Migration and Current Economic Crisis

1. Migration and Current Economic Crisis Summer School on Migration Studies Jindřichův Hradec Tomáš Konečný, CERGE-EI 1st September, 2009

2. Outline • Focus of presentation • Background of current crisis • Host countries • Impact on local labour markets • Host country reactions to address migration issues • Source countries • Labour markets in source countries • Impact on remittances and households located in country of origin • Conclusion

3. World Economy in Trouble • Major host countries in problems in 2009 • United States output (GDP) expected to decline by 1.6 per cent the EU by 2 per cent • Middle East growth expected less than 4 per cent after growing over>6 per cent • Asia, Singapore’s economy contracting by 2 to 5 per cent, Malaysia to 3.7 per cent (6.3 per cent in 2007), and Thailand to 3.6 per cent (close to 5 per cent in 2008) • Many source countries have been hit worse

4. Labour MigrationPosition of Migrants in Host Countries • Migrants overrepresented in low-skilled jobs • residential construction, light manufacturing, and financial and travel-related services • care activities dominantly performed by women • Often not eligible for welfare and social benefits • Attitudes and stigmatization of migrants, political situation

5. Labour MigrationPosition of Migrants in Host Countries • migrant workers more affected by the deterioration of labour market conditions • unemployment levels among immigrants notably higher as compared to natives

6. Host Countries and Crisis • The unemployment rate among immigrants in Spain was 27.1% in the first quarter of 2009, compared to 15.2% for natives • Australia a decline in temporary skilled migration >25% in the first four months of 2009 • The UK and Ireland migration from the new EU member countries declined by >half • Middle East – public investments should make up for decline in private sector

7. Host Countries Government Measures on Migration • West and the Middle East countries stopped or imposed restrictions on new admissions • Stricter points-based systems (UK) • No non-seasonal workers admitted in 2009, 70,000 officially admitted in 2008 (Italy) • Sending laid-off migrant workers home • the air-fare and €500 ($704) to workers who have been laid off (Czech Republic) • Speed up the deportation of irregular migrants (Malaysia) • Tightening of border controls (US)

8. Host Countries – Government Measures – the case of Spain • 15,731 foreign recruits under “contingente” scheme in 2008, 901 in 2009 • Lump-sum payments by Spanish government to present immigrants • about 300,000 unemployed foreigners at program launch in November 2008 • <200 a week applied for the return bonus • 68,700 Romanians not eligible as EU residents • Moroccans, the number two group at 67,300 eligible • migrants from Ecuador and other Latin American countries considering • economic troubles at home, many sold their land and other assets to move to Spain

9. Host Countries – Government Measures – the case of Thailand • From January 2009 Thailand would not re-register migrants in 2009 • Reduce-migrant-employment-to-open-jobs-for-Thais did not work in 1998 in case of rice mills sector • Substituting Thais for migrants unlikely to open jobs for Thais in 2009 • E.g., fewer than 120 Thais responding to ads for 150,000 fishery-related workers in Samut Sakhon province in 2008

10. Source (Sending) countries • Massive return of migrant workers did not realize • Concerns regarding remittances • remittance flows to developing countries nearly $300 billion in 2009 • significantly more than all forms of capital flows put together • for many countries (incl. India and China) remittances important for domestic consumption and investment

11. Source Countries - Remittances • In many countries remittances a large share of GDP • E.g., Tajikistan, Lesotho, Guyana, Moldova, Honduras more than 25 per cent of GDP • Serious implications for households and governments • Mexico’s federal government and sales tax • Nepal the crisis expected to cause up to a 30 percent decline • Latin America may drop by 11% in 2009 over 2008 values • The problem is sometimes less severe than seems • Migrants more reluctant to send money through official channels • Sharp fluctuations in exchange rates

12. In Some Cases Remittances Might Still Grow • Female migrants more likely to send remittances home • Females also typically send a greater proportion of their earnings back • Male migrant workers much more linked to the business cycle • Care activities usually affected by demographic tendencies, institutional arrangements, or women’s work outside the home • South Asia (incl. India) expected to receive more income this year than last from migrants in the Gulf region

13. The Crisis and Forced Migration • Expected decline of development assistance • Harder to identify as bona fide refugees • Crisis potential source of local conflicts and rise of forced migration

14. Conclusion for 2009 • Despite many host and source countries in decline • and active measures to restrict immigration, • massive return of migrant workers did not realize • Significant drop in remittances • Might threaten stability in some countries • But in other might be partly overstated

15. Contacts & Background reading Email: tomas.konecny@cerge-ei.cz Webpage: http://home.cerge-ei.cz/tkonecny Readings: • Migration and the Global Financial Crisis: A Virtual Symposium, available at www.age-of-migration.com/uk/financialcrisis/updates/1a.pdf, a webpage with a number of recently submitted opinions and evaluations on a crisis-migration link by several leading experts in the field. • Sward J., Migration and the Financial Crisis: How will the Economic Downturn Affect Migrants?, Development Research Centre Briefings, available at http://www.migrationdrc.org/publications/briefing_papers/BP17.pdf, February 2009 • Thalif Deen, MIGRATION: Financial Crisis Eroding Remittance Lifeline, available at http://ipsnews.net/news.asp?idnews=46545 – a short article on remittances and a current situation • Papademetriou D.G., and A. Terrazas, Immigrants and the Current Economic Crisis – Research Evidence, Policy Challenges, and Implications, Migration Policy Institute, available at http://www.migrationpolicy.org/pubs/lmi_recessionJan09.pdf . This paper focuses mostly on the U.S. experience.