Albania: Migration and Development. Exiting from vulnerability in Global Migration System

1. Albania: Migration and Development.Exiting from vulnerability in Global Migration System Prof. Kosta Barjaba, PhD, MPA Ministry of Labor, Social Affairs and Equal Opportunities of Albania

2. I. 12 top symptoms of Albanian migration in the global context

3. 1.1. The number of emigrants is reaching record levels: Albania the highest migration flow European country • 1 million emigrants out of a population of 3.4 million; • 22-25% of the population; • 35% of active population; • 50% in Greece; • 25% in Italy; • 25% in the rest of EU countries (UK, Germany, Switzerland), US and Canada. • The average migration flow in developing countrues approximately 5-6% of the active population. • Albanian immigration flow 5-6 times greater than the average flow of developing countries.

4. 1.2. The skills and economic performance of Albanian immigrants is declining • The limited capacities of receiving country’s labor market due to structural reforms to meet the EU standards; • The labor market standards are more demanding; • Ageing factor: the first generation of emigrants is reaching the pension age; • The second generation is still in school or in the periphery of labor market;

5. 1.3. Immigrants’ earning continue to be lower than natives • The worsening of economic performance; • The gap between immigrants and natives is narrowing slowly: historical experience shows that the immigrants-natives gap narrows only 10% in the first two decades of migration. In 15 years of Albanian migration the gap is narrowed only 7.5%;

6. 1.4. Ethnic origin does matter • Albanian immigrants: the majority of immigrant community in Greece and the second in Italy; • The so-called phenomena of victimization, incrimination and demonization of Albanian immigrants; • The public perception of Albanian immigrants: mostly created by press and media; • They expected to be closer, but they feel the distance: the cultural neighborhood sometimes doesn’t matter. • Ethnic ghettos slow the integration of immigrants in the host societies, but this affects only slightly the Albanian immigrants, as they do not intend to concentrate in ethnic ghettos.

7. 1.5. Albanian immigrants harm the economic and employment opportunities of least skilled natives • Most of immigrants have a poor level of skill and education; • Higher skilled and qualified immigrants are installed into least skilled jobs and employment sectors;

8. 1.6. Albanian immigrants have a severe fiscal impact on the receiving countries economy and welfare system • The least skilled the immigrants, the more heavy the fiscal burden and fiscal effect; • The surveys show that for the first 15 years of migration experience immigrants consist of a burden on welfare system; • The main receiving countries, Greece and Italy, are reforming their welfare system and the immigrants burden causes serious implications;

9. 1.7. Net economic gains from immigration in European receiving countries are significant • As Albanians enter the labor market in Greece and Italy, the wage of native workers falls. Workers lose because immigrants drug wages down; • But the native-owned firms gains, as they are able to hire workers at lower wages. Employers gain because immigrants drug wages down; • Native consumers gain because the lower labor market costs lead to cheaper goods and services offered to population;

10. 1.7. Net economic gains from immigration in European receiving countries are significant • Immigration induces a substantial redistribution of wealth, away from workers who compete with immigrants, and toward employers and other users of immigrants’ services. In this perspective, immigration can be viewed as an income redistribution program, a transfer of wealth from those who compete with immigrants toward those who use immigrant labor, products and services; • Immigration may benefit or harm the receiving countries even through externalities: products and services born by immigrants: cuisine, cultural products etc. But in this perspective the impact of Albanian immigrants is insignificant, as Albanian cuisine and other products and services are not expanding in receiving countries; • In the US the immigration net gain is less than 0.1% of GDP.

11. 1.8. Illegality versus legality: Migration of Albanians started as illegal and is transformed into a legal migration • Albania was unprepared to manage the flow; • The neighbor receiving countries were unprepared to manage the flow; • Agreement with Greece in 1996;Agreement with Italy in 1997; • Domination of legal versus illegal immigrants started in 1998; • During 1998-2005 around 70 0000 Albanian illegal immigrants per year were legalized in both countries, Greece and Italy; • During 2003-2006 the rate legal-illegal was 1.5-1 in Greece and 3-1 in Italy;

12. 1.9. Active versus passive immigrants: passive immigrants’ anormal rate • High level of family migration, conditioned and favored by cultural, linguistic and geographic vicinity, as well as by the low cost of migrating in neighbor countries; • High level of migration of minors, accompanied and non accompanied; • High level of females’ migration, conditioned and favored by the easiness of entering the labor market, especially in domestic activities: no “white widows” as in the case of migration form other countries, but sometimes “white widowers”; • High level of unemployment among immigrants;

13. 1.10. High level of brain drain: brain gain versus brain loss or brain waste • High level of migration of qualified people; • Most of qualified people installed in the labor market sectors other from those which fit to their profession and qualification; • Brain drain recognized symbolically as the “Canada phenomena”. Because of the Canada migratory policies favoring migration of qualified people; • Severe consequences in the domestic labor market, economic, social and political life;

14. 1.11. Long term versus short term migration: Migration is passing from a contemporary seasonal migration into a long term permanent one, making use of: • opportunities offered by migratory policies in the receiving countries; • geographic vicinity which favors periodical return returns in the country; • the synergy between economic and professional activities in the receiving country and in Albania;

15. 1.12. Migration as survival and consumption source versus migration as a factor of development • For the first 15 years, migration has served as a source of economic survival and consumption; • Only recently there are efforts and actions to use migration as a factor of economic, social, cultural and political development; • Country Strategy of Migration Management (2005); • Attention to voluntary and incentive return of the successful immigrants; • Attention to migration remittances;

16. II. Government of Albania’s migration policies and challenges2.1. Discouraging migration flow through : • Stabilisation of economy; • Sustainable development; • Creating new jobs ; • Incentives to return migration ; • Favoring the use of remittances in country’s economy ;

17. 2.2. Extending and broadening the channels of legal migration to qualified people, through: • Implementing bilateral agreements; • Promoting decentralized cross-border cooperation and migration; • Prioritizing the vocational and educational training to fit to foreign labor market standards; • Combating human beings trafficking and smuggling;

18. 2.3. Supporting the installment in the labor market and integration of Albanian immigrants, through: • Negotiating with receiving countries’ governments; • Providing information, assistance and counseling to immigrants; • Endorsing the international labor migration conventions; • Promoting access to schooling and services to the second generation of immigrants; • A critical pending issue: Reciprocal recognition and transfer of the social insurance fees and payments. Negotiations in progress with Italy, Greece, Canada, and other countries;

19. 2.4. Promoting the voluntary and incentived return migration of successful immigrants, through: • Legal incentives; • Banking incentives; • Fiscal incentives; • Financial incentives; • “Albania 1 EURO” Initiative: Albanian immigrants and Diaspora as beneficiaries;

20. 2.5. The better use of financial, human and social capital of migration as a factor of development • Financial capital or remittances: from USD 152 million in 1992 to USD 1 billion in 2006; • Human capital: the most active, dynamic, qualified, and youngest population; • Social capital: values gained through migration experience: professional, cultural, organizational, managerial, discipline and work culture; • Remittances: 15-20% of GDP • Remittances finance about 60% of country’s trade deficit; • Remittances: competing with foreign direct investments in the country;

21. 2.6. The synergy and correlation between migration, trade, and investment policies • Migration remittances as a source of investment; • Immigrants: target of economic and trade agreements

22. 2.7. Challenges for bilateral cooperation in the field of migration • Demilitarization of migration policies. Migration dichotomy: an economic and social phenomena and not a public safety, public order and police issue; • Immigrants versus refugees and asylum-seekers: shifting in priorities toward economic and labor immigrants; • Migration policies towards business oriented policies.

23. III. Remittances: a top priority and challenge

24. 3.1. Promoting the participation of financial institutions in Albania and receiving countries in the transfer of remitances, through: • Cooperation with receiving countries for the use of formal channels of transfer of remittances; • Promoting immigrants’ access to financing SME and traditional economic activities;

25. 3.1. (Continues): • Strengthening financial and MTO and institutions; • Promoting the role of the Post Offices in financial services; • Transfers of remittances may generate bank loans for financing economic activities or other financial products;

26. 3.2. Increasing the financial products for immigrants and diversifying remittances generated investments • Immigrants’ demand for financial products is increasing; • Immigrants savings in 2004: USD 5 billion or 70% of Albania’s GDP; • Remittances can be used for financing: • housing, • small infrastructure projects • privatization of public strategic assets; • job creation;

27. 3.3. Orienting and directing remittances for productive investment purposes • During the first 15 years of migration: remittances uased for consumption purposes; • It led to increase of country’s trade deficit: in 2004 it reached 25% of GDP; • Collaboration and synergy with the privat sector to attract immigrants’ savings from the banks in receivinmg countries;

28. 3.4. Increasing the access of Albanian immigrants to bank and financial services in receiving countries • Promoting banks’ cooperation • Public (immigrants) awareness compaigns; • Banks and MTOs: building trust

29. 3.5. Coordination with receiving countries governments to channel the aid to Albania through incentiving succesful returned immigrants • Developing new programmes; • Revisiting the existing agreeements, programmes, and projects;

30. 3.6. Albanian banks to open new branhes in receiving countries • Actually, onlu ABA has opend 2 branches in Greece (Athens and Thessaloniki) • Albanian banks will enable providing more services to immigrants in receiving countries and in Albania: • Online banking services; • Saving and investment products; • Business loans; • Prepaid cards; • Dedit cards; • Counseling and assistance;

31. 3.7. Support to micro-finance institutions wich enter and operate in the remittances market and management • Political support; • Legal support; • Institutional support;

32. . • THANK YOU