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INTERNATIONAL MIGRATION AND DEVELOPMENT:
IMPLICATIONS FOR AID PROGRAMS AND POLICIES
AID/PPC
March 7, 1980
Revised
International Migration and Development:
Implications for AID Programs and Policies
Summary and Conclusions
This paper analyzes the scope and the economic, social and
political implications of voluntary labor migration from
and to developing countries. On the basis of this analysis,
conclusions are drawn about the implications for AID pro-
grams and policies, primarily in labor sending countries.
The main conclusions and recommendations are:
Labor emigration may have a profound developmental
impact on a number of developing countries in which
AID has programs. However, AID's capacity to affect
the phenomenon and effects of migration is limited.
Indeed, even host governments have little control over
migration, but their policies influencing migration
can at least impact at the margin.
While in the long-term, AID's emphasis on increasing
employment and income for the poor would tend to
reduce income-inequalities and reduce the tendency
to migrate, the overall impact is too small to affect
migration in the short medium-term; indeed, AID pro-
grams in the short-run might further stimulate labor
mobility and international migration.
Where migration occurs in significant numbers, it
could have an important bearing on AID's strategy and
program objectives, as well as on the implementation
of particular programs and projects. As a result, it
is necessary to address migration issues when appro-
priate in the CDSS and adjust country assistance
strategies accordingly.
Given present information, it is neither possible nor
necessary to reach conclusions about the overall cost-
benefit calculation of emigration for sending countries
of interest to AID. There is a variety of possible.
effects, many of which are positive, but there are a
number of potential problems. AID's overall strategy
should be to help countries maximize the benefits and
mitigate the costs without actively supporting programs
that directly increase or curtail migration.
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- In receiving countries, the Agency should concern
itself with the protection of the human rights of
migrants and take these countries' human rights
performance into account when considering aid allo-
cations.
- There are a number of specific policy and program
interventions likely to be appropriate in sending
countries. These include:
-- Support, in a few cases, for the IMF and/or
IBRD in the exchange rate, trade and interest
rate policy area, aimed at maximizing the re-
flow of remittances and minimizing their use
for luxury import;- possible technical assistance
at the host government's request in this area.
-- Technical assistance and support in the prepara-
tion of studies to improve our understanding of
migration, and its implications for manpower
planning, and other economic and social effects.
-- Training of both;'skilled workers and returning
migrants.
-- Assistance both technical and financial in the
establishment of savings institutions aimed at
capturing remittances and channeling them to
productive uses.
-- Support of the small business private sector which
would tend under the proper circumstances to utilize
emigrants remittances in productive investment.
-- Develop projects designed to enhance the oppor-
tunities women may derive from migration primar-
ily in sending countries.
International Migration and Development:
Implications for AID Programs and Policies
I. Introduction
Throughout history, men and women have moved across
national boundaries to seek better opportunities or to flee
political upheavals. In the twentieth century alone inter-
national migration includes such prominent movements as the
waves of permanent immigrants to the United States, the
settlement of South Africa, Australia, Argentina, and Brazil
before World War I, and the enormous pre- and post-world War
II immigration to the United States and Latin America.
Between 1913 and 1968, over 70 million persons migrated for
one reason or another.l/ While many were refugees, a
large number were workers seeking better living conditions
for themselves and their families.
In the last two decades, voluntary labor migration has
increased the pace of income growth for the sending LDCs.
Rising demand for labor in general or for particular skills
in high wage, labor scarce countries has attracted migrants,
and around 20 million voluntary migrants now work outside
their native lands.2/ Many have come to the United States
and Western Europe, but international migrants are found
in Africa, Latin America, and the Middle East. While the
economic benefits to voluntary migrants
are diffciult to deny, there are issues pertaining to the
overall economic and social costs and benefits from
migration to sending and receiving countries.
This paper focuses on the implications for AID policy and
programs of voluntary international labor migration.
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Within that framework, emphasis is placed on program and
policy implications in LDC sending countries.
The paper does not address AID policy and program implica-
tions of the refugee problem. Refugees represent an increas-
ingly important phenomenon with economic and social ramifica-
tions both for developed and developing countries receiving
them. Among the latter are several countries, e.g., Thailand,
Philippines, which are current recipients of AID -assistance.
Refugees create special problems with policy and program
implications for AID that are beyond the scope of this paper.
Finally, this paper does not address questions of U.S.
policy -towards voluntary migration from LDCs to the U.S.
The only aspect of this issue on which the paper touches
is the possible impact of AID programs on economic "push"
factors stimulating outward migration from LDCs.
The discussion that follows will first describe the types,
location, and magnitudes of international labor migration.
The major economic, social, and political impacts will then
be presented. Finally, the implications for AID policies
and programs will be discussed.
II. Types, Location and Magnitude of Migration /
Labor migrants can be classified into three distinct
categories. The first is the seasonal worker, who regularly
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migrates to work in some specific task--like sugarcane
cutting, apple picking, or grape harvesting--and then returns
home after a few months abroad. The second type is the
temporary worker who goes abroad for two to three years,
usually under contract, but intends to return home after
building a financial nestegg or is required to under the
terms of the contract. The third type is the indefinite
migrant worker. Frequently, this person intends to return
home, but for reasons of necessity or success decides to
remain abroad for an indefinite period.
Statistics on precise numbers of migrants are poor. Never-
theless, it is clear that the impact of widespread interna-
tional migration is felt around the world. In Latin America,
over 4 million migrants are working in foreign countries,
and this figure does not include the thousands of Mexicans,
Jamaicans, Cubans, and Colombians who migrate to the United
States each year-- In general, the migrants have been
attracted to the high-income countries in the region: besides
the U.S., oil-rich Venezuela has attracted workers since the
1930's and now has an estimated 1.7 million foreign workers
or 25% of its labor force, with an estimated one million
from Colombia alone. Argentina has around 1.4 million foreign
workers including an estimated half a million each from Para-
guay and Bolivia.
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In the Caribbean, the historical pattern of intra-regional
migration can be broken down into four major streams. The
first, and most obvious, is the flow to North America
and Great Britain. The second flows to Trinidad, which
receives laborers from Grenada, St. Vincent, and other
islands in the Antilles. The third is to the Bahamas,
which receives mostly West Indian migrants. Finally,
about 300,000 Haitians cut sugar seasonally in the
Dominican Republic.
In Central America, political instability continues to produce
migrants. To some degree the reverse is also true. The
substantial influx of Salvadoreans into Honduras contri-
buted to-the war of 1969. There is also the phenomenon of
Guatemalans migrating to Southern Mexico, often to replace
workers who are migrating to Mexico City or to the United
States.
In Africa, as in Latin America, major population migration
has occurred in response to job opportunities. In West
Africa, workers from the extremely poor Upper Volta, Mali,
Guinea, Niger, Togo, and the Gambia migrate towards
the coastal areas of Ghana, Senegal, and especially
the Ivory Coast. Upper Volta exports almost a third
of its labor force. Conversely, two-thirds of the
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agricultural work force and 26% of the total labor force of
the Ivory Coast is made up of foreign workers.- In Southern
Africa, international migration was deliberately induced
first through the imposition of hut taxes, then through the
expropriation of tribal lands and finally through the crea-
tion of protectorates. As a result, a South African mining
economy was built around migrant labor and today over two-
thirds of South African mine workers are migrants, from
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neighboring countries such as Botswana, Lesotho, and Mozambique.-
The latest area of large-scale international migration has
been the Middle East (see Table 1).- In response to the rapid
rise in oil prices after 1973 and.the demand:for workers in
the labor-short oil-rich countries of Saudi Arabia, Kuwait,
Qatar, Bahrain, Libya, and the United Arab Emirates, millions
of Arabs, Asians, and their foreign technicians have flocked
to the region. Currently, there may be as many as 4 million
foreign workers in the oil-exporting countries. For example,
foreign workers amount to 71% of the labor force in Kuwait,
77% in Qatar, and 66% in Oman.7/ The Arab migrants, mostly
on time-limited contracts, come from Egypt, Jordan, both
Yemens, Sudan, Syria, Morocco, and Tunisia -- all countries
characterized, until recently, by relatively high levels of
unemployment. Forty percent of Yemen's and thirty-five per-
cent of Jordan's labor force has migrated. The rates of out
I
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migration have been so high that some traditionally labor
surplus states like Jordan have taken steps to entice native
migrants to return and to recruit workers from other areas.
Asia has recently become a major labor-sending region, with
over 1.2 million workers abroad. About 800,000 Asians, the
vast majority males, have recently come to the Middle East
from five principal sending nations: India (300,000), Pakistan
(350,000), Korea (estimated 60,000 in 1979), Philippines
(30,000), and Bangladesh (70,000). Many of these labor
migrants are skilled Asian professionals who seek the substan-
tially higher incomes available there. For example, a Sri
Lanka physician will receive a salary about five times higher
in an OPEC country than at home.
Recently, a new element has been introduced into the migration
picture in the Middle East: Asian work camps. Korea, for
example, has had notable success exporting complete construc-
tion packages in which workers are seen as part of an effort
to build up export earings (even if it may cause temporary
domestic labor shortage)./
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III. Economic Impact
1. Impact on Migrants
Voluntary.international migration typically
significant economic
yields/benefits to the individual migrant. Incomes may
rise 200 to 1000%; health care, education opportunities,
and the quality of life also typically improves. Total
migrant earnings represent a sizeable part of the GNP of
some labor-exporting countries. For example, total Egyptian
migrant workers' income has been estimated to equal Egyptian
GDP./ On the other hand, living conditions in migrant camps
or settlements usually tend to be inferior to those enjoyed
by native workers of similar skills, and migrants may not
enjoy the full range of social benefits, e.g., health care,
education, retirement, or welfare benefits.
2. Remittances
Although accurate data on remittances do not exist,
estimates of the net flow to the developing world (excluding
remittances in kind and those sent through unofficial channels)
range to over $15 billion in 1979. This represents a signifi-
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cant increase over the $4.6 billion estimated for 1972.-/
For many of the labor exporting countries, remittances have
grown faster than any other element of GNP over the 1970's.
In Pakistan, for example, cash remittances increased at an
average annual rate of 55% between 1973 and 1978.11/ Remit-
tances to Asian countries from the Middle East alone amounted
to $5.6 billion in 1978. In many of the labor sending countries,
remittances represent one of the largest sources of foreign
exchange earnings (see Table 2). They permit levels of imports
and economic activity that would in all likelihood not have
been possible in their absence.
Some of the factors affecting levels and rates of emigrants'
remittances have been analyzed in the context of Southern
example,
European emigration to Northern Europe. For/ the level of.
remittances is affected obviously by the number of migrants
and their skills, while the rate is affected inter alia by
whether emigration is permanent or temporary as well as by
such factors as exchange controls in the country of immigra-
interest rate policy
tion, exchange rate policy,/and expectations about infla-
tion in the country of emigration. However, little research
has been focused specifically on the determinants of levels
and rates of remittances from recent LDC migrants to the
Middle East, Africa, Latin America, or the U.S.
How the remittances are used e.g., as between consumption
and productive investment will also play a role in determining
the overall economic contribution of remittances to the sending
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country's development. Little is known about uses of remit-
tances. It is important to note that since remittances are
similar to exports or other earned sources of foreign ex-
change, it is difficult to identify from aggragate data the
expenditure breakdown of income earned in activities that
generate foreign exchange as between consumption and
savings, or the use of that income for various types of
investment.
It is possible, as some researchers suggest, that a large
part of the remittances are used for consumption, luxury
imports, and non-productive investments such as real estate.
On the other hand, in a country like Egypt, remittances pro-
vide the foreign exchange for a very active free foreign
exchange market that serves as an important source of develop-
mental imports for the growing private business sector.
Ultimately, the use made of remittances and its distribu-
tional impact will hinge in large part on individual LDC's
policies with respect to investment, foreign exchange and
trade, the existence of savings institutions and other macro
policies affecting overall income distribution and allocation
as between consumption and productive investment.
There is no detailed information on what form the increased
consumption stimulated by the remittances usually takes and
what types of investment are financed by the higher savings.
If increased consumption takes the form of higher imports,
especially of luxury goods as appears to be the case to
some extent, obviously the net benefits to the balance of
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payments will be reduced. To the extent that savings are
used partly for land or other real estate purchases, such
purchases may have adverse distributional effects if
they result in significant concentration of cultivable
land. There is also some evidence that savings are
channelled to set up small to medium family run retail
businesses, and that they thus provide a stimulus to
private sector activity.
A possible problem with reliance on remittances is that
like exports, they are vulnerable to external factors
and fluctuations. For example, during the 1973 recession
European countries exported their unemployment by
sending home large numbers of guest workers who did not
have Common Market protection.and-by -severely curtailing
new immigration. As a result, remittances to Turkey
fell by more than 70% between 1974 and 1978, contributing
to the financial crisis in which Turkey finds itself
today. Some analysts have predicted significant declines
in the demand for Arab migrants in the 1980's, but other
analysts disagree.12/ The actual outcome will depend on
the course of industrialization in the labor-importing
countries, the skill composition of labor demanded, and
the preference of these countries for Arab labor versus
non-Arab labor, and their internal politics.
While remittance flows are obviously subject to fluctuation
beyond the control of the sending countries, there is little
evidence to date that countries heavily dependent on remit-
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tances have suffered larger fluctuations in total foreign
exchange earnings than countries heavily dependent on one
or two commodity exports.
3. The Labor Market
International migration affects the labor markets
in both sending and receiving countries. For receiving
countries, immigration represents an addition to human
capital without the cost of training. For example, it would
have cost West Germany about $33 billion (in 1972 dollars)
to raise and train the number of workers gained through
immigration between 1957 and 1973. The offsetting costs do
not approach the benefits for the receiving countries.
For-the sending countries, international migration can also
have beneficial consequences for the employment structure.
Generally, the major sending countries have suffered high
rates of both under-employment and unemployment. Emigration
can be expected to relieve these problems when unskilled
workers (the most likely to be underemployed) migrate abroad
to work. To the extent that the migrants are unskilled and
underemployed, emigration is certainly beneficial. When,
however, the worker is already employed -- and evidence exists
to suggest that many migrants, perhaps over a third, are indeed
employed prior to migrating -- then the calculation becomes
more complicated.
If indigenous labor can easily substitute for the migrants,
the effects will be generally positive. In such cases
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average income per worker will tend to rise in the labor sectors
to the increase in the
affected with large-scale migration, owing/ ratio of capital to
the remaining workers. The labor market correspondingly
tightens while returns to capital fall. Such was the case in
Pakistan, where there was substantial emigration of construc-
tion workers to the Middle East between 1973 and 1978. Ac-
cording to a recent study, the migrants were readily replaced
and the wages of Pakistani construction workers more than
doubled.13/ Naturally costs rise for production using labor
intensively, e.g., construction and domestic services, and
other things equal the share of income going to labor would
tend to rise correspondingly. But this could be viewed as
desirable from the standpoint of promoting a more equitable
.income distribution.and development.
On the other hand, migration could entail significant economic
costs to the sending country: To the extent that migrants had
been trained, labor emigration can represent a substantial cost
to the sending country.14/ For example, with 20 to 50 percent
of the annual output of doctors and. engineers leaving the
Indian subcontinent and the Philippines, it is not surprising
that there have been calls for compensation by the sending
countries. First raised as an issue at the 1976 World Employ-
ment Conference, the idea of compensation received dramatic
support when the Crown Prince Hassan bin Talal of Jordan called
for such a measure at the 1977 International Labor Conference.
Demands of this kind will in all likelihood be heard with
increasingly frequency in the context of future NIEO discussions.
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However, the training cost of migration to society can be
easily overstated. First, the losses tend to be greater if
the emigration is permanent. Yet, most LDC migration is
seasonal or temporary. Second, to the extent that some of
the training cost may have been incurred by the emigrants,
then the social cost will be reduced. Third, trained workers
in certain skill categories may be unemployed because of
lack of demand and inadequate manpower planning. While it
may be desirable from the standpoint of domestic development
to stimulate demand for their skills, it may be more costly
to do this than for them to migrate temporarily and the
domestic economy to derive the benefits of their remittances.
The second major problem migration can cause for a sending
country's labor market is the creation of bottlenecks in
critical sectors where workers with scarce skills migrate.
For example, Jordan, Sri Lanka and possibly Egypt have
15/
experienced some labor shortages in critical sectors.-
In fact, the migration of essential or non-replaceable workers
might actually reduce the income of the remaining workers.
While this is an extreme case, it is possible, especially if
the contribution of such essential workers to the overall
economy is significantly higher than their pre-migration incomes.
The impact of return migration on the labor market is also of
concern to sending countries. In principle, migrant workers
may make a positive contribution upon returning to the sending
human.
countries' / capital base because of the skills they may
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acquire abroad. And yet, the evidence indicates that if the
migrants were unskilled when they left the country, they are
unlikely to return with any additional useful skills. For
example, only about 10 percent of Turkish workers received any
training abroad. Similar findings describe South African
mine workers and Algerian workers in France.-/ Furthermore,
when workers do return home with skills acquired abroad,
frequently they are unable to find jobs in which to utilize
them or they return.to rural societies where such skills are
inapplicable. One study of Spanish workers found not only
that migrants who learned skills abroad failed to exercise
them on their return, but also that even returned workers
who had skills before emigrating failed to utilize them.17/
The economic problem of reabsorbing returning migrants is
accentuated, if return migration increases abruptly. Just
as sending economies are vulnerable to unexpected drops in
remittances, so also they are vulnerable to large repatriation
of migrants caused by abrupt increases in unemployment abroad.
In a sense, a sudden drop in the number of workers abroad
may be more serious for an economy than a drop in export
earnings, since exports often can be expected to recover. A
sudden change in demand for a country's migrants may signal
more of a long-term trend with no prospects for recovery. The
phenomenon has already occurred in the Mediterranean basin
where more than 1.5 million workers returned to their countries
of origin as a result of the 1974 economic recession.18/
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It has been argued that some of the damage caused by return
migration will be offset by the new attitudes and innovative
19/
ideas brought back by the return migrants.-/ In the few studies
that exist on the subject, there is some evidence to suggest
that return migrants do bring back with them some innovative
ideas, particularly in the area of housing. And even if the
migrants do not return with ideas specifically applicable to
their environment, some studies suggest that because of their
migration experience, they are more dpen to innovation.
4. Summary of Economic Impact
It is generally agreed that the effects of interna-
tional labor migration are beneficial for the migrants them-
selves and for the receiving countries. It is not so obvious,
however, whether the benefits outweigh the costs for the non-
migrants in the sending countries. Although empirical inves-
tigations now underway may shed some light on this question
for individual countries, data limitations and major assump-
tions about such critical variables as future political and
social patterns in receiving countries will preclude hard
20/
cost-benefit conclusions. In general, the governments of
sending countries currently judge the impact of labor emigra-
tion with limited information and focus on the major perceived
benefits of remittances and reduced unemployment versus the
major perceived costs of skill shortages and vulnerability
to sharp drop in remittances and increases in unemployment
if net reverse migration begins to occur.
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IV. Social and Political Impacts
A. Social Issues
The significant issue of how migration affects the
social structure of sending societies has been neglected by
most studies of international migration.
1. Social Mobility
It has been demonstrated that through remittances
and savings migrants can achieve social mobility. However, return
migrants often attempt to emulate the-local elite through
conspicuous consumption and the acquisition of traditional
symbols of prestige like land. Spanish return migrants, for
example, built elegant houses next door to former landlords
and professionals. To the extent that increased upward ;
social mobility due to migration leads to conspicuous con-
sumption, the development impact is obviously negative and
the demonstration effect on lower-income groups can be socially
disruptive.
2. The Status of Women
A second social issue concerns the status of women.
In certain cases, the departure of large numbers of male
workers increases, the opportunities for women to
participate beneficially in the process of economic
development. In Jordan, for example, the large-scale
emigration of the male work force (few women migrate in
the Middle East) has opened up opportunities for
Jordanian women. Similarly, in Yemen the substantial 9ut-
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migration has drawn women into the agricultural sector in
large numbers. But where women already play a significant
role, as for example among the Gusii in West Africa, male
migration has had almost no effect on the women left behind.
And there are examples of emigration actually contributing
to the decline in the status of women. In two studies
focusing on Indian women, researchers have shown that male
migrants tend to send regular and sizable remittances back
to their families, but instead of sending them directly to
their spouses, the majority were sent to senior males of the
family who then decided how the money should be spent. Where-
as the women had previously participated in the decision-
making, now they found relatives deciding that the money
should be spent on debt payments, agricultural investments,
and marriages rather than for the direct benefit of the
migrant's wife and children.
These studies focused on women left behind. Others have
looked at the impact on migration on the women who actually
migrate. In some areas, like Latin America where 45 percent
of the migrants are women, the impact is major. Even in
areas where women do not traditionally migrate in large
numbers, the effects can be significant. In Turkey, for
example, female participation in the migration process altered
the division of labor within the migrant family. Migrating
women insisted on participation in decision-making and income
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allocation. Some demanded joint registration of property.
Also, children of migrant families had better education
than children of non-migrant families and entered the labor
force at a higher level and at an earlier age.
For both those who migrate and those who remain, the migratory
process may have a direct effect in lowering the fertility
rate, particularly in areas of large-scale male emigration.
The current data, however, do not provide a clear answer to
this important issue.
B. Political Dimensions of Migration
Two issues emerge in the political arena that relate
to international .migration and development. They are (I) the
relationship between emigration and political conflict,
and (2) host country attitudes about foreign workers, ethnic
conflict, and human rights.
1. Emigration and Political Conflict
One ancillary--and usually overlooked--impact
of emigration is the substantial, though temporary, respite
of sending countries from some of the political pressures
that result as a consequence of potential dissidents emigrating.
This hypothesis has not been tested empirically, but the socio-
demographic profile of the typical migrant supplies some
evidence to substantiate the premise. The international
migrant tends to be among those who are usually identified
politically concerned
as the most / of the developing polities' citizens--
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young males between 18 and 35 who are generally ambitious
and mobile. Moreover, in the case of European migration
they have usually been exposed to the politicization process
in the large urban centers for at least some period prior to
emigration. Finally, they come from the age cohorts with the
highest employment difficulties since they are just entering
the job market.-/ Thus, emigration can have effects on the
level of political demand either by sending abroad potential
dissidents or by opening up opportunities for those who do
not migrate.
2. Host Country Attitudes
Since immigration is an economic boon to.the .
host country, it is notable that foreign workers are generally
held in disrespect. This is particularly true during times
of recession when foreign labor is blamed for increased un-
employment. But even in times of expansion, a large influx
of foreign labor produces strong reactions--ranging from
reservation to resentment to outright hostility. Immigrant
workers are sometimes viewed as taking jobs away from native
workers, or of placing heavy demands on social services and
educational systems. All of these attitudes persist despite
reputable studies that show that migrants generally take
jobs native workers will not accept and upon which many native
jobs depend. In addition, because migrants tend to be young,
healthy,and often single, they make few demands on the health-
care services, schools, and other social services. Indeed,
__ ____ ___ ___ ________ ____ _~______ ~ __ _~_
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studies of illegal migration to the United States indicate
that the migrants pay far more into the system through taxes
than they absorb as users of the services.22/
International migration has sometimes produced severe ethnic
conflict that impinges on the development process at a number
of points. In many countries, an ethnic division of labor is
present, where certain jobs become, in effect, the preserve
of specific ethnic groups thereby creating an ethnically
segmented labor market. In some cases, the divisions become
so strong and the conflict so intense that migrants have been
forced to leave. In Europe, after 1973, many guest workers
were shipped home, And in other areas the expulsions have
been violent as in the case of the Ibo in Nigeria, the Kasai
Baluba in Zaire, and the Indian Tamils in Sri Lanka. In the
most extreme cases, expulsion or even genocide practiced
against immigrant groups, such as Asians in Uganda or Chinese
in Indonesia, have created considerable disruption of the
local economy. And sometimes restrictions imposed on ethnic
strangers have produced a variety of unintended economic costs.
In Fiji, for example, a prohibition on landholding by Indians
resulted in short-term leases, overfarming, and soil exhaustion.
Finally, some of the Middle East oil-exporting countries are
shifting toward a greater proportion of Asian immigrant workers
partly because they appear to be less of a threat to the
traditional regimes.
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The treatment of foreign workers also raises the issue of
their human rights. In 1973, for example, Algeria suspended
the emigration of Algerian nationals to France in part because
oil resources increased demand for labor at home but also
because of France's failure to stop racial incidents and brutal
attacks on Algerians. Mexico, too, has complained bitterly
about the treatment of "undocumented" workers in the United
States. The South African pass laws have been criticized
throughout the world for underwriting the most flagrant injus-
tices of apartheid.2-/
In Latin America there have been attempts to forge bilateral
and multilateral agreements to protect the rights of migrant
workers. The Andean Pact on Labor Migrations, ratified in
1975, represents one effort on the part of Andean countries
to control labor movements. The Pact provides the legal
framework for the protection of the rights of the migrants
in regards to documents, contracts, social security benefits,
and protection in case of repatriation. But only Colombia
has taken steps to comply with the Pact's provisions, and
with a few scattered exceptions, none of the major centers
of out-migration have policies to regulate the process.24/
Fewinternational conventions exist to govern the treatment
of migrant workers. In the last five years, the International
Labour Office in Geneva has attempted to construct the rudiments
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of such agreements. Despite these efforts, the proposed con-
ventions do not secure the migrants' legal status nor do they
accord migrant workers unconditional equality of opportunity
25/
and treatment in matters of economic and social rights.
V. Implications of International Migration for AID and Host
Country Policies
International labor migration generally occurs from relatively
low income countries to relatively high income countries. AID
will most often tend-to be involved in migration issues arising in
labor sending countries and these are the main focus of this
paper. However, some countries like Senegal or hte Ivory Coast
may be regional growth poles and receive significant amounts of
labor from neighboring countries even though, on a worldwide basis,
they have a relatively low income level. AID may also operate in
countries such as Jamaica that are both labor sending and receiving.
Thus, the agency needs to concern itself about policies and programs
both in receiving and sending countries.
With respect to AID policy in receiving countries, AID should be
mindful of the adverse social impact that often occurs in connection
with discrimination against immigrant labor. The U.S. should be
supportive of positions taken in international fora to ensure the
human and economic rights of immigrant labor, such as the recent
Brandt Commission Report which proposes that immigrant labor not be
precluded from the normal social and fringe benefits extended to
native labor. In addition, to the extent that the human rights
situation in countries influences AID allocations, human rights
regarding immigrant labor should be included.
- 23 -
Significant emigration is occurring from countries in every
region in which AID has programs. Emigration is a symptom
of relative poverty which under certain circumstances could
be helpful while under others detrimental to AID development
objectives. Whether specific attention is given to migration
issues in AID's development program depends clearly on the
magnitude of migration and its relevance to each country's
and AID Mission's development objectives.
There are three levels at which AID programs and policies in-
teract with migration in sending countries:
(a) AID's programs may have a general impact on individ-
ual workers' decisions to migrate.
(b) Specific AID policies and programs may assist an
LDC in gaining more benefits or reducing costs-of emigration.
(c) Significant emigration may affect AID's strategy
and project implementation capability.
A. General Program Impact
First, at a very general plane, AID's programs in
promoting equitable growth and helping address basic needs
can affect the desire of workers to migrate. By focusing
on increasing incomes and employment of the poor and by
assisting LDCs in providing better health, education and other
basic needs, it could be expected that AID's programs in
general would tend to support reductions in income differen-
tials and thus retard tendencies to migrate. Similar general
effects could be postulated for AID programs in family planning
- 24 -
whose end result may be a slowing down of the growth of the
labor force. However, the impact of our programs and for
that matter of all donors combined in the short-run is far too
small to narrow income differentials significantly and thus
materially affect migration flows. It also appears that, in
the short-run, small improvements in the standard of living
tend to increase labor mobility and thus actually increase
rather than decrease the propensity to migrate.
B. Possible Emigration-Related AID Activities
AID need not come to a judgment about whether labor
emigration has on balance a favorable or unfavorable impact
on development. Indeed, such a judgment would probably vary.
according to the country under consideration, and generally
there are inadequate data to support a final conclusion. Host
country policies range from active promotion of emigration
(e.g., Egypt) to coordinated policies to discourage emigra-
tion (e.g., Colombia). AID should endeavor to identify the
major favorable and unfavorable impacts of emigration in individ-
ual countries and work with the host government in maximizing/
minimizing these.
1. Technical Assistance on Overall Planning
In countries where emigration involves a signifi-
cant part of the labor force or specific segments of it and/or
remittances are a significant source of foreign exchange earnings,
AID can assist host governments in developing rational coordi-
- 25 -
nated policies toward emigration. Given the limited informa-
tion available in most countries on the trends and impact of
emigration, a first step might be to fund studies/surveys to
determine the major favorable and unfavorable impacts of
labor emigration and their relative magnitudes. For example,
data may be collected and analyses undertaken on questions
regarding the current and projected numbers of emigrants,
their skill composition, impacts on domestic employment
and wages, and projections of returning migrants for
specific areas. Analyses may also be appropriate in the areas
of the determinants of the level and the use of remittances, as
as well. as on the social impacts of migration. These kinds
of data and analyses, combined with current and projected
regional information on supply and demand of migrant labor,
would be valuable ingredients for the development of an
informed and coordinated LDC policy toward labor emigration.
2. Manpower Planning and Related Activities
The sending countries should adopt policies
that maximize the benefits of emigration in terms of reduced
unemployment and higher wages and minimize the unfavorable
consequences for the labor market. Some favorable effects
may occur as a part of the migration phenomenon (e.g.,
reduction of unemployed labor) and require minimal government
intervention. On the other hand, the emigration of labor has
left some countries seriously lacking in certain critical skill
categories. This situation can lead to serious economic
_~______ ._ .__ __ __ r_
- 26 -
bottlenecks (e.g., the construction sector in Egypt),
and to social hardships, (e.g., the migration-induced
shortages of medical doctors and teachers in Sudan
and Jordan). Some governments have initiated policies
that attempt to restrict the migration flow of certain skill
categories (e.g., increased wages, agreements to work in-
country for a specified period after completion of training,
etc.). AID participation in training programs in critical
skill categories in such countries should be conditioned on
host government policies that discourage the emigration of
these people upon completion of their training. At the same
time, AID should be cognizant and supportive of opportunities
that migration of men may create for women to enter skilled
occupations from which they had previously been excluded
(e.g, these opportunities are occurring in Jordan).
AID's desire to increase the participation of women in develop-
ment can take advantage of the opportunities opened up by the
migration process. But the specific programs--training for
women, investment incentives, agricultural programs, and
programs to encourage women to remain in school--must be
carried out with an awareness of the diversity of the impact
of migration on the status of women whether in the migration
stream or left behind.
In some countries shortages of unskilled labor have developed,
mainly in the rural sectors, because of emigration (e.g.,
Yemen). The response of these countries has been to increase
mechanization when possible and to increase the use of women
labor, but in general, production levels and amount of land
- 27 -
cultivated has declined. It is not clear whether in the longer-
term, if it is assumed that the migrants will be repatriated,
capital intensive patterns of agricultural production are
appropriate. In these cases, AID could (a) work with the host
government in determining the appropriate technology needed to
maintain output and productivity, (b) help in developing of
such technology and, (c) assist in the training of labor using
this technology.
AID also could assist governments in addressing problems of
returning migrants. There are few cases in which this is a
significant problem at present, but the problem may arise in
the.future, especially in'the Middle East. In many respects,
appropriate policies and programs will not be different than
addressing the unemployment problem in general through job-
creation programs and social services. Some countries, however,
have recognized the unique problems of returning migrants and
their families and have set up special programs for them (e.g..,
/
Colombia).
A recent OECD study has identified a number of possible program
interventions aimed specifically at effectively reintegrating
returning migrants6/These include: a) stimulating economic
returning migrants-- These include: Ca) stimulating economic
------------ ------
- 28 -
activities that combine the employment of returning migrants
and the utilization of their savings in small business enter-
prises. Various methods have been suggested promotion of
rural co-operatives; the purchase of shares in public enter-
prises as done in Yugoslavia; the creation of savings banks
primarily designed for return migrants, (b) provision of
training for the returning migrants that is closely related
to the economic needs as defined in specific development
plans; development projects and training courses for return
migrants could be constructed as a single package, and (c)
programs aimed at the reintegration of children of migrant
families and the provision of adequate financial incentives
and informatiQn to'construct new houses. The key to such a
reintegration program is the supply of information both to
and from migrants.
In summary, AID's involvement in sending countries where
emigration is causing manpower problems should focus on:
technical assistance involving studies on manpower
planning and projections,
training both for potential migrants and return
migrants and,
technical assistance inaddressing short-term adjust-
ment to production in sectors affected by emigration.
3. Remittances
Remittances are usually the major short- and medium-
term benefit resulting from emigration. This benefit has led
_____
- 29 -
countries like Egypt and Korea to actively promote labor
emigration as a major earner of foreign exchange. The mere
presence of labor abroad, however, does not automatically in-
sure a certain flow of remittances. Appropriate exchange
rate and interest rate policies of the labor-sending govern-
ment are critical to maximizing the flow of remittances. In
a few countries, e.g., Egypt, in which AID has established
a dialogue with the government on such macroeconomic policies,
AID could provide technical assistance, through outside
experts on such issues. While, in these policy areas, AID
normally follows the lead of the IMF and IBRD, there may be
critically evaluating and, as appropriate,
scope for/supporting the IMF or IBRD policy lead with technical
assistance activity.
AID also has experience in the creation of credit and savings
institutions that could provide encouragement for increased
remittances and better utilization of remittances in produc-
tive activities. AID's experience has been drawn from creating
institutions aimed at increased domestic currency savings in
rural areas. In many cases, remittance flows occur precisely
to rural areas where the migrant's family may continue to
reside. However, savings institutions and mechanisms directed
toward remittances will have to address the particular character-
istics of potential savings from remittances. For example, an
Egyptian worker abroad has the option of holding savings abroad
in foreign exchange as opposed to repatriating savings and
- 30 -
converting them in domestic currency. An important considera-
tion in this decision will be whether the value of these
savings can be maintained in light of, for example, differential
inflation rates in Egypt and abroad. Developing savings
instruments that provide such assurances can contribute both
to higher flow of new flows and their channeling into more
productive uses.
Another factor at least as important in maximizing not only
the flow but also the productive use of remittances is a
especially small-scale enterprises.
vibrant and growing private business sector,/ A healthy private
sector will encourage remittances to flow naturally into pro-
ductive investments and make it unnecessary for the host.
government to attempt to capture a maximum share of the remit-
tances. The fact that remittances are often used for real
estate and conspicuous consumption is probably mostly a result
of the limited investment opportunities.
There is a variety of means by which AID can help to encourage
the private sector, although to be effective this would have
to be accompanied by host government support of the private
sector. In general, AID activities in this area involve pro-
viding credit through financial intermediaries, financing
feasibility studies, technical assistance to small-scale
enterprises, etc. Aid decisions in support of the private
sector should be taken in the context of an overall assessment
that encouragement of the private sector, especially small
- 31 -
business enterprises, is an important strategic objective
for an AID Mission. Thus, while a healthy small business
sector may promote channeling remittances to productive
activities, the AID decision to support this sector should
rest fundamentally on the overall strategic importance in
promoting AID objectivesrather than on the narrower issue of
more effective utilization of remittances.
Some governments are actively encouraging increased
emigration by factilitating the recruitment process,
organizing work camps, and establishing vocational training
programs specifically for labor export. In general, AID
should not.participate in activities designed to increases
emigration, except in the very unusual case where- labor emigra-
tion beyond a doubt has on balance a significant favorable
impact on development. In the more usual case, AID should
take the flow of migration as given and work to improve the
development impact of this migration.
C. Impact of Emigration on AID Programs
In addition to helping LDCs overcome problems on
maximizing benefits from emigration, AID should also be
conscious of the potential impact of emigration on its own
programs. The scarcity of skilled labor can affect the cost,
implementation time, and even the feasibility of implementa-
tion (e.g., such problems have already occurred with AID con-
- 32 -
struction projects in Yemen and Egypt). In Yemen, the short-
age of skilled workers has had a direct impact on AID-supported
projects, such as the construction of health clinics that
had to be cancelled because there were not enough workers to
build them. Similarly, in Yemen and conceivably other countries,
scarcity of unskilled labor can make AID's conventional labor-
intensive projects in rural areas inappropriate.
If this were to occur, individual Mission strategies of in-
tervention in assisting the rural poor may need to be re-
evaluated in individual countries. It is not a priori possi-
ble to decide what an appropriate strategy might be as it
would tend to vary with the circumstances affecting individual
.countries.
VI. Conclusion
It can probably be fairly stated that, although labor
migration may have a profound developmental impact on a
number of developing- countries, AID can only make a modest
contribution to maximizing the gains or addressing the
problems generated by migration. Indeed, even host governments
have little control over the migration phenomenon, but their
policies influencing migration can at least impact at the margin.
The key conclusions of the paper are:
That while in the long-term, AID's emphasis on increasing
employment and income for the poor would tend to reduce income
inequalities and reduce the tendency to migrate, the overall
- 33 -
impact is too small to affect migration in the short
medium-term; indeed, AID programs in the short-run might fur-
ther stimulate labor mobility and international migration.
Where migration occurs in significant numbers, it
could have an important bearing on AID's strategy and program
objectives, as well as on the implementation of particular
programs and projects. As a result, it is necessary to
address migration issues when appropriate in the CDSS and
adjust country assistance strategies accordingly.
Given present information, it is neither possible nor
necessary to reach conclusions about the overall cost-benefit
calucation .of emigration for sending countries of interest
to AID. There is a variety of possible effects, many of
which are positive but there are a number of potential prob-
lems. AID's overall strategy should be to help countries
maximize the benefits and mitigate the costs without actively
supporting programs that directly increase or curtail migration.
There are a number of specific program interventions
likely to be appropriate in sending countries. These
include:
-- Support, in a few cases, IMF and/or IBRD leads
in the exchange rate, trade and interest rate policy area aimed
at maximizing the reflow of remittances and minimizing their
use for luxury imports; possible technical assistance at the
host government's request in this area.
- 34 -
-- Technical assistance in general studies to improve
knowledge about migration, manpower planning and projections.
-- Training for both skilled workers and returning
migrants.
-- Assistance both technical and financial in the
establishment of savings institutions aimed at capturing
remittances and channeling them to productive uses.
-- Support of small business private sector which
would tend under the proper circumstances utilize emigrants'
remittances in productive investment.
-- Develop projects designed to enhance the oppor-
tunities women may derive from migration primarily in sending
countries.
The Agency should also concern itself with the pro-
tection of the human rights of migrants in receiving countries,
and take these countries' human rights performance into account
when considering aid allocations.
- 35 -
FOOTNOTES
1/ Kingsley Davis, "The Migration of Human Populations,"
Scientific American (September, 1974)
2/ Alan Tonelson, "Migration: People on the Move," The Inter-
dependent, (July/August 1979); Kathleen Newland, International
Migration: The Search for Work, Worldwatch Paper 33,
November 1979, p. 5.
3/ Zafer Ecevit and K. C. Zachariah, "International Labor
Migration," Finance and Development, 15:4 (December 1978):
32-37; Kim Faud, "Illegal Immigrants Form 25% Venezuela
Population," Latin American Daily Post, July 2, 1979; "Business
Brief: Migrating to Work," The Economist, August 18, 1979
4/ Samir Amin, Modern Migrations in Western Africa London:
Oxford University Press, 1974, pp. 65-123; Jeau-Marc Fleury,
"People on the Move: Upper Volta," Agenda, 2:10 (December
1979): 14-15.
5/ Alejandro Portes, "International Migration: Conditions for
the Mobilization and Use of Migrant Labor Under World
Capitalism," .Unpublished essay, September 1979, pp. 19-23-.
6/ The following discussion is based on the AID-funded study
"Aspects of International Labour Migration in the Arab Near
East: Implications for USAID Policy" by Stace Birks and
Clive Sinclair, May 1979; see also Zafer Ecevit, "Inter-
national Labor Migration in the Middle East and North Africa --
Trends, Effects, and Policies," presented to the Rockefeller
Foundation Conference on International Migration, Bellagio,
Italy, June, 1979.
7/ Zafer Ecevit and K. Zachariah, op. cit.
8/ Charles B. Keely, "Asian Migration to the Middle East,"
paper presented by the Population Council, December 1979;
John W. McCarthy, Jr., "Asian Labor Emigration to the Arab
OPEC States," Irregular Paper #9, USAID, ASIA/DP/PL,
December 14, 1979.
9/ Nazli Choucri and Richard S. Eckaus,"Interactions of Economic
and Political Change: The Egyptian Case," World Development
7 (1979): 783-797.
10/ Ecevit and Zachariah, "International Labor Migration," p. 36.
__ _~ _~__ ~ .. ~_I__ ___ ~~~___
- 36 -
11/ Shahid Perwaiz, "Special Report: Home Remittances," Pakistan
Economist, September 1, 1979.
12/ For the divergent views see Conference Proceedings, Near
East Labor Migration: Implications for AID Policy, Bureau
for Near East, USAID, November 1979.
13/ Shahid Perwaiz, "Special Report: Home Remittances,"
14/ It is for this reason that Bohning of the ILO has claimed
that "international labor migration contributes to the
widening-gap between poor and rich countries." See also
"Business Brief: Migrating to Work;" also cited in Newland,
International Migration, p. 17; William Glaser, The Brain
Drain: Emigration and Return (UNITAR Research Report No.
22, London: Pergamon Press 1978)
15/ Eckaus has recently argued that such wage increases, because
of growing labor shortages have restricted Egyptian con-
struction ("Effects of Construction Labor Migration in the
Egyptian Economy"). However, Egyptian construction is
booming and the major restriction is probably on the side
of saving for financing construction.
16/ Jon Swanson, "The Consequences of Emigration for Economic
Development: A Review of the Literature," Papers in
Anthropology, 20:1 (Spring 1979): 39-56.
17/ Robert E. Rhoades, "From Caves to Main Street: Return
Migration and the Transformation of a Spanish Village,"
in ibid, pp. 57-74.
18/ W. R. Bohning, "International Migration in Western Europe:
Reflections on the Past Five Years," International Labour
Review, 118:4 (July-August 1978): 401-414.
19/ Joseph Lopreato, Peasants No More (San Francisco: Chandler,
1967), p. 229; M. P. Miracle and S. S. Berry, "Migrant
Labour and Economic Development," Oxford Economic Papers,
22:1 (1970) 86-101.
20/ The IBRD is currently conducting studies in Pakistan and
Bangladesh to determine more accurately the costs and
benefits of labor emigration for those countries.
21/ Demetrios G. Papademetrioa, "European Labor Migration:
Consequences for the Countries of Worker Origin," Inter-
national Studies Quarterly, 22:3 (September 1978): 377-408.
I__
________~ __ __~ _______ ~~_~__ __~ _~I_____~~ __ ~~__~ _~_~_~_ ___
- 37 -
22/ Wayne A. Cornelius, Mexican Migration to the United States:
The State of Current Knowledge and Recommendations for
Future Research (La Jolla: Center for U.S.-Mexican Studies,
University of California, San Diego, Working Paper No. 2,
May 1979.
23/ Philip Frankel, "The Politics of Passes: Control and Change
in South Africa," Journal of Modern African Studies, 17:2
(1979): 199-217.
24/ Susana Torrado, "International Migration Policies in Latin
America," International Migration Review, 13:3 (Fall 1979):
428-439.
25/ Bohning, "International Migration in Western Europe," pp.
404-407.
26/ Rein van Gendt, Return Migration and Reintegration Services
(Paris: OECD, 1977).
__ ____ __~ __
Table 1
IMMIGRANT LABOR II TIlE MIDDLE EAST AND NORTH AFRICA
BY SOURCE AND DESTINATIONi 1975
(in thousands)
Destination audi United Arab
Source ', Algeria Bahrain /2 Iran Iraq kuwait Libya L2 Oman Qatar Arabia Emirates total
Egypt 1.0 1.2 2.3 37.6 175.0 3.3 2.7 95.0 12.7 332.8
Jordan .4 .8 3.1 47.7 13.0 2.6 1.7 175.0 6.4 250.7
Morocco .3 -- .1 1.8 2.2
Oman 1.5 3.7 1. M 17.5 7.0 31.2
Somalia .2 .1 5.0 1.6 6.9
Sudan .5 .9 7.0 .2 .5 35.0 1.8 45.9
Syria .4 .1 .2 16.5 .15.0 1.5 .4 15.0 3.4 52.5
Tunisia .2 29.0 29.2
Yemen Arab Rep. .9 2.8 1.0 1.6 280.4 3.5 290.2
P.D.R. Yemen .4 8.7 1.0 55.0 1.5 66.6
Europe and North
America 6.1 4.4 35.0 .7 2.0 28.0 3.6 9.2 15.0 9.1 113.1
India .3 9.0 4.4 .3 21.5 2.0 24.8 19.8 6.0 73.0 161.1
Pakistan .1 6.7 2.4 .9 11.0 5.0 20.2 14.5 25.0 94.0 179.8
Others 1.0 3.9 140.2 L3 .9 58.7 19.2 7.9 8.9 49.5 31.8 322.0 4
Total 9.8 29.4 182.0 8.4 211.4 295.0 67.2 61.8 173.4 245.8 1,884.2
X of total employment .2 38 2 1 71 33 64 77 39 89
Li Jordanians and Palestinia s.
L2 End of 1976
/3 Includes 120,000 Afghan workers and others from the Gulf states.
(-) Nil or insignificant.
Sources: Algeria: Ministry of Labor
Kuwait: The 1975 census
Libyas Ministry of Planning and Scientific Research
Saudi Arabia: J.S. Birks and C.A. Sinclair, "International Migration Project, Country Case Study: Saudi Arabia .
University of Durham. Enlnand. 1978.
Bahrain: Estimates based on 1971 census and 1976 arrival departure statistics.
Iraq: Estimates based on "Foreigners in Iraq by Sex and Nationality, 1974" statistics.
Iran: Estimates of the Ministry of Labor.
Oman, Qatat, U.A.E.: Author's estimates derived from available information on population,employment, work permit
and other related published data.
Table 2
FLOW OF WORKERS' RMFITTANCES AND ITS SHARE IN TOTAL IMPORTS AND EXPORTS
OF COODS IN SELECTED IAIRII EXPORTING COUNTRIES
1974 1975 1976 1977
Remit- As percent of Remit- As percent of Remit- As percent of Remit- As percent of
Country tances LI Exports Imports tances Exports Imports tances Exports Imports tances Exports Irporl
Algeria 390 9 9 466 11 7 245 5 4 246 4 3
Banigladeah L3 36 13 2 35 9 1 36 10 1 83 18 9
Egypt 189 11 5 367 23 7 754 47 18 1,425 66 27
India V3 276 8 5 490 12 8 750 L2 17 12 -
Jordan 75 48 12 167 109 18 396 198 34 425 186 38
Morocco 356 21 17 533 35 18 548 43 16 577 44 18
Pakistan L3 151 IS 6 230 22 8 353 31 12 1,118 88 40
Syrian Arab Republic 62 8 4 55 6 3 51 L 5 2 --
T.i.LstI a 118 13 9 146 17 8 135 17 8 142 16 8
Turkey 1.425 93 33 1,311 94 25 982 50 17 982 56 17
Yemen Arab Republic /3 159 1,325 69 221 1,556 72 525 4,269 137 1,013 5,449 139
Yemen P.D.K. 41 410 23 56 373 32 115 261 40 179 L4 352 49
Soutces: ISP consolidated balance of payments reports.
Data not available.
i l In current prices, million dollars, gross figure.
L2 Estimates.
/3 Fiscal year ending June of the indicated year.
L4 Preltvilnary.
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