Select Committee on International Development Memoranda


Evidence submitted to the House of Commons International Development Committee - Migration and development inquiry

Frank N. Pieke, Nicholas Van Hear and Steven Vertovec

ESRC Centre on Migration, Policy and Society (COMPAS)

University of Oxford

10 November 2003

1. General

The British Economic and Social Research Council (ESRC) has recently awarded the University of Oxford a grant for a new national research centre on migration. With renewable core-funding for an initial five-year period, the mission of the CENTRE ON MIGRATION, POLICY AND SOCIETY (COMPAS) is to provide a strategic, integrated approach to understanding contemporary and future migration dynamics across sending areas and receiving contexts in the UK and EU. COMPAS staff who are the authors of this document have long-term research experience in the field of international migration. Frank Pieke's main field of expertise is Chinese migration and the impact of diasporic links on sending areas. Nicholas Van Hear is an expert on conflict, migration and development, in particular in Africa, the Middle East and South Asia. Steven Vertovec has worked extensively on transnationalism, including the issue of remittances and their impact of sending areas.

Any assessment of the impact of migration on development has to start with the observation that international migration is a normal and unavoidable aspect of the globalisation of capital, cultural products and other goods, information and people. Globalisation involves much more than flows from the poorer peripheral areas of the world system to the richer central areas. Flows between peripheries are at least as important. However, if left completely to the forces of the market, the impact of globalisation is nevertheless likely to privilege the stronger and more developed parts of the global system. The question therefore is not so much if development policies should incorporate the effects of migration, but rather how such policies should maximise the benefits that migration can bring for the often poor and vulnerable populations in the sending areas, while minimising its potentially less positive aspects.

For many years, the migration of skilled workers from developing countries was regarded solely as a problem of 'brain drain.' With the recognition of networks of skilled worker circulation, many social scientists and national policymakers have tended to shift from a discourse of 'brain drain' to notions of the globalisation of human capital, brain exchange, brain circulation and the creation of a global mobile workforce. The idea is to accept the fact that skilled persons may want to migrate for personal, familial and career development, while seeking to encourage the skilled migrant's return, mobilisation or association with home country development. Indeed, it is transnational networks of professionals that are deemed crucial to realise such goals.

Until recently, migration and development have constituted separate policy fields, marked by different and sometimes contradictory approaches. For the authorities that deal with migration in the UK, the control of flows has become the priority, while development agencies have concerns that the objectives of development policy may be jeopardised if migration control is accorded primacy. Can long term goals of poverty reduction be achieved if short term migration policy interests are to be met? Can partnership with developing countries be genuine if preventing further migration is the principal migration policy goal? While there may be good reasons to keep some policies separate, conflicting policies are costly and counter-productive, particularly if these conflicts are not debated and where possible resolved because of the lack of mechanism that brings together the separate government departments with a stake in migration.

In this document we will discuss these policy considerations in the context of research conducted in our specific areas of expertise: remittances, diasporic links, and forced migration and asylum. In the concluding section and recommendations we will return to the general issue of the connection between migration, development and policy making.

2. Remittances: flows, uses and impacts

Migrants influence the development of their home countries by the resources and assets they send or bring back with them. However, these resources are not evenly distributed, and there is a tension between the remittances that migrants and refugees send, and the benefits of the return or repatriation of migrants and refugees.

Remittances are an important resource for many households in developing countries. Because they move directly from person to person, they may have a more direct impact than other resource flows. But the benefits of remittances are selective. Though not exclusively, they tend to go to the better-off households within the better-off communities in the better-off countries of the developing world, since these households, communities and countries tend to be the source of migrants.

In societies in conflict or emerging from conflict, remittances from abroad help households to survive and to sustain communities in crisis - both in countries of origin and in neighbouring countries of first asylum. After conflict, remittances are potentially a powerful resource for rehabilitation and reconstruction. But again there is selectivity: these transfers reach relatively few households. At the same time, remittances and other transfers, as well as international lobbying by diasporas, may actually help to perpetuate conflict.

The sheer scale of contemporary global remittances itself represents a significant contemporary form of social and economic transformation. Figures from the International Monetary Fund (IMF) show a massive increase in the amount of formal remittances world-wide, from less that $2 billion in 1970 to at least $105 billion in 1999. Over 60 per cent of this amount goes to developing countries, and over the last decade remittances have become a much larger source of income for developing countries than official development assistance.

Remittances have broad effects, including the stimulation of change within a variety of socio-cultural institutions (such as local status hierarchies, gender relations, marriage patterns and consumer habits). However, it is the economic impacts of remittances that receive most attention. More research on social and cultural impacts would greatly improve our understanding of the nature and trajectory of remittance flows, as well as provide for more effective policy decisions and instruments.

In numerous settings around the world, remittances have been shown to be directly invested in small businesses such as manufacturing and crafts companies, market halls, bakeries and transport agencies. However, various studies show differing proportions of remittances spent on consumer goods versus 'productive' investments. Among the reported negative impacts of migrant remittances are the following. Remittances are said to: displace local jobs and incomes; induce consumption spending (often on foreign imports); inflate local prices of land, housing, and food; create disparity, envy between recipients and non-recipients; and create a culture of economic dependency.

It must be stressed that a large proportion of migrants send money to families for mere subsistence. Also, schooling and other costs of education are often not factored into studies on the 'productive' use of remittances. It has been argued that many forms of consumption, particularly on housing, better food, education, and health care, are a good form of investment that will lead to higher productivity and positive economic development at local and national levels.

Most experts on remittances argue that recipients are not getting their full worth. Most formal financial transfer institutions charge a fee from 6 to 15 per cent and additional costs can make the total deduction over 20 per cent. It is widely believed that the worth of remittances would be much higher if the cost of transferring money was lower. There are currently a number of moves among governments (such as the USA's Wire Transfer Fairness and Disclosure Act of 1999), among NGOs and in financial institutions themselves to create more transparency in pricing and greater consumer awareness.

In many places one of the most common and extensive uses of remittance money is toward health care expenses. Some NGOs are developing schemes to creatively use remittances to provide regular transnational health care coverage. A different kind of multiplier or 'protective effect' concerns the general development of health profiles among remittance-receiving families. Remittances offset the effects of poverty by raising standards of living, improving nutrition and facilitating access to medical care.

Micro-finance Institutions (MFIs) have the potential to meet a massive global demand for local banking services that many governments and donor agencies increasingly recognise as a priority. A core function of MFIs is to provide small, low-interest loans (microcredit, e.g. from $10 to $3,000) and savings services to poor families - and often specifically to women - who ordinarily do not have access to formal financial institutions. Such loans are to help people engage in productive activities (involving, for instance, small farms, petty trading, craft enterprises or local business). MFIs offer credit, savings and insurance in often remote rural areas. They also may give financial and business advice and training. Many MFIs are non-profit NGOs, credit unions or co-operatives while there are also new commercial MFIs. Currently augmented by new information technologies, MFIs are growing in number, extent and function throughout the developing world.

3. Tapping the diaspora for development

Beyond seeing migrants as a source of resources for development and reconstruction, steps could be taken to give diasporas a more active voice. These could include involving diasporas in international forums to co-ordinate resource flows from donors and from diasporas for development and reconstruction. In addition, diasporas could be allowed greater influence in peace-building and reconciliation efforts. Since non-governmental organisations have become increasingly involved both in advocacy and in the delivery of aid, and often have direct lines of communication with diasporic groups, they are well placed to act as interlocutors promoting diaspora participation. One problematic issue in such diaspora involvement is that of representativeness, given the conflicts and tensions that often feature within diasporas.

There is a considerable range of diasporic organisations involved in development in regions such as China, Africa and Latin America. These include Home Town Associations (HTAs), ethnic associations, alumni associations, religious associations, professional associations, investment groups, political groups and supplementary schools. Their activities include community-to-community transfers, identity-building, lobbying in current home on issues relation to homeland, trade and investment with homeland, and payment of taxes in the homeland. These kinds of transnational migrant institutions and activities are increasingly found around the world among migrant communities from highly diverse origins in developing countries. Their structures, strategies and influences on local and national development are only minimally understood.

There have emerged a number of schemes and types of transnational networks of expatriate professionals that can be tapped to enable their effective and productive role in a home country's development - even without any physical temporary or permanent return. Although such links have existed in one form or another in the past, they are now becoming systematic, dense and multiple. The Chinese government, particularly at the local level, has built up an extensive framework of policies and institutions to mobilise diapora Chinese for investment and donations in China, both in their home communities and elsewhere. As a result, overseas Chinese (including Hong Kong and Taiwan) account for the bulk of foreign direct investment in China, and other sending countries such as India now activily seek to emulate the success of China. The United Nations Development Programme supports major initiative in this field called TOKTEN (Transfer of Knowledge Through Expatriate Nationals; see Country-specific TOKTEN programmes involve databases of people and assisted visits of skilled expatriates to engage in various development projects.

The movement of students should be seen as an integral part of transnational migration systems, not least because the networks they forge often lay the tracks of future skilled labour circulation (among governments there is growing awareness of this, seen in the increasing incidence of national programmes for student recruitment with a specific view towards longer-term or permanent settlement). This is an area of massive expansion around the world with multiple social, cultural and economic repercussions for both student-sending and student-receiving countries; there is little good research and analysis on this sector.

Several migrant-sending states have sought to establish economic schemes, such as special investment funds or savings accounts, to channel remittances and encourage business development. These have met with very mixed results. The Multilateral Investment Fund of the Inter-American Development Bank promotes and funds initiatives that will allow emigrants to invest their money in development projects in places of origin. In 2001 the Fund extended a grant of $1.1 million to support projects in Mexico facilitating the linkage of remittance transfers, local financial services and productive investments by migrants and their families. This might be seen as a model that could be emulated in other regions.

The Mexican government's 'three for one' programme can be seen in many respects as a positive model of state collaboration surrounding migration, remittances and development. Through this system, each dollar remitted from abroad through a Home Town Association (HTA) is matched with one dollar from the federal government, one from the state government and one from the municipal government. Between 1999-2001, migrants invested $2.7 million into such programmes. Despite some limitations, these initiatives in Mexico have produced a deep impact in the local communities and have been recognised as new and effective forms of public-private collaboration.

HTAs are not the only players in these kinds of schemes. Financial services firms such as Raza Express have joined in, contributing $0.75 to the collective funds for each $300 sent through their company. In this way Raza Express has contributed more than $50,000, alongside $500,000 from the government of Jalisco, in schemes creating 15,000 jobs.

HTA activities embrace charitable work such as donating clothes, goods for religious festivals and construction materials for repairing the town church in the place of migrant origin. They raise money for improving local infrastructure such as sewage treatment plants and health care facilities. They support educational institutions, such as providing scholarships and library books. Yet another kind of HTA activity involves managing collective capital investment for income-generating projects in sending contexts that are often co-managed by locals and migrants. HTAs also play a significant role in organising disaster relief following catastrophes such as Hurricane Mitch in Central America in 1998 and the earthquakes in Turkey in 1999 and in Gujarat in 2001.

In proportion to total remittances sent through families, collective remittances channelled through HTAs and other migrant transnational frameworks are small although likely to increase. Despite this fact, and that of the sometimes problematic nature of such organisations and their relationship to the state, the forms of institutionalisation they represent have much valuable potential for effectively directing remittances to highly needed and effective forms of local development.

4. Forced migration and development

Like 'voluntary' migration, forced migration has important implications for development.. Refugee flight involves the loss of labour, skilled workers and capital for the country of origin. But it also opens the possibility of remittances from refugees who manage to find employment. However, refugees hosted in developing countries usually have less in the way of earning potential and therefore less remittance power than those in more prosperous asylum countries.

Remittances and their impact may be more diffuse than is the case with conventional economic migration, since refugees in western countries, for example, may send money to refugee kin in first asylum neighbouring countries as well as to kin in the homeland.

Mass arrivals of refugees - usually in countries neighbouring those from which refugees have fled - may have short term damaging effects, particularly in terms of strains on the resources hosts must provide. However, in the longer term the impacts of such mass arrivals may be more beneficial, particularly in terms of the economic, human and social capital newcomers bring with them.

While much attention has been paid to refugee outflows and to refugee repatriation, countries that have hosted refugees, particularly for protracted periods, have often been neglected. Conditions for refugees in such countries have tended to be poor, encouraging instability and movement further afield. Neglect has continued after refugees have repatriated: little attention is paid to the countries and communities that have hosted refugees after they return home. Yet these countries and communities are often poor, unstable, or vulnerable to instability from the spill-over effects of conflict in their neighbours' territory. With some justification, and pointing to the neglect of the principle of responsibility-sharing, some developing countries hosting refugees have responded by becoming less willing to accommodate new inflows. Directing aid to such countries would recognise the contribution such refugee-hosting countries make, and encourage them to maintain a liberal policy towards receiving refugees.

5. Relationship between migration and development

There is no unequivocal one-to-one relationship between migration and development. Research has demonstrated that economic development initially may very well stimulate migration as the local population parlays some of their new wealth into migration, before reducing the level of migration again with the gradual disappearance of the income gap between sending and receiving countries. Similarly, some types or flows of migration have a positive development impact, others a negative or neutral one. For instance, migration of skilled workers may be detrimental to development in some countries, while being part of developmental policies in other countries that train the very same skilled workers specifically for export (for instance the contrast between the migration of Zimbabwean and Filipino nurses). However, assessing the impact of migration also depends on our priorities. If relief of immediate hardship or raising the standard of living of migrants and/or their direct dependants in the areas of origin is our first objective, potentially many more or other forms of migration are positive than when we are seeking to encourage a broader pattern of sustainable development in the areas of out-migration.

The relationship between migration and development also includes the important issue of the formation of cultures of migration that make sending areas permanently dependent on the continuation of out-migration. The latter is often considered a negative development, but how justified are we in wishing to impose a policy agenda that prioritises local development over international migration as the preferred venue for increasing one's well-being?

Whatever our priorities, key factors determining the impact of migration on development in a particular area are likely to be:


·  The role, effectiveness and policy objectives of the local and national governments in the sending area

·  The reasons and motivation for migration: is it poverty driven, opportunity driven, or driven by natural or man-made calamities?

·  The socio-economic background of migrants, i.e. the issue of the selectivity of migration

·  The extent to which migrants can and wish to retain their link with the sending areas, which includes the issues of remittances and their use, return investment, return visits and return migration

In order to realise its potential, international migration should be considered in a broader policy framework than just its impact on the UK, where migration is largely phrased in negative terms: the issues of asylum, illegal migration and the purported burden on the welfare system and labour market. Migration ought to be viewed as constituting important opportunities: for individual migrants themselves, for the UK economy, for relieving the disruption and suffering caused by political upheaval and natural disasters, and for leveraging the impact of developmental policies in the sending areas.

Migration policies should facilitate the mobility of people in conjunction with the mobility of goods, capital and information. Governments should move away from viewing migration as a one-off and one-direction process that removes people from one place and permanently inserts and ultimately integrates them in another. Policy should enable the permanent mobility of people, which importantly also includes temporary or permanent migration back to the country or area of origin.

6. Recommendations

·  There is no simple one-to-one relationship between migration and development. One-size-fits-all policies that try to maximise the developmental impact of migration regardless of context are bound to fail. However, it should be recognised that migration - importantly also through concomitant remittances - will continue to represent a major source of development potential for many migrant-sending countries and localities. With further analysis of, and support for, remittance transfer and investment mechanisms - perhaps combined with managed migration schemes especially for temporary, low-skilled workers - the long-term development of a substantial number of countries might be enhanced greatly.

  Concrete measures to increase the level and developmental impact of remittances could be:

1.  Government support for efforts to reduce the transaction charges among remittance agencies;

2.  Government support for projects enabling 'transnational health care coverage' through remittance investment.

·  Conversely, aid policies should take greater account of the impact of migrants' remittances, so as to foster complementary roles for the two kinds of flow to developing countries. Remittances are great potential resources for development and reconstruction, but the distribution and benefits of remittances are skewed. The provision of aid needs to take account of such uneven distribution, with particular focus on poor countries and communities that do not benefit from remittances, and should take into account the developmental value of 'non-productive' remittance spending (especially nutrition, health care and education). Regarding forced migration, aid should be allocated on the basis of need in neighbouring countries hosting refugees, not with the purpose of containing international flows of migrants and refugees. Policies that aim to contain refugees in countries or regions of origin will likely be counter-productive because they tend to weaken and destabilize refugee-hosting states, and may lead to further refugee outflows within the region and beyond - contradicting the very objectives of such containment policies, as well as hindering development in such countries.

Concrete measures could be:

1.  More research into the potential frameworks, forms and benefits of Micro-finance Institutions (MFIs), such as credit unions, as a mode of channelling remittances and broadening their positive impacts;

2.  Government support for schemes such at the UNDP's TOKTEN, as well as further research into the actual uptake and impacts of such schemes;

3.  Government support for, and collaboration with, initiatives of international development agencies for channelling and matching funds in relation to collective remittances;

4.  Government support for migrant Home Town Associations (HTAs) as significant players in the economic development of sending localities;

·  Migration policy has actively to prioritise the interests of the poor and the poor areas of origin of international migration over the interests of the richer developed areas of destination. In order to argue effectively for this the objectives of UK development policy in relation to migration need to be stated clearly. Furthermore, an inter-departmental governance mechanism is needed that will in future ensure that DfID's objectives and experience adequately inform migration policies of other departments, such as those of the Department of Health on recruitment of skilled health professionals, those of the Home Office in relation to return of asylum seekers to post-conflict societies, and those of the Department for Education and Skills in relation to overseas students. The experience of the EU High Level Working Group on Migration and Asylum holds some important lessons, not least that UK and EU partnerships with developing, migrant-sending countries need to be more soundly and equally based, and not grounded solely in migration containment priorities as they have tended to be hitherto.

·  Management of international migration requires bilateral and multilateral co-operation between nations, in which international organisations and the organisations of migrants themselves play an important role. This could be done by establishing multilateral partnerships between sending and receiving countries, but also partnerships between regional blocs of sending countries may give the development impact of migration a greater say in the international discussion on migration.

?  The role of local government in sending areas is a crucial factor in determining the nature and impact of migration. Local governments that take an active interest in the orderly flow of migration have much greater scope in harnessing migration for further developmental goals. The UK and its partners should therefore actively seek to establish partnerships with such local governments. However, it should be borne in mind that policy agendas of national and local government may conflict, and furthermore that the priorities and reach of local governments vary greatly, even within one country, and careful consideration should be given to what is can and should be achieved in each case.

?  Regulating and increasing the channels of migration for both skilled and unskilled migrants that also enables migrants to achieve their objective of free mobility between several countries, including the UK and their country of origin, rather than simply obtaining permanent residence in the UK. This will both help to stop the abuse and excessive costs of illegal migration, and will give governments of sending and receiving areas a greater impact on the migratory flows. Policy aimed at simply restricting migration will only exacerbate the problems of illegal migration and the abuse of the asylum system, student migration visas and family reunion. National government and international agencies cannot stop the international flows of people, but can only have a limited regulating role: we should not overestimate the impact that migration management can have: "migration management" is no magic wand.

Concrete measures could include:

1.  maintaining flexible asylum and resettlement policies that relieve pressure on poor first asylum countries hosting refugees;

2.  allocating temporary work permits to workers from poor countries both to meet labour shortages in developed countries and to enhance remittances to their homelands;

3.  ensuring sensitive recruitment of highly skilled workers to avoid depleting developing countries of human capital;

4.  introducing flexible citizenship or residence rights to allow migrants to return to home countries without prejudicing their right to stay in host countries.

?  Return of migrants and refugees should not always be the over-riding policy goal. Returnees can be a substantial force for development and reconstruction of the home country, not least in terms of the financial, human and social capital migrants and refugees may bring home with them. However, there is the dilemma that return of migrants may reduce the flow of remittances to the home country. Furthermore, if the resolution of conflict or crisis is accompanied by large scale repatriation, the society and economy may not be able to cope with the sudden influx of returnees, raising the potential for further instability, conflict and, ultimately, renewed out-migration.

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