Are Migrant Arrivals In Europe Good For The Global Economy?
Get used to large-scale migration from poor countries to richer ones.
It’s going to go on for decades, becoming a permanent feature of the global economy as a result of major population shifts in countries, the World Bank said in its newly released Global Monitoring Report 2015/2016.
Migration will reshape economic development and pose challenges, but it offers a path to shared prosperity and an end to poverty if the right policies are put in place nationally and internationally, the report said.
A joint effort of the World Bank and the International Monetary Fund, the report was released this week in Lima, Peru, which played host to the two institutions’ annual meetings for 2015.
Refugees and migrants arriving in Europe could be a solution to a world struggling to recover from the economic crisis, the report said.
The direction and pace of this global demographic transition varies dramatically from country to country, according to the report, with different implications depending on the country’s economic development and the age of its population.
Countries at all stages of development can harness demographic transition as a development opportunity, said World Bank Group President Jim Yong Kim.
“With the right set of policies, this era of demographic change can be an engine of economic growth,” Kim said in a prepared statement. “If countries with aging populations can create a path for refugees and migrants to participate in the economy, everyone benefits. Most of the evidence suggests that migrants will work hard and contribute more in taxes than they consume in social services.”
More than 90 percent of global poverty is concentrated in lower-income countries with young, fast-growing populations that can expect to see their working-age populations grow significantly, according to the report. Simultaneously, more than three quarters of global growth is in higher-income countries with lower fertility rates, fewer people of working age, and rising numbers of elderly.
These demographic developments will challenge policymakers across the world in the years to come, said IMF Managing Director Christine Lagarde. The handling of migration flows will be at the center of national policy debates and of international dialogue on how best to cooperate in handling these pressures, Lagarde said.
At the global level, freer cross-border flows of trade, investment, and people can help manage demographic imbalances.
“While refugees are moving to rich countries, what is often overlooked is that the flows into middle- and low-income countries are vastly greater,” said Kaushik Basu, senior vice president and chief economist at World Bank. “Creating economic opportunities for countries with growing proportions of youth will contribute to economic stability and development and will help countries lower fertility rates, which contributes to stronger growth.”
In the short term, Europe needs accept responsibility for the refugees and respond fast, said Teddy Kaberuka, a Kigali-based independent economic analyst.
“There’s a need for quick integration of these people in the populations of the countries where they are going,” Kaberuka said in an interview with NewTimes. “Europe needs to take responsibility, expedite the process of processing papers for the immigrants so that they can legally be productive in those economies.”
African countries benefit from their populations abroad in form of remittances, Kaberuka said. Remittances sent home by African immigrants in the diaspora help reduce poverty.
The top five European Union countries to receive asylum applications include Germany, France, Sweden, Italy and the U.K., according to the U.N. Refugee Agency.
Countries of origin for migrants and refugees include Africa (Eritrea, Nigeria, Somalia, Sudan, Gambia); Middle East (Syria, Iraq); South Asia and Central Asia (Afghanistan, Pakistan,Bangladesh); and the Western Balkans (Kosovo and Albania).
Sign up for the Moguldom newsletter — business news you need to know about economic empowerment for the digital age, delivered to your inbox.