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06 09 2017

Why can’t people move freely between countries?

Should people have the right to move freely between countries? As it is well known, in large parts of the world, capital is already moving freely. And well-off people can move freely: in many developed countries, if you promise to invest enough, you get a permanent residence permit. But why limit this to well-off people? Why not let all people move as they want? It is a good question. But apart from the well-known problems in the country receiving the migrants, it is often overlooked that massive migrations carry high costs for the migrants. And the countries they leave behind tend to get stuck in a low level of development.

If we look at history, when our ancestors were agglomerated mainly in tribes, they were moving around in groups. They were conquering their neighbours, or they were conquered by them. Sometimes large groups of people were displaced by other stronger and more successful groups in large migration waves, or they were subjugated by the conquerors. In some cases the conquerors were absorbed by the people they subjugated – case of the Mongolians in China, the barbarians in Rome or the Vikings in England. Some times the different tribes ended up living together on the same land and gradually became culturally homogenized, but in other cases they lived intermingled, more or less peacefully, but separate, without being culturally homogenized. Most of the Middle East, and in particular the historical greater Syria, is a case. In general, few of us live on the same land that our ancestors lived on, 2,000 years ago.

The state has existed wherever tribes have been subjugated by a central power. These states were sometimes small and rather homogeneous, as the Greek City States 2,500 years ago, or they were a conglomerations of very diverse peoples with different languages, cultures, religions and customs subjugated to the same central power, say Mesopotamia, Egypt, the Roman empire, the Chinese empire, the (short-lived) Mongolian empires and so on. The nation state is a much more recent experience, and mostly of European origin, and refers to states where the people living in it are more or less homogeneous with same or similar language, religion, culture etc. They may not have had that originally, but a strong centralised state succeeded in forcing upon most of the people a common language, religion, culture etc. So when new territory was conquered, forced assimilation often followed.

Unless there was some external or internal crisis, people would historically stay where they were. Assaulting tribes from neighbouring territory, or the perspective of easy spoils assaulting the neighbours, could make people move. Climatic events or overpopulation could be internal factors that forced people on the move. But from the moment the nomadic tribes had become sedentary farmers, they would normally stay where they were, if not for natural disasters or wars. Few of them would travel to other places, unless they were merchants. Fortunately there were some exceptions as e.g. the Greek historian and traveller, Herodot, a contemporary of Socrates, who travelled around most of the Middle East, and who's writings still are facinating to read. Or the 13th century Venetian merchant traveller Marco Polo, telling vivid, if not always truthful, stories about his travels along the silk road to China.

In medieval Europe, the majority of the population consisted of farmers or farmworkers and they stayed within their country or even within their parish. In many cases they were not even allowed to move, as they were linked to the land by serfdom. The travellers were mainly aristocrats, merchants, a tiny group of academicians and artists, and some young skilled workers – the latter would normally return home after some years on the road (“wandergesellen”), but in some cases they would stay on in another country. Sailors were probably at that time the most mobile people.

Lack of opportunities at home and/or hope of quick returns from pillage, made millions of people move during the last five hundred years. With the colonisation of particularly the Americas and Australia, millions of poor people from Europe moved to live in the British colonies of North America and Australia, or to the Spanish and Portuguese colonies in Central and South America. Africa was less of an attraction, except for the Southern Africa and Algeria. So poverty and the lack of opportunities at home has been a strong motivation for migration for a very long time. All European countries have been strong emitters of migrants: Ireland, Italy, England, Denmark, Sweden, Spain, Portugal, Eastern Europe – the list is long.

The industrial revolution induced a massive migration from the countryside to the cities. Most of this took place within the nation states, but much of the migration to the Americas was also induced by the rapid growth of the industry there and the need for labour. At the same time it created strong internal migration between the regions within the nation states, e.g. from Sicily and Southern Italy to Northern Italy in the 1950s and 1960s, or the massive displacement of people from Western and Central China to the rapidly growing coastal cities during the last couple of decades.

It is easy to laud this as a good development. People move from low-productivity jobs in their home land or region, to higher productivity job elsewhere. Sounds as a win-win, which many insist it is. But it is forgotten that migration often implies very high personal costs for the people who migrate. The large majority of migrants don't move because they want to know new places, they move because they can't see alternatives, and they are often passing hard times in their new country. They often survive creating subcultures of mutual support based on family networks in their new place, and they often do their best not to integrate into their host country, marrying within their group, struggling to maintain their language, culture and religion. If they can’t find a spouse within their own group, they will often prefer to bring in a spouse from their homeland. The dream of the first generation is often to gather enough money to be able to go back and establish themselves again “at home”. Many of the Latin American migrants in the US have left the family behind, often children left with their grandparents. As they are often illegal, they can't go home before some amnesty legalises their residence. The drama of the children left behind is real and very tough, and is also common among Eastern Europeans working in Western Europe, as well as for migrants coming from outside Europe. And many first generation migrants who have succeeded in gathering enough money to “go home” suddenly find that their children don't want to “go home” with them. “Home” is for them their new country or region. In China the problem is even worse, as migrant workers often will not be able to get a residence permit where they work. So they are in practice treated as the illegal immigrants are treated in the US or in Europe – or worse. Fortunately, a reform of this discriminating Hukou system is now underway, and there has since year 2000 been an official strategy to move the economic development to the Western regions (the “Go-West” strategy) instead of relying on migrant workers.

Since neoliberalism became the dominant political current after the collapse of the Soviet Union in 1990, development has been defined almost universally as letting the markets free, getting prices right, creating an enabling environment for private business, opening up for free trade and keeping the government from meddling with the productive sector. In many developing countries this meant abandoning a model promoting industrialisation through import substitution and export promotion. This policy shift made millions redundant in the developing countries as factories that were not competitive were downsized or closed. Migration was in this period the main safety valve, which served to avoid social unrest and political turmoil. Millions of people simply left their country to work in more developed countries, and the money they send home – called remittances - has functioned as a safety net for the families they left behind. The remittances are presently in many developing countries the single most important source of foreign exchange. For example, according to the World Bank the remittances constitute 30% of GDP in Nepal, 18% in Honduras and El Salvador, 14% in Senegal, 11% in Guatemala and Bosnia. The list is long. The local economy has been rearranged around imports, often monopolized by the dominant families – a sort of “trickle-up” economy as the remittances trickle up from the poor to the well-off.

But is this a model for development? There are an incredible number of studies of the impact of remittances, as this is presently one of the most financial flows towards the developing countries. Most studies claim that the remittances have a positive macro-economic effect and also contribute to poverty alleviation, everything else being equal. That sounds probable. But development? Hardly. Apart from the hardship and the suffering for the families that are being uprooted and split up, the emitting countries tend to become dependent on easy money flowing in, boosting consumption and investment in commercial infrastructure, in many cases resulting in an overvalued currency and lack of competitiveness – many of the same ailings that natural resource dependent economies tend to suffer. Furthermore, the best brains tend to leave - the socalled “brain-drain” - paradoxically now often used as a positive argument for migration in the receiving countries.

The large scale migration we have seen in the last three decades has one more important drawback. While the population in the receiving countries may start out being quite positive to the newcomers, when the migration reaches a certain threshold level, the population tends to react negatively, even in countries as the US, where a large proportion of the population are descendants of migrants and historically has a positive attitude towards migration. This nurtures a lot of ugly reactions: racism, xenophobia, anti-islamism and so on, often based on rumours and disinformation. And because of the massive migrant flows, travelling has generally become more and more difficult and humiliating for people from developing countries, even when they have no intention to migrate. The world has unfortunately become a meaner place.


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Thorbjorn Waagstein

Thorbjørn Waagstein, Economist, PhD, since 1999 working as international Development Consultant in Latin America, Africa and Asia.

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  • Thorbjorn Thorbjorn Says: Friday, 15 September 2017 18:49

    I agree, it is a sweeping statement, and was mostly referring to the experience in Latin America, not least Central America. Asia is another story. To my knowledge no bigger Asian country has embraced neoliberalism, but has rather continued with a mixture of import substitution, export promotion and a competitive (low) exchange rate. Most Asian countries are looking to China for inspiration, not to the IMF, while China itself looked to Japan and Korea for inspiration. What exactly the "Chinese model" is, is debated. Is it just a strong authoritarian central government and low wages, as some think to believe, or is it "dirigiste" capitalism (which I would think)? Africa has some similarities to Latin America, but the push for home-grown industrialisation was much more incipient (and inefficient), so what was destroyed by the shift to neoliberalism was much less significant. However, in the case of South Africa it was quite significant. After the end of Apartheid, a decision had to be taken on whether to continue the rather closed, homegrown economic model, forced upon the country by the international sanctions during apartheid, or switch to the prevailing neoliberal paradigm. As it is well-known, they opted for the latter. The results are not flattering. Whether they could have managed a more gradual opening, nurturing more their home-grown industries is of course debatable. But the result could hardly be worse. Ethiopia is presently flirting with a sort of "Chinese model" with a combination of export promotion (competing with Bangladesh for garment production), massive infrastructure investments (with support from China) and import substitution.

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  • Eric Buhl-Nielsen Eric Buhl-Nielsen Says: Thursday, 07 September 2017 08:11

    Very interesting article and I agree it is a great pity that people cannot move where they want - one point I wondered about is whether it is correct that "This policy shift made millions redundant in the developing countries as factories that were not competitive were downsized or closed" - at least in most of Africa it might be difficult to find examples and in Asia it might be the reverse in that electronics and clothing manufacture etc was shifted to the lower wage economies.

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