How migration can benefit all economies
Technology, globalisation and visa-free travel agreements such as the Schengen area mean we are now witnessing the highest levels of movement on record. As of 2017, one in 30 people were living outside their country of birth but even that number does not paint the full picture of global movement.
High quality migratory data is hard to find precisely because these people are on the move, but that problem is exacerbated by the different reasons humans migrate. There were nearly 26 million refugees and asylum seekers in 2017, but registered refugees only constitute a small proportion of those moving abroad. The International Organisation for Migration estimates that a further 66 million people are experiencing forced displacement to escape natural and human-made disasters, ecological degradation, conflict or persecution.
Many of the economies that the EBRD invests in such as Ukraine, Poland and Kazakhstan rank in the top ten countries of incoming and outgoing immigration worldwide. This revolving door of émigrés and migrants are posing challenges to many countries, but the question is how to help our regions turn potential crises into opportunities.
Benefits abound
The EBRD’s latest Transition Report makes clear the case that migration is good for economies. Migration increases worker’s productivity as a direct result of their lived experience, it argues. The knowledge gained from moving abroad and working in different environments brings a productivity boost that does not arise when it is only goods and capital that can move freely across borders.
Emigration rates in the EBRD’s regions have been consistently higher than the global average, with nearly 10 per cent of people born in our regions living outside their country of birth and Turkey, Jordan and West Bank and Gaza hosting three of the world’s largest refugee populations. Helping developing economies effectively manage an increasingly high inflow and outflow of migrants is a key EBRD priority.
During a live recording of an EBRD Pocket Dilemmas podcast during our recent Annual Meeting in Sarajevo, migration and its unsettling stepsibling, “brain drain,” was raised as one of the top five megatrends, or panoptic global challenges, that is transforming today’s world.
Rewriting the narrative
Elsewhere at the Annual Meeting Mehemed Bougsea, CEO of Think-it, an innovative engineering collective that integrates North Africa’s next generation of technical leaders with teams around the world, articulated his vision of the key to creating a sustainable future.
“We will never reach the future as we always live in the present,” he explained. “We need to overcome the barrier that migration is something on the horizon of the future: it is now; it will not be.”
Migration is certainly happening in the here and now of the Western Balkans, the setting for the Annual Meeting. As highlighted in an article published just before the event, the people of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia are leaving their home countries in large numbers to look for better economic opportunities elsewhere.
Ivana Jovovic from Montenegro is one of visionaries bringing energy to the Western Balkans.
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Also at the Annual Meeting, the EBRD’s Chief Economist, Sergei Guriev, stressed the importance of tackling this challenge now, as there will only be more migration in the future. “As countries move from low-income to middle-income, potential migrants will be more inclined to migrate because it’s easier for them to do so,” he said.
This is not necessarily a bad thing – many economists, including Mr Guriev, say that migration will have a bigger and more positive impact on welfare than most other trade developments. But as countries continue to work with organisations such as the EBRD and the private sector to invest in infrastructure, improve their legal and regulatory frameworks and create favourable business environments, émigrés are more likely to return home.
As the Economist’s Balkans correspondent, Tim Judah, put it: “It’s not rocket science; it’s simply making places better for people to live. It is making sure they have good schools, healthcare, roads, courts that work – that is the job of governments. It’s hard but it’s got to be done, or else this whole region will be old before it is rich.”
Better together
Investing in connectivity is one way the EBRD can help these countries future-proof themselves from outwards migration after EU accession. Linking cities together creates jobs and boosts trade by connecting firms to markets, and can be an effective way to mitigate emigration challenges.
As explained by the EBRD’s Director for Gender and Economic Inclusion, Barbara Rambousek, this is where the dual carriageway of migration effects (or reverse brain drain) starts to kick in – and kick-start – the local economy.
In many Western Balkans countries, emigrants are starting to return home with big ideas for small businesses. For example, according to the World Intellectual Property Organisation, former emigrants file 98 per cent of new patents in Albania, 75 per cent in Bosnia and Herzegovina and 71 per cent in Serbia.
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A solution?
The émigré entrepreneurial effect is more pronounced when you examine it through a gendered lens. With the number of women that have emigrated into OECD countries tripling from 1990 to 2010, there are more women on the road heading towards countries where they can be who they want to be than ever before.
"We have this image of the migrant as a young man embarking on his journey, but globally it’s 50 per cent women who are moving for better opportunities.” – Barbara Rambousek
When these women return home, Ms Rambousek says there is a very high percentage of them that start up their own businesses, contributing their new skills and business opportunities to help develop their home economies. “But perhaps the most important thing they bring back with them are differing ideas of what it means to be a women in society, to have autonomy and economic independence,” she said.
This returning liberalising effect is something Manuel Costescu observed during his time as the Romania’s State Secretary for Trade and Investment. 20 years ago, Romanians didn’t dream of anything except leaving the country, but after large scale, long-term investment in the country, many Romanians want to return home. When émigrés do return, they push the dialogue on values way beyond the country they left behind might have done otherwise.
“The role of the two million people in the diaspora is to help their families back home in the natural coming of age process of a society towards the values we have embraced in the EU,” Mr Costescu said. “[One that] acknowledges liberal values, gender equality, growth, diversity and the role of the individual.”
With figures from our latest Transition Report suggesting that nearly 20 million residents of regions that the EBRD invests in were contemplating moving abroad in 2015, finding ways to effectively integrate these populations into their new countries – while still investing in the home countries that they may return to – will continue to be the EBRD’s priority.
