Migration and Development: Blind Faith and Hard-to-Find Facts
By Kimberly Hamilton
Migration Policy Institute
November 1, 2003
International migration's potential to promote the development of poor countries has resurfaced high on the international development agenda, and it is not surprising why. More people than ever live outside of their country of birth. The UN estimates that some 145 million individuals have made the trek to another country. Another roughly 30 million, primarily in the former USSR, have had new national frontiers emerge around them. While the overall number of migrants remains small relative to the world's population, the cumulative impact in a variety of areas is believed to be extensive.
There is broad consensus in the research literature that individual migrants and their families enjoy considerable benefits from migration, from higher wages to new training. Today's migrants have masterfully deployed globalization's tools—telecommunications, affordable international travel, and a global financial network—to maintain and expand relationships with their families at home and their communities of origin.
There is much less consensus, however, about whether or not those benefits can also constitute permanent, healthy, and structural change in the communities and countries from which migrants hail. Unfortunately, the link between migration and development is putative rather than proven. It is also often indirect rather than causal. Moving beyond blind faith in migration's transformative power to fact-based policy will require much more clarity on several key dynamics and contradictions that currently exist in the literature. This article examines five critical dimensions of the current debate that require additional focused research.
1. Courting the diaspora. Growing and increasingly organized transnational communities of migrants have arguably had the most profound impact on our understanding of migration and development. Today's migrants are less likely to be destined for long-term permanent stays elsewhere. Migrants are now able to travel back and forth more easily, to retain close contact with their families and friends, and, indeed, to build relations with other communities in third countries. The effect is in some ways revolutionary. Communities of national origin exist and operate far outside the boundaries of the nation-state. Their identity reference point is fluid, and their relationship with their home country is still largely unexplored.
The evolving global identity of transnational communities and their relationship to so-called "diaspora-induced development" has forced a reexamination of old migration models. These models, built on push and pull forces and fixed notions of permanent and temporary migrants, have proved incapable of embracing the complexity fostered by diaspora communities and relations. With the understanding that many migrants may prefer circularity to permanence, it is not surprising that sending country governments are moving quickly to capture the hearts and the purses of this important group. Attempts to embrace the diaspora more fully and to encourage circularity have expanded the conceptual and sometimes real notions of state boundaries and citizenship. It is equally unsurprising that countries that now must look to immigrants to fill crucial labor niches are revisiting notions of temporary migration, a longstanding taboo in migration policy circles.
2. Competing for remittances. Remittances, or the money that is sent home by migrants to their families and communities, are big business. By some estimates, over $70 billion in remittances worldwide ends up in developing countries annually, having doubled over the decade of the 1990s. There are some notable elements in the growth in remittances. The first is that remittances are now of special interest, having exceeded official development assistance. Yet, remittances are not equally distributed across the world, with the lion's share going to Latin America and the Caribbean and a decreasing amount going to Africa.
Second, as remittances have grown, so has the market to transfer them—with some interesting consequences. Increased competition for the lucrative remittance transfer business is driving down the fees that migrants have historically had to pay to send money home. This, in turn, has left more money in the pockets of migrants. Meanwhile, as the banking sector has become more interested in capturing a piece of the migrant money business, migrants themselves have received new opportunities to establish regular bank accounts, an important element in their own financial stability. Such changes in the institutional structure for the transfer of money may affect the amount, timing, use, and availability of remittances.
3. Thinking beyond remittances. By most accounts, remittances are the most visible, stable, and tangible link between migration and development. There is little evidence, though, that remittances provide a permanent ladder out of poverty. On the one hand, some studies indicate that remittances, by and large, support nonproductive consumption and stopgap poverty alleviation for many families. On the other hand, there is a growing body of empirical evidence that suggests that remittances can enhance savings and investments and can provide an important buffer against certain risks. In either case, there is no dispute that remittances used in this fashion are critical to the well-being of many families in poorer countries. The concern, rather, is that remittances may foster dependency on, not long-term investment through, external resources. It seems, at best, a distant hope that remittances could help families, communities, and countries remain permanently out of poverty. The enduring challenge is to link individual and family decision-making related to remittance expenditures and investments to broader development goals.
Nonetheless, there are elements emerging in the migration and development conversation that suggest that the connections between sending and receiving countries manifest themselves in far more subtle ways and have moved far beyond the transfer of labor to the transfer of ideas. For example, remittances have linked migrant home town associations to their communities of origin by engendering aspects of voluntary association, civic participation, and shared and transparent decision-making, all critical elements of good governance.
Further, migrants abroad have established small and not-so-small business enterprises that link to and draw from their country of origin. Some migrant groups are creating organized philanthropic efforts, which must make difficult and well-informed decisions about where and how to invest scarce resources. Migrants and their connections back home also foster return tourism that spans generations and provides important foreign currency for countries of origin. While it is difficult to measure these contributions, a problem that further complicates hard empirical analysis, these new social and economic configurations hold promise for development.
4. Accounting for migrant characteristics. With remittances on the rise, there is growing interest in who remits, how much, and for how long. Some evidence suggests that remittances may peak and then decline over time, as the family reunification process is completed and immigrants have children themselves. For temporary migrants, however, the dynamics are unlikely to be the same.
Beyond this, legal status as well as gender may be factors. Undocumented immigrants tend to congregate in low-wage and informal sectors and cannot easily traverse national borders, thereby limiting their remitting potential. More research is needed, as well, on refugee communities and their continuing involvement in their home countries as agents of change or funders of conflict. And, as more women migrate, independently and as family members, it is important to understand how they construct their own relationship to their communities at home and abroad, especially because women may tend to send more money home than men.
Attention to migrant characteristics is accompanied by an interest in how return migrants fare in the labor force once at home. It is unclear whether the skills and training learned abroad can be applied effectively at home. The conditions of return, the skills of the returning migrant, and the state of the domestic economy will all shape this experience.
5. Recovering the costs of brain drain. Migration and development optimists are quick to point to remittances as the unheralded engine of change. Pessimists are equally quick to target the perennial and unresolved issue of brain drain. To be sure, the loss of skilled citizens to foreign labor markets imposes a double penalty on developing countries. The cost of education quickly becomes a subsidy to already rich countries. This is compounded by the pure loss of talent and potential contributions to the domestic economy.
It is difficult to put a price tag on brain drain, though some governments hope to do so in order to recover some of the costs. Just as AIDS has eviscerated an entire professional class in Africa and threatens to do so in Asia, many are concerned that emigration and the recruitment of trained professionals from poor countries will do the same. The "poaching" of talent is magnified by restrictive immigration policies in destination countries that make circular migration difficult.
Several factors may offset brain drain's potential costs, including remittances, lack of employment opportunities at home or underemployement, and continued involvement of the transnational community (including the highly skilled) at home. In fact, some countries, such as the Philippines, have entered the skills export business with gusto, hoping to maximize their economic returns at home by remaining engaged with Filipinos abroad.
It is unlikely that rich and poor countries will be able to "split the difference" and balance the costs of brain drain against the (potential) benefits of remittances. Until then, brain drain and how it is managed are likely to become even more flammable tinder in policy and political circles.
The five issues addressed above only hint at the enormity of the undertaking. What has not been mentioned is that the migration field, in general, is seriously hamstrung by a lack of reliable and comparable data and, most troubling, persistent inertia in that regard. This paper has also focused entirely on migration from poor countries to rich countries. While the balance of migration has tipped numerically in this direction, there is an enormous amount of south-to-south migration, which may have its own set of characteristics and development outcomes.
In the absence of more research, it is not clear that migrants and migration will provide needed purchase on slippery development terrain. It is abundantly clear, however, that some of the solutions to maximizing migration's development potential are quite far from the migration arena, such as trust in the public sector and good governance practices. Faith in migration's potential is good. Facts, however, will be necessary to transform the vicious into the virtuous circle, without dampening the spirit that compels migrants around the world.
Kimberly A. Hamilton, PhD is managing editor of the Migration Information Source. This article originally appeared in the Metropolis World Bulletin, September 2003 (volume 3). More information on the Metropolis Project can be found at www.metropolis.net.
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