Beyond The Refugee Crisis: Combatting Educated Outmigration

This article first appeared in the Frankfurter Allgemeine Zeitung on 23 April 2016

One need only glance at the headlines of any major news carrier to know that human migration has become a defining issue of the post-Cold War global economic order. But while European leaders squabble about the line between migrants and refugees, forge deals with Turkey and debate the residual significance of an outdated Refugees Convention, decision-makers are missing a big part of the puzzle.

By 2013, 86 percent of the 96 million international migrants residing in developed economies came from the so-called ‘Global South’ — a total of 82 million persons. For many of these people migration is not a choice, but a necessity. Add into the mix the issue of civil conflict, and the line between voluntary and involuntary migration becomes even less conspicuous.

If Europe wants to stop the flow of people seeking safety, decent work and meaningful opportunity, the dynamic of outmigration needs to be dealt with alongside states’ refugee obligations. It is time to look beyond ‘managing’ refugee flows. Attention must focus on the causal factors driving outmigration, irrespective of what drove a person to cross their border. And by the way, the solutions may also promote peace, development and prosperity in the region the world seems most worried about.

Who wins and who loses as a result of migration has become one of the most politicised and misunderstood questions of the 21st century. Contrary to popular opinion, the evidence is that moderate migration is nominally positive for both hosts and migrants and creates mixed outcomes for countries of origin depending on their size and wealth. Where migration is moderate, and the country of origin is medium-sized or growing, the ‘brain drain’ is largely compensated for by remittances.

However for poor, small countries — because the incentives to leave and not return are so high — migration often surpasses a tipping point beyond which any benefits associated with remittances can accrue. Such dynamics can be seen playing out in many countries in the West Asia-North Africa region, including Jordan, Lebanon and Palestine. Excessive net outflows of talent constitute a serious setback for advancing knowledge-based economies by exacerbating the disconnect between policy makers and intellectual elites and driving remittance-induced inflation and unemployment.

Here’s what most commentators on the migration debate don’t know (or perhaps chose to ignore). While countries of origin are typically presented as the overall losers in migration, the situation reverses dramatically if emigrants return. The reason lies in the institutional and political differentials between poor and wealthy countries. Masterfully elucidated in their book ‘Why Nations Fail’, Acemoglu and Robinson explain that poor countries are poor because they lack ‘inclusive’ economic and political institutions; institutions that encourage productive growth and innovation by providing secure property rights and opportunities, and distribute political power widely and income fairly equally. These institutions are the reason why emigrants are more economically productive when they pass into a developed country. Critically, when in wealthy countries, emigrants learn and absorb the norms and characteristics of inclusive institutions, and take this with them if they return to their countries of origin. The transformative potential of migration thus rests, not in remittances or income gains, but in long-term idea and norm transfer.

Such reasoning arguably extends to involuntary migration — the case of states, such as Syria, whose labour force is fleeing conflict, not chasing opportunity. The refugee debate is so sensitive that it has crowded out any discussion of measures to protect conflict-affected countries from losing their human capital permanently through resettlement or host labour market integration. This is certainly not to suggest that the Syrian government should be protected from any form of out-migration. At the same time, refugees that are strategically resettled or absorbed into economies in large numbers are increasingly being understood as an economic asset for growth and development. President Obama’s welcoming into the US of Syrian scientist, Refaai Hamoo as a refugee, showcases the intellectual and development losses that countries of origin suffer as a result of refugee resettlement, and the benefits that recipient countries can gain.

The challenge is how countries can retrieve this stock of economic and social human capital, particularly when control rests in the immigration policies of receiving countries and incentives to voluntarily return are low. What policy measures are needed to convince the Jordanian scientist living in the US or the Syrian economist resettled to the UK to use their skills to rebuild and/or strengthen the economies from which they hailed?  And what are the ethical obligations of labour-importing countries to protect countries of origin from losing out to poorly regulated out-migration?

These are complex questions, not only because of the difficulty in regulating international labour markets, but because they touch on the sensitive issues of the limits of market capitalism and Western interventionism.

Yet it is a mistake to shy away from discussions because their connotations are unpleasant. Receiving countries need to think seriously about the social and economic externalities migration creates, and from this, a notion of ethical migration — a right to respect — needs to evolve.

We must also acknowledge the realities of the world in which we live. It is human nature to seek out a better life and it is always better to incentive choice than to control. Opportunities must be built for people, not only to stay, but to leave for education or skills enhancement and then return. China and India have deftly overcome their out-migration challenges by offering attractive business development opportunities and a rewarding investment infrastructure to re-attract expatriate workers. Of course, these countries have the good fortune of boasting two of the fast growing economies in the world. Others that are not so fortunate will need help.

In 1977, I proposed that the International Labour Organisation develop a compensatory scheme to reroute profits accrued through out-migration back into developing countries. The main modality proposed — to tax professional emigrants or their employers — is unlikely to work; the evidence is that tax revenues would be offset by reduced remittance and negatively impact social cohesion. But this does not mean that the thinking should stop.

Most probably, the answer lies in a combination of mechanisms ultimately geared towards sectorial diversification and encouraging return migration. Developed countries, for example, might think about structuring aid along lines to create opportunities and promote diversification, low interest loans to incentivise investment and increased market access in selected sectors.

In parallel, countries of origin need to be proactive. They need to think about bold policies to promote return migration, even in the face of high national unemployment, and continue to invest in the education sector, even when it appears that such investments are being lost to other economies. At the back of our minds should be the International Labour Organisation’s Fair Migration Agenda.

These are the steps needed to turn chaos into opportunity. As the Europe migration crisis is so aptly demonstrating, migration and opportunity are not only mutually constitutive, they are a shared responsibility.