Impact of the Financial Crisis on Migration: IOM Report
There are good reasons to suppose that the current financial crisis
will have a more significant impact on migrants and migration than
previous crises. However, time is needed to allow for a more
accurate analysis of the situation so that knee-jerk migration
policies are avoided, says a new IOM report.
In the latest of its Migration Research Series, The Impact of
Financial Crises on International Migration: Lessons Learned, the
report draws upon five previous financial crises in the 20th
century - the Great Depression of the 1930s, the Oil Crisis of
1973, the Asian crisis of 1997-1999, the crisis in Russia at end of
1998 and the Latin American crisis of 1998-2002.
The report argues that the impact of the current crisis on human
movement will matter more today than ever before because, while
previous crises had global ramifications, their impacts were felt
mostly at the regional level. Migrants would shift to alternative
destinations as one region would benefit economically at the
expense of another. Today, however, the current crisis takes place
in a world that is more interconnected than ever before, and no
region is unaffected.
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target="_blank" title="">The Impact of Financial Crises on
International Migration: Lessons Learned
Another difference is that while the crises of the 1990s came at
the end of a decade of substantial economic growth and poverty
reduction in affected regions, the current crisis compounded the
effects of rising food prices and unstable commodity exports for
developing countries.
Migration policy, it stresses, is also being devised in a very
different context than before. The global economy is more dependent
on migrant labour than ever before, especially in certain sectors.
Similarly, there is a greater dependence on remittances, both on
the part of individuals and national economies.
Acknowledging a systematic lack of evidence on migration in the
financial crisis, the report nevertheless states that some impacts
of the current crisis are apparent, such as a reported reduction in
migration flows and a slow down in the rate of remittances, albeit
with important variations.
It argues that the evolution of the current crisis, however,
makes it difficult to gauge a true picture unlike, say the 1973 Oil
Crisis, which was an overnight shock to the economic system with
enormous consequences for global migration patterns.
It led to the end of "guest-worker" migration in Europe due to
rising unemployment and recession, the start of family
reunification and permanent settlement rather than large-scale
returns, the shift of production processes by large corporations
from developed countries to developing countries in Asia and Latin
America as they exported capital, and the introduction of
guest-workers in the Middle East as governments used much higher
oil revenues to build infrastructure, housing and economic
expansion.
The report also argues that severe restrictions on labour
migration triggered by the Oil Crisis, which continued in the
following decades, was believed by many analysts to be behind the
growth in bogus asylum claims in developed countries, and later in
the growth of irregular migration.
Other consequences of previous crises highlighted in the
report and which are echoed to varying degrees today, include
an impact on internal migration following the Asian crisis as the
contraction in jobs in cities such as Bangkok led to a return to
rural areas; a recognition among some Asian destination
countries of the economic importance of migrants doing jobs that
nationals didn't want to do; the brain drain that resulted from
both the Russian and Latin American crises, and the short-term
decline in the growth of remittances.
From many of the previous crises, it has been clear that returns
and deportations have not been as large as predicted and that
migrant stocks largely remain intact. Where possible, migrants stay
on and work in the informal sector. For example, employment in
Indonesia's informal sector increased by six million in the years
after the Asian crisis.
However, where returns have been substantial to individual
countries, the report highlights the importance of ensuring that
policies and planning are in place to absorb returning migrants
back into the economy and society.
What all previous crises have shown is that even if migrants do
manage to keep jobs, their working conditions suffer through lower
wages, reduced benefits and longer working hours.
With many destination countries reacting to financial crises by
"re-nationalizing" jobs while countries of origin respond by
internationalizing their workforce as a way to counteract increases
in unemployment, the report stresses the need to ensure migrants'
rights are protected.
Ultimately, the report argues, migration is resilient in the
face of financial crises. Even after the more severe events such as
the Great Depression and the Oil Crisis, migration rebounded. It is
the length and severity of the current crisis that will define its
true impact on migration, the report finds. But the integral role
that migrant labour plays in the global economy suggests that it
will be hard for the global economy to recover without migrant
labour. This, it says, is another reason why it is important not to
ignore migration in the financial crisis response equation.
Governments, the report argues, should nevertheless resist
succumbing to both political and popular pressure to respond to
crises through migration policies that reduce competition with
native workers or to make policy decisions that are not based on
sound economic evidence in the labour market. Impacts are complex
and unpredictable and it can take time for a clear picture of
labour markets to emerge. Consequently short-term and restrictive
policies can be counter-productive.
Migration Research Series N°37 - Responding to the Impact of
the Global Financial Crises on International Migration: Lessons
Learned is available at
href=
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For more information, please contact:
Chris Lom
Tel: + 41 22 717 9361
E-mail:
"mailto:clom@iom.int">clom@iom.int