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1.6 International migration and remittances: Economic Report on Africa 2007

Guest post by: United Nations Economic Commission for Africa

Article Overview: Migration reduces human capital and labour productivity in developing countries

1.6 International migration and remittances: Economic Report on Africa 2007

As population in advanced countries continue to age, shortage of labour in sectors
such as health care continue to attract relatively cheap but qualified labour
from developing countries. At the same time, push factors such as poverty, conflict,
human rights violations, political instability, lack of employment opportunities and
reductions in migration costs continue to induce more migration from the South.
The United Nations predicts that the net number of migrants from developing to
developed countries will increase by 2.2 million annually, from 191 million or 3 per
cent of the world population in 2005 (United Nations 2004).

The discrimination by Organisation for Economic Co-operation and Development
(OECD) countries in favour of educated workers contributes to brain drain from
developing countries, which subsequently increases the shortage of skilled labour in
these countries. The emigration of people with scarce skills, such as entrepreneurs,
scientists, technicians and health professionals reduces both the stock of human
capital and the overall labour productivity. However, if these highly skilled migrants
return, they bring with them experience, knowledge, contacts, and capital, which have a positive impact on development. Thus, gains and losses from migration
depend on whether it is temporary or permanent. There is also growing evidence
that remittances reduce poverty (UNECA 2006a; UNU-WIDER 2006; Niimi and
Özden 2006).

Specific measures are needed to increase the
development impact of remittances

At the High-Level Dialogue on International Migration and Development in New
York in September 2006, it was reaffirmed that international migration could be a
positive force for development provided that it is supported by the right set of policies
(United Nations General Assembly 2006, para.7). The development potential
of remittances could be increased by facilitating the transfer of funds and improving
access to banking services for migrants (United Nations General Assembly 2006,
para 12). Although most of the remittances originate from industrial countries (83
per cent), a significant share of remittances is also transferred among developing
countries. Remittances worldwide more than doubled between 2000 and 2006, with
the highest increases observed in East Asia and Latin America (165 per cent each),
while sub-Saharan Africa (SSA) experienced a much lower increase – 40 per cent
(figure 1.10) (World Bank 2006c).

To increase the contribution of migrants to development of their countries of origin,
several countries have taken measures to strengthen their ties with their nationals
abroad and to encourage highly skilled workers in the direction of return and
circular migration. Migrant entrepreneurs could transfer know-how, skills, technology,
expertise and linkages to markets (United Nations General Assembly 2006,
para.13). To minimize the negative consequences of highly skilled emigration from
developing countries, particularly in the fields of health and education, codes of
conduct governing recruitment in health and education as well as mechanisms for
compensation need to be discussed between the advanced and developing countries
(United Nations General Assembly 2006, para.14). These codes will need to be
accompanied by appropriate enforcement mechanisms to ensure their effectiveness.

Related Articles
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  The economic implications of global remittances for SMEs
  References: What Drives China’s Growing Role in Africa?
  V. D. The Future of China-Africa Economic Relations: FACTORS INFLUENCING THE GROWING TIES

Article Tags: development, Development OECD countries, health care, highly skilled migrants, human rights violations, international migration, United Nations, United Nations General Assembly, world population



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