Economic Emigration

Stephen DeAngelis

January 8, 2008

In a recent post, I discussed the dark side of the global commute as it is unfolding in Kurdistan [Kurdistan and the Global Commute]. The focus of that post was workers promised good paying jobs overseas, but who were duped into signing contracts that made them basically indentured servants. The hope of a better future is a powerful (and sometimes blinding) motivating force. Even without the promise of a job or the assurance of a contract, people in poor nations are on the move to find a better life [“A Global Trek to Poor Nations, From Poorer Ones,” by Jason DeParle, New York Times, 27 December 2007]. While most people think of economic refugees as those fleeing to developed countries, DeParle notes that more and more of them are fleeing to other developing nations. He begins his article in the Dominican Republic.

“The scrap-wood shanties on a muddy hillside are a poor man’s promised land. They have leaky roofs and dirt floors, with no lights or running water. But hundreds of Haitian migrants have risked their lives to come here and work the surrounding fields, and they are part of a global trend: migrants who move to poor countries from even poorer ones.”

The short move from one poor country to another is most often dictated by economics. If emigrants could afford to get to the developed world, they would probably try. But they can’t. As a result, they pack up their belongings and walk to the nearest more prosperous country. Unlike foreign workers described in my post on Kurdistan, these immigrants are illegal. This gives them even fewer rights than those who legally enter a country.

“Anes Moises, 45, a dark-skinned man with flecks of gray hair, … has worked the Dominican banana fields for more than a decade, always illegally. Farm bosses pay him $5 a day and tell him that Haitians stink. Soldiers have called him a dark-skinned ‘devil’ and deported him four times. Still, with the average income in the Dominican Republic six times as much as in Haiti, Mr. Moises has answered each expulsion by hiring a smuggler to bribe the border guards and guide him back in.”

Although illegal immigrants get a lot of attention in the United States, they move and live almost invisibly across much of the globe.

“Across the developing world, migrants move to other poor countries nearly as often as they move to rich ones. Yet their numbers and hardships are often overlooked. They typically start poorer than migrants to rich countries, earn less money and are more likely to travel illegally, which raises the odds of abuse. They usually move to countries that offer migrants less legal protection and fewer services than wealthy nations do. Yet their earnings help sustain some of the poorest people on the globe.”

I’ve noted in other posts that billions of dollars are sent home every year by workers living in countries other than where they were born. Most of this money comes from workers living in the developed world. DeParle notes, however, that billions of dollars are also sent home from those living and working in developing countries.

“There are 74 million ‘south to south’ migrants, according to the World Bank, which uses the term to describe anyone moving from one developing country to another, regardless of geography. The bank estimates that they send home $18 billion to $55 billion a year. (The bank also estimates that 82 million migrants have moved ‘south to north,’ or from poor countries to rich ones.) Nicaraguans build Costa Rican buildings. Paraguayans pick Argentine crops. Nepalis dig Indian mines. Indonesians clean Malaysian homes. Farm hands from Burkina Faso tend the fields in Ivory Coast. Some save for more expensive journeys north, while others find the move from one poor land to another all they will ever afford. With rich countries tightening their borders, migration within the developing world is likely to grow. ‘South to south migration is not only huge, it reaches a different class of people,’ said Patricia Weiss Fagen, a researcher at Georgetown University. ‘These are very, very poor people sending money to even poorer people and they often reach very rural areas where most remittances don’t go.’ Some south to south migrants are ‘pushed’ by wars and political crises. Others are ‘pulled’ by jobs and better wages. Some follow seasonal work. Some put down roots. Some countries — Argentina is one — have been quick to give amnesty to migrants. Others, including Nigeria and Indonesia, have subjected them to mass deportations. Many countries simultaneously send and receive large migrations. One reason there are jobs for Haitians is that so many Dominicans have left for the United States. The president, Leonel Fernández, was largely reared in New York City.”

The solution to the problem, of course, is not open borders but better economic conditions at home. Nobel prize winner Muhammad Yunus argues that not enough effort is being made to empower the poor. The poor are empowered, he argues, when they have jobs. His rap against the development community is that it has concentrated on creating jobs rather than helping the self-employed poor receive the credit they need to improve their personnel productivity. In his book Banker to the Poor, he wrote:

“When I talked about micro-credit in the 1980s, whether to World Bank economists or journalists, most people assumed that I was trying to alleviate poverty by lending to small businesses that would then expand and hire the poor. It took people a while to see that I actually advocated lending to the poor directly. Policy makers tend to equate job creation with poverty reduction and economists tend to recognize only one kind of employment — salaried employment. … Worst of all, economists have failed to understand the social power of credit. In economic theory, credit is seen merely as a means with which to lubricate the wheels of trade, commerce, and industry. In reality, credit creates economic power, which quickly translates into social power. … In many Third World countries, the overwhelming majority of people make a living through self-employment. Not knowing where to fit these individuals into their analytical framework, economists lump them in a catchall category called the ‘informal sector.’ But the informal sector really represents the people’s own effort to create their own jobs.”

In most developing countries, job creation (as we normally think about it) and empowering the poor self-employed are both needed. They are not competing but complementary concepts. Yunus, a former economics professor, was the first activist to understand the economic potential of those living at the very bottom of the economic pyramid. Through institutions like Yunus’ Grameen Bank, they have borrowed and repaid over a billion dollars in various types of loans. My company, Enterra Solutions, is not in the micro-credit business, but we are in the job creation business with our Development-in-a-Box™ approach. The combination of creating jobs and empowering the poor self-employed is part of the answer that will help reduce economic emigration. It will not, however, stop the movement of people displaced by conflict. Economic miracles are hard to find in areas of instability.