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Labour migration cuts will hurt developing countries, says World Bank

[Jordan] Migrant workers in Jordan are protesting work abuses. [Date picture taken: 10/01/2006] Maria Font de Matas/IRIN
Several industrialised countries, including Spain, the United Kingdom and Italy, are cutting foreign worker migration quotas, which migration experts call a “mistake” for the economies of both developing and industrialised countries.

Khalid Koser, migration specialist at the Geneva Center for Security Policy told IRIN: “These hits come on top of the 2008 global food crisis and high commodity prices, as well as [slow] progress on the Millennium Development Goals, accentuating some already negative trends for the developing world.”

Much of sub-Saharan Africa has yet to see the full impact of the global financial crunch, but in the coming months higher unemployment and cuts in investment and aid will combine with a cut in remittances to show “the real impact”, Koser said.


The number of would-be migrants affected is unknown, World Bank chief economist Dilip Ratha said. Meanwhile more countries are announcing cuts. The UK has introduced a points-based system favouring highly skilled over unskilled migrants, Australia has reduced skilled migrant intake by 14 percent and Spain has introduced a migrants “voluntary return” programme.

Italy will soon introduce tougher requirements for residency permits, according to International Labour Organization (ILO) and World Bank staff. And in the United States the February 2009 stimulus package makes it more difficult for beneficiary firms to hire high-skilled foreign workers.

A UK Home Office spokesperson told IRIN: “We’ve always said we would run our immigration system for the benefit of the UK and that is why we introduced a flexible points system, which allows the Government to control the numbers of people coming to the UK from outside Europe."

She continued, "We have already demonstrated that flexibility by putting a stop to low-skilled labour entering the UK from outside Europe.” 

More on impact of financial crisis on poor countries
 "Crisis upon crisis" for poor countries
 Mortgages and mortality
 Remittances set to fall in 2009

But the World Bank’s Ratha told IRIN: “A crisis is the worst time to impose immigration restrictions both for the sending and the destination country.”

Migration specialist Koser agrees: “Reducing quotas are a mistake because governments are responding to public pressure rather than the reality.”

Government officials in Liberia say the cuts will increase poverty. Liberia’s deputy Finance Minister, Samuel Marwolo told IRIN, “Remittances from legal labour migrants have already slowed, and should governments enforce quota cuts, it would contribute to the level of poverty in the country.”

In 2007 remittances to developing countries surpassed official global development aid by 60 percent, according to the World Bank.

Remittances from migrants to developing countries are set to drop by five to eight percent in 2009 according to the latest World Bank research, in contrast to double-digit growth in the last five years.

“As a result, a large number of poor households in developing countries, especially poorer remittance-dependent countries, will suffer,” economist Ratha said.


Quota cuts stem from a rapid rise in unemployment in industrialised countries, according to ILO migration specialist Patrick Taran. The unemployment rates in the UK, Italy and Spain are 6.7 percent, 7 percent and 17.4 percent, respectively, and rising. Spain’s rate is currently the highest in the European Union.

But some sectors that are highly dependent on migrant labour – such as agriculture – are not expected to see a significant decline in demand, though others such as construction, manufacturing, hospitality and retail services are facing sharper cuts, according to Taran.

Former shea nut exporter Joseph Attah (not his real name) in Ghana’s capital Accra said his business recently collapsed partly because exports have dwindled. He said the migration quotas could push people to move illegally. “My family and friends are pushing for me to travel. [They mention Libya]. With more pressure from governments some might be forced to use these dangerous means to get to Europe.”

Unemployment rates for the formal sector are 20 percent in Ghana and 85 percent in Liberia, according to the most recent World Bank figures.

Lower legal migration generally means lower clandestine movement according to Ibrahim Awad, chief of ILO’s migration branch. Nonetheless tens of thousands of Sub-Saharan African migrants are expected to attempt to travel to Europe, without papers, in 2009.

“Migration is rational. Migrants estimate costs and benefits of staying and moving,” Awad said. “At times they may over-rate benefits and under-rate costs, which is at the origin of the tragedies we see of people making attempts and ending up in dangerous situations.”

Attah in Ghana is not making the move yet. “I would have loved to enter a developed country with a visa, to help my family, but for now I will not try as it is not realistic for me. I am still looking for another job here…and I will keep going until I drop dead.”


This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

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