Remittances are an important and effective tool in the fight against poverty. Therefore, we who defend global solidarity and international development cooperation should take action against the attempts to limit labor immigration that we are now seeing from certain parties and trade unions. It writes Mattias Goldmann, CEO of the think tank Fores.
The labor immigration reform celebrates five years. It is a reform that has meant a lot both to Sweden and to the vulnerable in the world - and which is perhaps the most important complement to the development assistance we have.
When the first five years of freer labor immigration are now summed up, there are two diametrically opposed lines in the debate. On the one hand those who, thanks to the more generous rules, have found labor they cannot do without, on the other hand those who want to ensure that non-Europeans are only admitted after we have failed to find a Swede who can do the job. A globally more important aspect is seldom or never discussed: How labor immigration can contribute to poverty reduction and better development in poorer parts of the world.
Ignoring the contribution of labor immigration to the fight against poverty is contrary to the Policy for Global Development (PGU) decided by the Riksdag, but also means that we miss an economic mechanism that in its best moments clearly outshines aid in both scope and efficiency.
En new dissertation from the School of Business, Economics and Law at the University of Gothenburg shows that remittances, ie the money that migrants send home to their country of origin, have positive spreading effects far beyond their own family. In many developing countries, remittances are far greater than both development aid and foreign direct investment, and are also much more stable.
The migrant sends home an average of one sixth of the income, which in Europe is on average 35 times higher than the average salary in sub-Saharan Africa. This means that remittances from quite a few migrants can make a big difference for the whole country. The money is spent in the domestic economy, increasing demand for goods and services produced by the local population, alleviating poverty and stimulating growth.
At least 400 billion dollars are sent home to the country of origin every year by people who work in countries like Sweden - probably the sum is much larger because the flow is difficult to map. The official figure already exceeds the $ 300 billion in net foreign direct investment received by developing countries in 2011, and the rate of increase is much higher. In twenty-two developing countries, official transfers accounted for over one tenth of the economy in 2011.
Many of us have donated money to the Philippines in recent months, and emergency aid has increased rapidly. However, it pales in comparison to the remittances from Filipinos working abroad, who even before the disaster accounted for 10 percent of the country's economy - probably much more in reality. The funds increased very quickly after the hurricane, were sent via already established channels and therefore quickly reached those in need. It looks the same in other parts of the world; the remittances not only lay the foundation for rising prosperity but are a well-functioning channel in times of sudden need.
Labor immigration, which accounts for a large part of the remittances, also means a "brain gain", where many migrants after a few years return to their countries of origin with new knowledge to use, contacts and networks to use and capital to invest. In this part, development assistance is not nearly as effective.
It would be wrong to make remit to aid in the debate. Both are needed, and parts of the assistance are based on a moral imperative to reciprocate for part of the damage and suffering we have caused and with e.g. Climate change continues to cause. But all of us who defend global solidarity and international development cooperation should take action against the attempts to limit labor immigration that we are now seeing from certain parties and trade unions.
Matthias Goldmann
Vd, think tank Fores
This is a debate article. The author is responsible for analysis and opinions in the text.
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