World Bank Report Says Migration Highly Lucrative
January 8, 2006
The World Bank says migration is here to stay, so nations around the world should try to get the most out of it.
In its annual report called "Global Economic Prospects for 2006," the World Bank estimates that 200 million people work abroad.
Dílip Rátha, a senior economist at the World Bank and co-author of the "Global Economic Prospects for 2006" report said migration was set to rise in the future.
"Looking 20 years ahead, it is almost certain that there will be more migration. In the rich countries, we have the problem of aging populations. All of these old people are going to need care... And then you have the number of people in Africa and poor countries exploding, and they are going to need jobs," said Ratha.
"At some point, these push and pull factors have to come together... And unfortunately, we have not prepared ourselves for this new world where there will be so much migration. The whole idea of living with migrant population has to be incorporated into the current lifestyle."
Reducing poverty through remittances?
Rátha said most discussions about migration focus on social and political
issues, such as integration, yet the World Bank reports that 90 percent of all people who migrate do so for economic reasons. In the fiscal scheme of things, nearly everyone wins.
"In the year 2005, international migrants sent $167 billion dollars to developing counties in the form of remittances," said Ratha. "India, Mexico and the Philippines were the three largest recipients of remittances in dollar terms, but in percentages of GDP, remittances were
largest in smaller economies like Tonga, Lesotho and Moldova."
The World Bank expert said that remittances by immigrant workers are a way of reducing poverty and strengthening economies in developing countries.
In fact, many developing countries receive twice as much money through funds sent by their nationals working abroad than through development aid, the report points out. Remittances even compose the greatest source of outside income for some countries.
Beneficial to host nations too
But, it's not just their native countries that benefit from the cash influx. Even the host nations reap advantages.
"Over time, because these migrants have arrived in the countries, they contribute to the economy, because they produce things, and they produce services, the size of the economy increases over time and there is more growth in the economy, and in the end, everybody benefits, including the natives themselves," Ratha said.
So foreign workers can contribute to economic growth in wealthy nations, while also helping to reduce poverty back home.
But there are a couple of preconditions, said Ratha.
Inflation must be low in developing countries for remittances to have a positive effect. High fees for fiscal transfers must be kept to a minimum.
And there is one significant drawback: less wealthy countries lose skilled employees when they go abroad.