The Rocky Road to Globalization
As the Group of Twenty leaders gather in Turkey this weekend, they will have on their minds heartbreaking images of displaced people fleeing countries gripped by armed conflict and economic distress. The surge of refugees in the last few years has reached levels not seen in decades. And these numbers could increase further in the near future.
The immediate priority must be to help the refugees — who bear the heaviest burden, and too often tragically — with better access to shelter, health care and quality education.
No country can manage the refugee issue on their own. We need global cooperation.
Cross-border migration, of course, comes in several forms. It includes both refugees who are forced to leave their country and economic migrants who voluntarily leave in search of opportunities. This total number of migrants has risen significantly in recent years, now accounting for over three percent of the global population.
Regardless of the motivation, the decision to uproot and leave one’s home is difficult and can be risky. But once people pass through the journey, resettle and find stability, migration can — with the right policies — have an overall positive economic impact: for migrants, their host country, and their country of origin (as shown in forthcoming staff analysis).
Migrants can boost a country’s labor force, encourage investment and boost growth. Preliminary IMF calculations show a modest positive impact on growth from migrants in EU countries, for example.
More importantly, migration can also help address the challenges from aging populations in a number of advanced countries. What about countries experiencing an outflow of migrants? Certainly, these countries often lose their youngest and brightest, with important implications for growth. This has been the case in Caribbean countries, for instance, which lost over 50 percent of their high-skilled labor between 1965 and 2000.
Remittances help to counterbalance some of these effects. Indeed, they can be a very important source of income — which has been shown to lead to higher education and health spending. In 2014, remittance flows to developing countries amounted to $436 billion, more than half of total net foreign direct investment and well over three times as much as official development assistance.
What does a well-designed integration policy include?
- First, strengthening the ability of labor markets to absorb migrants — by enabling immediate ability to seek work and providing better job matching services.
- Second, enhancing access to education and training — by providing affordable education, language and job training.
- Third, improving skill recognition — by adopting simple, affordable and transparent procedures to recognize foreign qualifications.
- Finally, supporting migrant entrepreneurs — by reducing barriers to start-ups and providing support with legal advice, counseling and training.
In Sweden, for instance, an introduction program for refugees provides employment preparation and language training for up to 24 months, together with financial benefits. The program is beginning to help the latest inflow of refugees to find jobs — even though it will inevitably take time to fully succeed.
Demographic forces, globalization and environmental degradation mean that migration pressures across borders will likely increase in the coming decades. And cross-border challenges demand cross-border solutions.
Global policy efforts, therefore, must focus on better cooperation and dialogue among the affected countries.
The IMF will also do its part, including through our financing and capacity building. In addition, over the next few months, our analysis on this issue will feed into our policy advice to countries in Africa, Europe and the Middle East dealing with massive population movements.
Migration is a global issue. We must all work together to address it.