The BBC website showing the aid or immigration programme

Aid or immigration?

There was an interesting programme on BBC Radio 4 on Monday night, Analysis, which looked at the following question:

The government is committed to protecting the aid budget. Frances Cairncross asks whether a more relaxed policy on economic migration might help the developing world more.

I was interviewed for the programme, and there were three points I wanted to make, which I didn’t entirely get across. So here they are:

a. It is too narrow to think of the benefits of migration mainly in terms of remittances.  The benefits are much broader than that.  Michael Clemens used an excellent analogy in a CGD podcast: it is as if we were determined to talk about the impact of the increase in women’s participation in the workforce by the money that they contribute to the housekeeping.

b.  We should think about the impact of migration more in terms of the impact on people and less in terms of the impact on countries. In particular, there is a substantial benefit to the migrants themselves which should be at the front of our minds. (I sort of managed to make this point in the clip they used of me in the programme); and

c. there is not a trade-off between providing aid and supporting people from developing countries who want to live and work abroad: we can do both.

The programme will be broadcast again on Radio 4 on Sunday night at 21h30.  You can also download the programme from the BBC website. (Mirrored here.)  Here is the transcript.

5 comments on “Aid or immigration?”

  1. Thanks for posting the transcript – a most interesting program and glad to see this issue is being discussed seriously.

    A few things I was surprised NOT to hear:
    1) There didn’t seem to be any mention of Mexico’s innovative program for building on remittances by matching them 4 for 1, which is bringing development into exactly the poorest areas – because those are the ones most migrants come from in order to work in the US. There also wasn’t any mention of Home Town Associations, one way that groups of immigrants in countries like the US raise money to support communities back home.
    2) There wasn’t any mention of the innovative work of the InterAmerican Development Bank, which sees the lack of financial infrastructure in many remote regions of developing countries as one reason why people don’t invest their money. In Haiti, Fonkoze has developed a model of providing that kind of access, and it seems to be working very well.
    3) Emigration and remittances have tied together migrant-sending and migrant-receiving countries in many new ways. In fact, those countries have been trying for several years to work on ways to improve those relationships, recognizing how interconnected they now are as a result of migration. Among other things, this recognizes that when migrants jobs dry up because of lack of work, and they return home, their country’s economy takes a major hit and then more aid is required than would otherwise be the case.
    4) Migrants tend to do jobs that people in the receiving countries don’t want to do; if they leave, because there is no work, they leave a gap – and who will fill it?
    5) Remittances are a huge revenue earner for money transfer companies and banks in the developed world. Some far sighted banks, like the Spanish bank BBVA Grupa have created new business models to serve migrants in Spain. Their Dinero Express outlets provide both financial and non-financial needs. They recognize, in each migrant, a future bank client. One Spanish study showed that in the first two years, immigrants are focused on money transfers and calls home. In the next three years, they look for consumer credit, and after five years, for the mortgages and car loans that are more profitable for banks. Facilitating those first money transfers helps create long-term relationships between bank and immigrant.
    6) Somaliland provides a brilliant example of how remittances can rebuild a society after conflict. In fact, Somaliland developed a much more accountable system of government, some argue, because it had so little money that it had to plan collaboratively with NGOs and with ordinary citizens. Few international NGOs were interested in helping in Somaliland but Habitat did, in a most practical way, by helping two of the major cities restore their property taxation system. That meant that the local public governance system had the resources to provide services that supported individual rebuilding.

  2. Listened to the broadcast; interesting; obviously a very nuanced topic that does not lend itself well to a short documentary. My brief comments:

    1) The welfare state raises the reserve wage of its citizens which means that to take those jobs no-one else wants, there need to be immigrants to fill that job demand – which is the remittance source.

    2) The point that remittances, by by-passing government, does not exhibit the same resource-trap effects as other forms of money infusion I agree with.

    3) My field observation is that remittances act as an indefinite line of credit which is used mainly for consumption – not investment. This has more to do with the nature of the countries I have been to than remittances itself – ie high risk environments do not lend themselves to investments so we are now in the issue of institutional reform and enabling business environments.

    4) In so far as remittances replacing aid, that is a very superficial argument. Those countries which have taken it upon themselves to provide proper governance will receive some benefit from remittances in terms of investment and a backwash of experienced labour and know-how from its emigrants who have good reason to invest in or return to their own homelands. Those countries that do not provide such governance will receive little direct benefit. Such mismanaged countries do receive an indirect benefit in that the remittances release them to some extant from the negative consequences of their own policies.

  3. Just caught up with this interesting broadcast – I’ve not heard an MP propose migration as a way of cutting the aid budget before. Have to come back to you over one point, the migration of skilled workers. We’ve talked about migration of medical workers before, but I don’t think I’ve got across the ‘double-whammy’ when doctors migrate (internally or ‘overseas’): because doctors train the next generation of doctors, it isn’t just the service potential that migrates, it is the training potential too. Equally, I don’t believe that the possibility of emmigration is essential to keeping medical courses oversubscribed (but have little hard evidence for this, simply have met people round the world who apply to courses with broader/deeper motives).

    1. @Gail – Thanks. I think you are right to identify the possible systemic consequences of loss of skilled health workers from outward migration. Though we do have to bear in mind the simple correlation that the countries which export the most health professionals – places like the Philippines – also typically have higher domestic capacity, so it does not appear on the face of it that high emigration of health workers is damaging to the domestic healthy system.

      I was recently told that the UK immigration rules have changed in some subtle way which makes it harder for doctors to come to London for short-term attachments to be trained because there is some new constraint on their being able to work. It was not clear if this was a new constraint on grounds of licence to practice, or on grounds of ‘right to work’, but either way it sounds as if a retrograde step has been made. Do you, or do any other readers, know anything about this?

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Owen Barder

Owen is Senior Fellow and Director for Europe at the Center for Global Development and a Visiting Professor in Practice at the London School of Economics. Owen was a civil servant for a quarter of a century, working in Number 10, the Treasury and the Department for International Development. Owen hosts the Development Drums podcast, and is the author Running for Fitness, the book and website. Owen is on Twitter and