole exception). Foreign workers now account for 25% of Australia's labor force, 10.3% in the US, and 5.3% in Europe.

These flows reflect the growing shortage of skilled workers and declining populations (particularly in Europe) that are beginning to bedevil the developed world. So Germany, if not warmly welcoming, finds itself soliciting Indian computer programmers, while Canada and other countries entice China's middle classes with a safe haven in which to invest just in case things go wrong at home. But this tolerance is confined to the skilled and the wealthy. No one wants to open the door to large-scale immigration by the poorest of the poor.

Underlying this discrimination, especially in Europe, is cultural aversion to immigrants from regions with alien cultures, which may account for the absence of widespread protests against the EU's eastward enlargement. Indeed, the economic justification--that skilled immigrants tend to be net economic contributors while low-skilled workers impose a fiscal burden and threaten low-skilled natives--is weak. Immediate welfare costs, for example, can be passed on to the next generation, which will encompass these immigrants' children. More importantly, immigration's overall benefits outstrip the costs. In Britain, for example, the net annual contribution to GDP from immigrants is £2.5 billion, according to a recent Home Office report.

Facts, however, rarely pose an effective obstacle to hardened nativists, which is why governments worried about immigrants prefer to see some jobs go to people in poor countries rather than see poor people come to jobs in rich countries. Open international trading relations (especially allowing farmers in developing countries greater access to rich countries' markets) is, of course, the best way to achieve this. Indeed, liberalization of agriculture would provide a viable substitute for migration in many cases. Farm politics in Europe and America, however, make this virtually impossibile.

Recent academic studies by Sergei Guriev of Moscow's New Economic School and Guido Freibel of the University of Toulouse expose a link between strict immigration rules and illicit trafficking in human beings, confirming the need for reform. If such criminal activity is to be stopped, the despair found in poor countries must be reduced. Politicians in rich countries will be forced to strike a better balance between more liberal immigration policies and less trade protectionism.

History offers bitter lessons concerning the failure to meet this challenge. The economic historian Harold James notes that the countries that turned toward aggressive militarism in the 1930s had previously been large suppliers of emigrants. Japan, Germany, and Russia all saw large outflows of their populations before the First World War, but these flows slowed to a trickle as countries like the US closed their doors to immigrants in the wake of the Great Depression that began in 1929.

In today's world, Africa and Asia are the world's biggest suppliers of migrants. If more jobs do not appear in these places, and doors to immigration remain shut, it should be no surprise that events born of frustration and hopelessness will occur with ever-greater frequency. Liberal immigration policies and the economic growth promised by globalization are the keys to preventing dire conditions in poor countries from being translated into violence at home and abroad.

Brigitte Granville is Director of International Economics at the Royal Institute of International Affairs, London.

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