Saturday, June 9, 2007

If they don’t go back, someone else can pay!

One of the difficulties when discussing or legislating about immigration issues is that no matter how obvious it is that a border has two sides, everyone insists in resolving everything on just one. For instance since for the nation receiving a temporary migrant worker he is mostly a stranger, it must be more challenging for it to make sure that he will return once his authorized stay has expired, than for the sending country, for which that emigrant worker is just another neighbor.

In this respect I am currently working on the design of a program whereby reputable and private insurance companies in Central America (some with foreign owners) will offer to guarantee to the US government to pay a quite significant indemnity (minimum 100.000 US dollars) for each worker that covered by a specific temporary worker-program return insurance does not return home, in a timely manner.

Are we talking about an enforcement program that could have some objectionable human rights issues? Absolutely not! Since the premiums for the insurance will be paid by the migrants themselves, and the program contemplates giving them important discounts based on the collective behavior of the group, it is primarily about creating the right incentive structure, and knowing your client.

In this particular case, on both borders, an additional difficulty is that so many have got it fixed in their brains that a migrant worker is by definition a worker who wants to stay, no matter what, and this is absolutely false. The best antidote for any illegal immigration that I can think of is a true temporary program where everyone understands what it is all about, fully accept the underlying premises, and decide to do the best they can to benefit from the valuable window of opportunity that is being offered to them. In short, extremely good temporary migrant worker programs could be developed if people and lawmakers would just dare to reach out.

Monday, April 30, 2007

A temporary or a step-motherland?

The Inter-American Development Bank (IADB) estimated recently that the remittances by the working migrants to Latin-American were 62.3 billion US dollars in 2006. If that amount represents between 20% and 15% of the income of the migrant workers then we could speak of a gross migrant product (GMP) of 310 to 415 billion dollars, a really impressive amount.

For El Salvador, what their migrants earn would represent a GMP between 90% and 120% of El Salvador’s regular GDP, and given that a Salvadorian should be no less Salvadorian just because he works abroad we could in fact say that in real aggregate terms the economy of El Salvador is twice what is currently reported. (Should this not count for calculating their economic quota of voice in international organizations?).

Given such figures it is quite natural that multilateral agencies such as the IADB and the World Bank give much attention to the issue of migration and remittances but, in this respect, on three aspects, I am not at all in agreement with what these entities do or say.

First. The remittance that an emigrant son sends his mother is no different that the help the son who remained at home could give her. I say this because although this is often fleetingly acknowledged one always receives the impression in statements and papers that these funds constitute an opportunity for “benign” interventions. If they wish to help both sons and their mother to make a better use of their income, they are much welcomed to do so but if what they have in mind is to especially single out the remittances of those that work abroad, the effect of that could turn out to be very counter productive.

Second. Fortunes have been spent on analyzing and looking to reduce the costs of the remittances which, though not something bad, constitute a total irrelevance when placed into the context of a GMP. Instead of so much navel gazing on these costs and that should solve themselves naturally by just more competition, much more important is it that they look to see how they could help to increase the general income of the migrant, much the same way as they try to do for those who remained at home.

Third. Much is being discussed about the possible brain-drain that the countries of the emigrants could suffer, but little or nothing about what they should be worrying more, the possibility of a heart-drain. The truth is that if those countries that today receive all the remittances do not occupy themselves with changing the conditions that makes migration almost obligatory, and of maintaining the contact with the hearts of their emigrants, then these motherlands could very soon find themselves substituted by step-motherlands, and the remittances suddenly disappear, and not by magic.

Indeed, all stepmothers-to-be should be interested in this issue, if they do not want any of their temporary arrangements to become permanent.

Translated from articles published in El Universal, Caracas and El Tiempo Latino, Washington.