Keep the doors open!

Lana Oh, intern at UNDP in Brussels, EC-UN Joint Migration for Development Initiative

Migrants as agents for development through the global economic crisis

The global economic crisis may possibly have a dramatic impact on the lives of migrant workers and developing countries. There are several aspects of the economic downturn that are likely to impact migration and development. First, the crisis is deep and synchronised around the world. There is a marked contraction in advanced and emerging economies, and migrant workers are usually the first to lose their jobs in times of economic downturn. For migrants already residing abroad and for newcomers, it will be more difficult to secure employment, even on a casual basis.

A direct result of migrants’ increasingly precarious situation is the expected decline in remittance flows (i.e. the money that migrant workers send back to their families in their countries of origin). The World Bank recently lowered their remittances forecast for 2009 “to $290 billion in 2009, from last year's high of $305 billion.” Remittances are critical to varying degrees in different developing countries. For example, World Bank data indicates that remittances contribute around 45% of GDP in Tajikistan, 38% in Moldova, 11.6% in the Philippines and 9% for Morocco and Senegal. They are also an important source of income for families in the developing world and especially vital in their ability to enable consumption during times of economic crisis. The decline in remittances is likely to be felt in three areas: asset building (e.g. acquiring a home, a business, an education, or savings for retirement), poverty reduction and the multiplier effect (an economic effect whereby spending and consumption produces income and money flow through the local community) of local purchases by recipients. Reduced remittances from migrants to their home communities induce more risk and possibility of hardship in communities dependent on such income sources.

Secondly, demand for exports, foreign direct investment (FDI) and overseas development aid (ODA) are expected to decrease, or at least come under pressure. According to the Overseas Development Institute, many developing countries' economies are still growing but forecasts have been lowered recently. For countries that are heavily dependent on FDI and aid, there is the potential for a reverse of growth that occurred over the last decades.

From a rights-based perspective, there is concern that migrants residing abroad may face increased hostility with the potential to lead to conflicts. Migrants abroad may face fewer employment opportunities and may encounter greater discrimination and stigmatization. Additionally, as countries tighten their regulations and as anti-immigration sentiment and xenophobia rise, more migrants may be forced to shift to the grey economy. As a result, this will lead to more undocumented migrants, unsafe migration and an increased possibility that migrants would find themselves in situations that either put them at risk or make them more vulnerable.

The global economic crisis presents risks and challenges but it also presents the opportunity for a number of mitigation actions to be taken by host and origin societies and governments. In countries of origin, approaches to alleviate economic hardship as a result of the crisis can focus on financial literacy. For example, The Inter-American Dialogue in Washington, D.C. implemented a financial literacy project using USD$80,000 to reach 25,000 people, convincing 5000 people to mobilize USD$1000 deposits into microfinance institutions. The crisis may be an opportunity for migrants to re-examine their remittances and ensure that recipients use them wisely. For host societies, communities and civic groups can challenge the stigmatization of migrant workers. If migrant return programmes are implemented by governments, these should ensure that migrants are given proper and adequate assistance to return to their countries of origin and that migrants are treated with dignity throughout the process. In developing countries, where the impacts of the crisis are felt the hardest, governments and NGOs should aim to provide migrants with adequate social protection and provide unemployed migrants with access to services and skills training to improve their chances of finding employment. Ultimately, the impact of the crisis on migrants will likely depend on how severely it affects the sectors in which migrants work and how long it lasts. Governments can play an important role in minimising the effects of the crisis by not shutting their doors to migrants and refraining from initiating migrant return programmes. Such measures risk making the crisis even worse, depleting economies of productive workers. ■


To learn more about migration, development and remittances see:
· The EC-UN Joint Migration for Development Initiative. www.migration4development.org
· UNDP. “The Potential Role of Remittances in Achieving the Millennium Development Goals – An Exploration.”
· United Nations Development Program site on Migration and Development.
· The World Bank site on Migration & Remittances.

Images: Top, UN Photo/Tim McKulka, Middle: UN Photos/Martine Perret, Bottom: UN Photo/Diez