Migrants & Money on the move despite Financial Crisis

If I had to use just one word to describe the Chinese immigrants I encountered in Europe the last year, it would be: resilience.

Despite rising unemployment and anti-immigration rhetoric in many countries, the Chinese have continued to migrate to places they are not always welcome. And, they have thrived.

Removing restrictions on human mobility can actually help both emigrant-sending and emigrant-receiving economies by enhancing financial flows among nations.

A new book published by the World Bank has found that the the global financial crisis of 2008/09 did not sent migrant workers running back to their home countries (even when places like Spain were paying migrants to return home and stay there for at least three years).

In fact, migrants may have mitigated some of the pain of the crisis, according to Migration and Remittances during the Global Financial Crisis and Beyond. They tend to work for lower wages, receive fewer benefits and rely relatively little on the state, contrary to the popular belief that immigrants are a strain on the welfare state. They have also consistently sent money home.

“During the crisis, remittances continued to provide a steady source of foreign currency to developing country economies at a time when foreign aid remained flat and foreign direct investment declined sharply,” said Otaviano Canuto, Vice President, Poverty Reduction and Economic Management, at the World Bank.

Remittances did suffer a modest decline in 2009 (5.2 percent), but this is in sharp contrast with the precipitous declines seen in global private capital flows, the book argues.

“The resilience of remittances is good news for developing countries as they remain one of the less volatile sources of foreign exchange earnings, particularly for the less developed countries. At the household level, these cash transfers are, in many cases, the only lifeline for families in the home countries,” said Hans Timmer, Director of Development Prospects at the World Bank.

What’s really interesting to note is Spain (where unemployment is highest in the Euro Zone) has been the fastest-growing immigration destination for the past decade and is now the fifth largest remittance-sending country, after the United States, Saudi Arabia, Russia and Switzerland. Read my story in Bloomberg Businessweek about the continued flow of Chinese immigrants into Spain and the success of Chinese enterprise in the wholesale industry.

As the global economic crisis continues, more and more governments are adopting an archaic stance on migration — that it should be strongly discouraged or even stopped. Foreigners are feared and accused of stealing local jobs and draining precious resources from states already in inconceivable debt. But the book’s authors argue that removing restrictions on human mobility can actually help both emigrant-sending and emigrant-receiving economies by enhancing financial flows among nations.

Some more really cool facts about migration:

– There are more than 214 million international migrants worldwide

One of every 33 persons in the world today is a migrant

– If all the migrants gathered together, they would form the fifth most populous country in the world

49% of international migrants are women

– Migrant workers are projected to remit about $399 billion to their home countries in 2012, compared to $372 billion in 2011.

Learn more here.

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