Remittances Dominate Aid Yet Remain Unspoken

The underappreciated thread that ties the global economy together is remittances – the money sent by migrants back to their home countries.

Remittances are the silent player in the immigration debate. They’re almost never referred to in our domestic politics or press.

The news monitoring site Factiva records just two mentions of remittances in Australian newspapers over the past two years.

Compare that to the reams of copy filed about foreign aid – 706 newspaper articles in the same period. Then add all the vox pops, chat shows, and talkback calls. Recall the hand-wringing which greeted Wayne Swan’s announcement that foreign aid growth would be modest in this budget. Yes, both left and right positively obsess about the cash the government gives to the third world.
But, even though we’re also constantly yabbering about immigrants, the vast sums of money foreign workers privately send home themselves goes entirely unnoticed.

So a new World Bank report, Migration and Remittances during the Global Financial Crisis and Beyond, released last week is all but guaranteed to be ignored. This is a shame.

The report underlines that the amount of money migrants send home far, far exceeds the amount of money the West spends on foreign aid. Remittances are a big deal.

And they’re an increasingly big deal. Total remittances used to be double the total amount of aid, which was impressive enough. But now, after the financial crisis, they are more than triple.
This is not because foreign aid has declined – official development assistance has continued to grow during the economic downturn. It’s because remittances have shot up further. While the developed world spends roughly $US100 billion on aid every year, migrants now send more than $300 billion home. And as remittances are extremely hard to measure (not all of it is sent through formal channels) it is likely to be much more.

This is a good thing. The financial crisis demonstrated that remittance income is stable income. Foreign direct investment in the developing world has wildly fluctuated since 2008 and has not yet returned to pre-crisis levels. By contrast, remittance flows have remained relatively steady. They dipped slightly in 2009 but quickly popped up again; in two years, the World Bank believes global remittances will be close to $600 billion a year.

We’re all familiar with the long-running “trade versus aid” debate. Which is the most effective development policy? There’s an increasing consensus that the actual winner is remittances.
So the significance of the global remittance economy ought to dominate the immigration debate.

But it doesn’t. Understandably, Australians look at immigration through Australian eyes. The emphasis is on us: how will migration programs affect domestic employment? How will migrants culturally integrate?

Barely do the fortunes of the migrants themselves figure. Working in the rich world, whether temporarily or permanently, is extraordinarily beneficial for people born in poor countries. The opportunities are much greater, and the prevailing salary for equivalent work much higher.

This simple and obvious fact is virtually absent from discussions about immigration. Perhaps it is an unstated assumption shared by all participants. But as the development economist Michael Clemens has pointed out, the benefits which are conferred on the migrants and their countries of origin are almost uniformly neglected by all sides of the debate.

No more so than with remittances. The flow of money from migrants helps fund investment and grow capital in the world’s poorest countries. It keeps families above the poverty line. It goes directly to households.

And as a form of third world development, remittances put no pressure on taxpayers in the first world. They are not planned by clever development economists or policymakers. They have not been coordinated by an international bureaucracy. Indeed, remittances are nothing but the result of the hard work of migrants.

That might sound hard-hearted but it helps keep the flow of money stable and targeted – certainly more stable and targeted than foreign aid, which is highly influenced by political decisions, and subject to the budget planning of treasurers for whom third world development is not an urgent priority.

But there’s also a political reason that remittances don’t get talked about. It’s in nobody’s interest to do so.

They don’t fit the left’s vision of economic development. Foreign aid is grand and interventionist and state-driven. Remittances are earned by individuals and spent in ways the migrants and their families choose. One small, pathetic, but indicative criticism of remittances from the left says they encourage “conspicuous consumption” in the developing world. It’s a common complaint and a bizarre one. Is the third world’s problem really not poverty but consumerism?

And it’s clear that many calls for foreign aid are driven by a belief in distributive justice – that foreign aid should be a penance for first world wealth. Certainly this is the message broadcast by the fashionable anti-poverty causes marketed to young people.

Nor do remittances appeal to conservative populists. Remittances offer one of the most compelling utilitarian arguments for importing foreign workers from the developing world – not only is immigration good for our economy and the migrants themselves, it’s also good for the countries the migrants come from. This is not a story that those sceptical of immigration want to tell.

But it is one we’ll have to start recognising if we want to understand our place in the global age of migration.

Gillard Plays The Unedifying ‘Small Australia’ Card

It’s obvious what Julia Gillard was doing when she claimed Enterprise Migration Agreements for mining projects would not favour foreign workers.

Talking to the press on Saturday, the Prime Minister said, “I can assure everyone that we will be putting the interests of Australians at the front of the queue and we will be putting Australians looking for work at the front of the queue.”

Ah, yes. Our old friend The Queue.

There’s not much more evocative in Australian politics than The Queue. For more than a decade it’s neatly divided asylum seekers into moral categories. The virtuous wait in refugee camps; cheaters hop on boats.

Even more than most politicians, Gillard thinks carefully about what she says. Her advisors are smart. When she brings up The Queue in the context of immigration, it’s not likely to be a slip of the tongue. Language matters. This language is about those who are deserving and those who aren’t.

Especially considering that just like the Refugee Queue, the Mining Jobs Queue is fictional. It doesn’t exist. As Peter Martin pointed out in Fairfax papers on Monday, Enterprise Migration Agreements are used for work Australians simply don’t want. There can be no queue if nobody is standing in it.

Most press about this furious little debate has focused on how it makes Julia Gillard look weak, and her hold on the Lodge look weaker. But the debate reveals something more important than the leadership soap opera.

Think back to the 2010 federal election. Few things in that campaign were more dispiriting than the “small Australia” doctrine.

Both the Coalition and the ALP tried to link resentment about asylum seekers to resentment about traffic congestion. The whole thing was farcical. Gillard took Western Sydney MP David Bradbury to Darwin to hunt for refugee boats. And the opposition, trying to demonstrate just how serious they were about slowing immigration, proposed to rename the Productivity Commission the “Productivity and Sustainability Commission”.

The last few days have made it clear the small Australia doctrine was not a temporary anomaly, confined to a weird election held under weird circumstances. It’s no longer just asylum seekers that are controversial. Bipartisan immigration scepticism now looks like it could be an enduring feature of the Australian political landscape.

The Enterprise Migration Agreement is going ahead. But the announcement sent the Government into a tailspin. In Parliament on Monday, Gillard didn’t want to say whether she supported the agreement. How extraordinary: it’s her own Government’s policy.

The unions are opposed to the migration agreements, and Gillard owes her position to them. But unions make all sorts of ambit claims which the Labor government pay no attention to. This one was apparently too big a deal to dismiss.

So the worst part is that instead of ignoring the unions’ shrill protest, the Prime Minister has all but apologised for thinking about foreign workers.

From Gillard’s press conference on Saturday:

My concern here, and the concern of the Labor Government, is always to put Australian jobs first … we put Australian jobs first and now we are putting Aussie jobs first too … we’re working to make sure Aussies get jobs first … we are skilling Australians first and getting them the jobs first … Australians will always come first in getting these job opportunities.

And with the hastily announced Jobs Board (a mining jobs website with the purpose of favouring domestic workers over foreign ones) the Government is ratifying the union movement’s claim that immigration crowds Australians out of work. This is a staple argument made by opponents of immigration, and it is completely wrong. No Australian Prime Minister should indulge it.
Yet this time last year it seemed we’d gotten over small Australia.

The May 2011 budget was a repudiation of the previous year’s excesses. It was then that the Government introduced the Enterprise Migration Agreements policy in the first place. Wayne Swan also announced another 16,000 immigration positions, the majority of which were skilled migrants sent to rural areas.

Australia’s great project has always been to attract more workers and a bigger population. The 2011 budget resumed that course.

But at that stage the next election was far in the distance. Now one is closer – with or without the Thomson and Slipper scandals – and the Labor government is much more frail. Gillard knows if she doesn’t play the Aussie-jobs-for-Aussie-workers card in the future campaign, then the Coalition certainly will. If the past is any guide, they probably will anyway.

The good money says the next election will be played out on the depressing terms of the election of 2010 – a populist, unedifying backlash against population growth and immigration. Australia will not be better off for it.

Locking People Away Forever Because ASIO Reckons

It’s a scandal that administrative decisions which result in indefinite detention are made outside judicial scrutiny.

In his 1885 book An Introduction to the Study of the Law of the Constitution, the great English jurist AV Dicey said, “No man is punishable or can be lawfully made to suffer in body or goods except for a distinct breach of law established in the ordinary Courts of the land.”

This, he argued, was the first principle of the rule of law. With his book, Dicey shaped the English-speaking world’s legal philosophy. He formalised the ideals suggested in documents like the Magna Carta, but which can be traced back to Aristotle.

So compare Dicey’s high principles to a statement made by the head of ASIO, David Irvine, to a parliamentary committee in November last year.

Explaining why he wouldn’t even tell Parliament the grounds on which his organisation makes security assessments for refugees, the ASIO boss said, “Once the criteria for making assessments are known, then you will find very quickly that all the applicants will have methods of evading or avoiding demonstrating those characteristics.”

The Department of Immigration only refers asylum seekers to ASIO for security checks after it’s been determined they qualify for refugee status. It’s one of the last steps. By the time ASIO looks at them, the Australian Government already believes they have a well-founded fear of being persecuted.

So when a refugee receives an adverse security assessment, they’re thrown into administrative limbo. They are unable to return home (too dangerous for them) and they are unable to enter Australia (too dangerous for us). The result is indefinite detention. It’s a classically bureaucratic non-solution. Just lock them up forever and hope the problem goes away.

This is pretty bad, but no-one said national security wasn’t about tough choices.

What makes the situation fundamentally and egregiously illiberal is the fact that these refugees have no idea why they have been detained.

The refugees are not told why ASIO believes they are a security threat. They are not told what evidence the belief is based on. And they have no opportunity to challenge the assessment. There is no review process where the merits of their case can be scrutinised.

In the interminable debate about asylum seeker policy, much has been made of the distinction between incarceration – which happens to criminals – and immigration detention – an administrative process which all asylum seekers undergo. Temporary administrative detention is not punishment.

But when a person is detained indefinitely because the government believes they are a security threat, that distinction is nowhere near as clear. We should never be asked to take a government department on its word that someone must be locked up.

This makes the claims that there are heavy national security issues at stake quite hollow.

No doubt there are circumstances where security demands that some people not be let into the country. David Irvine assured the parliamentary committee that ASIO makes negative findings sparingly and hesitantly. In his words, “We do not take a decision to issue an adverse security assessment lightly and nor are we contemptuous of or blasé about the human rights of the individuals involved.”

That may be true. ASIO could be bureaucratic paragons. But with no checks, we cannot have any confidence they are. Ronald Reagan was fond of the phrase “trust, but verify”. It applies here. A liberal society trusts its bureaucratic and judicial administration because of safeguards built into that system – not because of the inherent honesty and virtue of the public service.

So the issue here is not simply about justice for the 50-odd refugees stuck in this administrative black hole. Without institutional safeguards, the Australian public should have no confidence in ASIO’s decisions. The ASIO chief may have meant his assurances to be comforting, but they only remind us that his assurances are all we’ve got.

In a story on Monday night, the ABC’s 7.30 spent time discussing the adverse assessments made about refugees with links to the Tamil Tigers. The program offered up academics with different views about the security risks they presented, and an interview with a former member now living in Australia.

All very interesting. But this debate is in many ways premature. It grants the system an institutional legitimacy which it does not have.

By not implementing a right for refugees (or their security-cleared advocates, or a tribunal) to question the merits of individual cases, we have, by accident, established a system where we literally lock people away forever just because somebody at ASIO “reckons”.

It’s hard to imagine anything more illiberal, anything more contrary to Dicey’s great principles, than that.

Memo To Unions: White Australia Was A Bad Idea

Rarely was the relationship between economic nationalism and xenophobia made so clear. The Transport Workers Union’s Tony Sheldon, after complaining about Qantas’s industrial relations tactics, said that his union would ”stand by the workforce, the Australian brand of Qantas and not have it Asianised”.

Asianised? This was not a slip of the tongue. A variant Sheldon has also used is ”Asianisation”. So is Asianisation worse than normal outsourcing?

That’s no dog whistle; there is no subtext. Google ”Asianisation” and the first page of results offers up ”Australian nativists”, manic claims about the Yellow Peril, and warnings about our ”national suicide”. Sure, those hysterics are on the margins of Australian society. But the TWU boss is the chief opponent of the Qantas restructure and of Alan Joyce who, as many people have pointed out, has a thick accent, betraying his foreignness. Sheldon’s easy use of these terms is damning.

Damning, but not damned. Contrast this missing outrage to the handwringing that followed Tony Abbott’s clearly rhetorical ”blood pledge” to repeal the carbon tax. There would have been fury if a conservative leader said anything remotely like what Sheldon did. The ABC’s Q&A would have spent a show debating whether Australia is a racist country. Serious talkback hosts would have spent the week talking about Enoch Powell. None of those things happened.

Opposition to trade, outsourcing and labour migration has always been tightly bound up with xenophobia. In Australian history, racism has usually had an economic context. After all, why should it be a matter of urgent public policy that some jobs be kept within Australian borders? On what moral basis is limiting immigration to protect workers from competition a good thing, as was proposed by unions at the start of the financial crisis.

Protectionism is bad for many reasons. It raises prices and lowers living standards – worrying enough. But its moral core is dark. Surely Australians are no more deserving of jobs than people from China, Japan or Singapore. Economic nationalism implies natives are worth more than foreigners. The far right is explicit about this. The Australian Protectionist Party makes its regressive views (nationalisation, high tariffs, less immigration) part and parcel of its hostility to multiculturalism. One Nation was also sceptical about globalisation.

So given the union movement’s historical culpability for the White Australia policy, you would think someone like Sheldon might be sensitive to the nuances of xenophobia.

Labor-sympathetic historians in recent decades have tried to sheet the White Australia policy home to prejudice. Immigration restriction was, many post-1960s historians have claimed, simply the result of a racist zeitgeist.

But the White Australia policy was led by a union movement trying to eliminate competition in the labour market. This is an awkward truth.

The government’s own fact sheet on the policy mentions how ”hard-working” immigrants were, yet neglects to mention the role played by unions and the Labor Party in kicking them out.

Immigration restrictions were just a part of it. It was the official policy of Labor prime minister Andrew Fisher to grant ”absolute preference” to white unionists in workplaces – and to encourage employers to fire ”coloured” workers. The Australian Socialist League called for the ”exclusion of races whose presence under present competitive conditions might lower the standard of living of Australian workers”.

The only serious opposition to White Australia came from pro-market thinkers – particularly the great free-trade MP Bruce Smith, who described the policy as ”racial prejudice”.

Steven Landsburg, an American professor of economics, asked recently: ”If it’s OK to enrich ourselves by denying foreigners the right to earn a living, why shouldn’t we enrich ourselves by invading peaceful countries and seizing their assets?” Obviously the latter is wrong. The former is just as wrong.

There’s no reason to believe workers made redundant by Qantas will end up on the scrap heap. That sort of theory was barely plausible when the Australian economy was being opened up in the 1980s and 1990s. It is ludicrous now. We’ve had 30 years of globalisation and the unemployment rates are at record lows. International trade is not war. There is no fixed pie of jobs over which protectionist governments must fight for a share. Nor is there any reason to believe basing some Qantas services in Asia will be bad for consumers. Few companies would deliberately make their service less desirable.

All this leaves us with is a union boss attempting to stoke xenophobia in service of his own economic interests. That’s something with which Australian history is sadly familiar.

Charade Must End, And Both Sides Of Politics Know It

Perhaps now Labor and the Coalition could come clean with voters. Both sides of politics intend to grow Australia with immigration – to continue the 200-year project of population expansion. This project is as important today as it was during the Victorian gold rush. They just don’t want to admit it.
 
Treasurer Wayne Swan announced in last week’s budget an increase in immigration of 16,000 people; three-quarters of those will be skilled migrants sent to regional areas.
 
That’s on top of the government’s new Enterprise Migration Agreements. The agreements allow large mining and infrastructure firms to negotiate tailored guest worker schemes for foreign labour, as long as they implement training programs for local workers too.
 
Sure, in the scheme of things, these changes will only modestly increase immigration levels.
 
But they’ve been announced by a government that spent the 2010 election talking about how they planned to slow population growth, blamed skilled migrants for undercutting wages, and promised to “take a breather” on immigration.
 
The increases have been embraced by an opposition that ran even harder against population during the campaign. Supporting the government’s migration increase last week, shadow treasurer Joe Hockey said it was necessary if we were to avoid inflation.
 
Last year Julia Gillard and Tony Abbott fell over each other trying to appeal to voters convinced that traffic jams and refugee boats were two sides of the same problem.
 
Labor announced an inquiry into sustainable population, plainly hoping it would calm those who hated Kevin Rudd’s ”Big Australia”.
 
The “stable population” types welcomed the opportunity to present their misanthropic views on closed borders and reduced birth rates. Green groups proposed population limits too, prioritising the Australian environment above the well-being of potential migrants.
 
But the government must have known that business lobbyists would call for higher migration during the inquiry. The likely final result would be an expansion, not a reduction, of foreign skilled migration.
 
The government released the inquiry’s report on Friday. It simply says that skilled migrants should be sent to targeted industries and regions, and that governments should plan better.
 
The ”small Australia” rhetoric of the 2010 election was just for show. So let’s give up the charade. Australia needs more migrants; our economy is begging for them.
 
The enormous mineral projects in Western Australia and the North need mass labour if we’re going to continue to rely on the resources boom to underpin growth. The Chinese demand, which Treasury hopes will save the federal budget, will only be met with new workers.
 
The National Farmers Federation reckons agriculture needs at least 100,000 more workers now that the drought has lifted.
 
Booming global demand for resources, and booming global demand for food – a government that did not make policy changes to meet those demands would be negligent.
 
Could we try to fill all these positions with existing Australian residents? Well, the unemployment rate is in the fours. There aren’t many Australians available.
 
But the more troubling answer to that question comes from another proposal in this budget – the $1700 bonus for apprentices if they complete their training. That seems perverse. Do we really have to bribe people to qualify for jobs that offer high wages?
 
There is, of course, a powerful moral argument for accepting more immigrants. Migrants do more than just help our economy. They travel here for work to support themselves and their families. That’s the moral dimension – people should be free to build a better life, as long as they don’t harm others in the process.
 
Migrants do not steal jobs from locals who want to work. The economic literature on that question is unambiguous.
 
Nor is infrastructure the problem immigration sceptics claim. Migrants pay taxes. Competent governments should be able to deploy those taxes for transport and services. When incompetent ones – read New South Wales – do not, that’s not immigrants’ fault.
 
All these points are as true for unskilled migrants as much as skilled ones. A far-sighted government would look at expand-ing the unskilled cohort. The economy could easily use them.
 
Immigration is overwhelmingly more effective than foreign aid at boosting development in the Third World. Migrants send money back home. Globally, the amount of cash remitted to the developing countries is more than total global spending on foreign aid. And it goes directly to those who need it.
 
So for Bob Brown to describe economic migrants this week as “queue jumpers” is obscene. The Greens’ support for humanitarian programs is laudable; their opposition to immigration in general is not.
 
Throughout Australian history, the “population problem” has been about how we will people the continent, not whether we should. And despite the aberration that was the 2010 election, it still is.

Multiculturalism Is A Useless Word

Multiculturalism is one of the least useful words in Australian politics.
It owes all its power to ambiguity. It is divisive because it is vague.
Recall that multiculturalism refers not to the policy of letting in migrants and refugees, but to how we deal with them when they get here. Multiculturalism is the opposite of ‘assimilation’, not the opposite of discriminatory immigration settings.
If multiculturalism is a positive program, a deliberate, imposed set of policies and laws, then those policies are few and not easy to pin down.
Interpreters, multiple languages on government documents, and a few scattered cultural grants do not make a policy revolution. A female-only swimming session does not constitute a threat to the Commonwealth.
The political rhetoric about multiculturalism is vastly disproportionate to the number of policies which multiculturalism has apparently inspired.
But if, alternatively, multiculturalism is an ideology, it is an ill-defined and unclear one.
Sure, ideas have consequences. Yet it is hard to see how stating that “every person should be able to maintain his or her culture without prejudice or disadvantage” (in the influential formulation of the 1978 Galbally Report into migrant services) leads to migrant crime, one of the many claimed consequences of multiculturalism. Or how it causes new arrivals to prefer to settle in suburbs near other new arrivals – an entirely reasonable preference, as one person’s ethnic enclave is another’s comfort in numbers.
Attributing the misbehaviour of some young migrants to vague philosophical statements made in bureaucratic documents gives government too much credit. Politicians are just not that influential.
And it is too simple to blame law and order problems on migration levels or ethnicity, rather than under-policing and skewed police priorities.
The basic idea of a liberal democracy is that individuals can live their own lives according to their own preferences under a neutral legal and political framework.
Rights in a liberal democracy are held by individuals, not by groups. Nobody has more or different rights than another by virtue of their cultural origin.
No substantive policy imposed in Australia under the banner of multiculturalism has undermined these basic principles. Sure, there’s been a lot of academic waffle about cultural relativism and the superiority of non-Western thinking, but that waffle has not been translated into law.
Australia has done settlement policy pretty well.
Several European leaders have made recent statements damning multiculturalism, and Australian critics have claimed these statements are just as applicable to our circumstances. They are not.
For one, the European economy is vastly different.
It’s no coincidence that the biggest social problems with multiculturalism occur in European countries with sluggish jobs markets. Or in those countries with extremely generous welfare schemes.
Nothing impedes integration like unemployment.
Other specific policies can exacerbate the natural, well-known, but manageable challenges of mass immigration.
Germany’s Chancellor Angela Merkel said late last year that multiculturalism has failed. But this is in no small part due to the legacy of Germany’s post-war guest worker program, which was so poorly designed as to entrench a disaffected Turkish underclass.
In the 1960s and 1970s, Turkish guest workers were meant to be temporary. The government deliberately encouraged to them live outside German society – they were housed in dormitories near the factories where they worked.
But the two-year rotation for guest workers was extended for another two years, then for four decades. All the while the workers expected to be sent back. One Turkish migrant told Der Speigel last year that “Some of our friends kept their packed suitcases under the bed or on top of a closet for 10 or 15 years, so that they could leave at a moment’s notice.”
No wonder Germany has had integration problems.
We’ve avoided these sorts of policy mistakes. Australia has strict walls around welfare, and a comparatively dynamic labour market.
As has the United States. Last week in the conservative National Review, the law professor Eugene Volokh pointed out that the US was also a successfully “multicultural” nation. Volokh argued that the success of this policy relied on a few basic principles like economic liberty and freedom of speech.
None of this is to deny the tensions when migrants enter countries that value individual liberty and the right to free association.
But it does give us a guide to minimise those tensions. Social integration comes after economic integration. Secure employment helps migrants build roots and communities. Migrants engaged in peaceful commerce feel more connected to their adopted country than those on welfare or unable to find work.
During his exile in England in the early 18th century, Voltaire observed that in the centres of trade, “representatives of all the peoples gathered… There, the Jew, the Muslim, and the Christian deal with each other as if they shared the same religion and give the name “infidel” only to those who go bankrupt.”
Multiculturalism means vastly different things in different countries. Let’s stop obsessing over this useless word, and talk about specifics.

In A Truly Globalised World, Immigration Must Be Free

Four Corners last week told the story of Landina, a three-month-old girl lifted from the ruins of a Haitian hospital and evacuated to the United Kingdom for lifesaving medical treatment.
 
The show focused on the search for Landina’s family and the ethical dilemmas faced by the British surgeon who saved her life. Decisions had to be made about whether to return the girl to Haiti or keep her in England for long-term care.
 
But, at its heart, the story of Landina is the story of borders and immigration restrictions.
 
The choice to take the baby to England was a medical one. Yet the sad reality is, if she stays permanently, her life will be on almost every measure better than had she gone home to Haiti.
 
Being separated from her mother will be, of course, hard. But her potential income, to take an obvious indicator of wellbeing, will be at least five to six times higher than it would have been in Haiti. No matter what level of education she obtains.
 
Landina has this opportunity because she was plucked from the rubble of an earthquake by a compassionate doctor.
 
Fifty per cent of Haitians say they would leave Haiti if they could.
 
Our world, we’re continuously told, is a globalised world. In 2011, trade is not completely free, but the barriers to trade are lower than they have been in centuries.
 
Capital, too, is allocated internationally – investors shift their money from country to country, from market to market, looking for the most profitable enterprises.
 
Goods move easily. Money moves easily. That’s all great.
 
But the situation for people is very different. People don’t move around the world easily at all.
 
With its quotas, plodding bureaucracy, and, more obviously, all the smuggling, immigration today looks strikingly like the restricted and protectionist global trade of yesterday.
 
Indeed, over the last century, migration has de-liberalised – the relatively open borders of the 19th century have become the closed and rigid borders of the 21st century.
 
All the same principles which make free trade a win-win apply to free movement of people – large scale immigration allows people to work where they can be most productive, further facilitating the economic specialisation that has boosted global prosperity.
 
The development economist Lant Pritchett describes our world as “everything-but-labour globalisation”.
 
In his 2006 book, Let Their People Come: Breaking the Policy Deadlock on International Labor Mobility, Pritchett cites a study which found the economic benefits of free movement of people would be spectacular.
 
Eliminating the planet’s remaining trade barriers would increase global GDP by around $US100 billion.
 
Eliminating immigration barriers, by comparison, would as much as double world income: that is, increase global GDP by $US60 trillion.
 
This added wealth would be shared, but the overwhelming beneficiaries would be people who now live in poor countries.
 
Sure, right now, poverty in the third world is caused and maintained by institutional failure: bad governance, bad laws, bad justice, bad bureaucracies, bad political systems, and bad economic policy. In recent decades, having seen the failure of too many foreign aid programs, the first world’s development focus has been on fixing those institutions.
 
Slowly improvements have been made.
 
Yet slow improvements are no consolation for those people living in poverty, being told they cannot travel to rich countries where there is abundant work and where their labour could be usefully employed.
 
So the question – repeatedly posed in discussions of economic development – of whether we should focus on foreign trade or foreign aid is badly incomplete. The biggest idea in development no-one has really tried (in the phrase of economist Michael Clemens) is allowing large scale immigration from the third world to the first.
 
The story of a Haitian baby being raised in Britain is just a small window into the possibilities of this shift in development thinking.
 
After all it is not Haiti, or, say, Nigeria, we want to be rich: it is Haitians and Nigerians.
 
None of the standard arguments against immigration hold up to careful scrutiny. Immigrants do not steal jobs. They do not erode living standards. Those who move for work contribute more tax than they take in public services. Migrants – for all the tedious polemic and hyperbole – have never managed to undermine the political and social cultures of host nations.
 
(We can debate the merits of multiculturalism later, but for now it will suffice to say nobody agrees what the word actually means.)
 
In the Four Corners documentary, the difference between Landina’s future life in the first world and her family’s life was strikingly clear. In Haiti, the filmmakers followed the surgeon to a tour of Landina’s family home – a single, unadorned room of concrete floors and walls and fire corner, deep in a Port au Prince slum.
 
When the camera turned to England, Landina was carried into a middle class British home, with long passages and yellow painted walls, full of furniture.
 
It was a graphic display of the difference in living standards between the first and the third world.
 
Development activists who have spent their careers obsessing over the difference between free and “fair” trade have missed the point entirely.
 
Any effective strategy to eliminate world poverty will have to focus on immigration.

Time For A Rethink On Migrants – It’s No Crime To Seek A Better Life

The decisions of the Refugee Review Tribunal make disheartening reading.
It hears appeals from individuals who have had their application for a protection visa refused.
For instance: the Fijian man who applied for protection because “my educational outlook and possible employment opportunities may not allow me to reach my fullest potential”. Not really persecution, so he was refused a protection visa and refused entry into Australia to find work.
Or the Lebanese resident who claimed to be pursued by the terrorist group Fatah al-Islam, but applied for a protection visa because he lost his job and needed work. He was refused, too. Or the Indonesian woman seeking protection “due to economic hardship as it was impossible to make a living and support her young child”. Also refused.
The tribunal’s decisions are no doubt correct in law. Applicants often have inconsistent stories, leading the tribunal to question their truthfulness. Others simply do not fit the legal criteria for humanitarian entry. They do not have a “well-founded fear of being persecuted”.
But is Australia really better off having refused these individuals a visa?
Certainly the applicants are not. They would not have qualified for one of our numerous skilled migration programs. For many trying to get into Australia, claims of political or religious persecution are just pretexts: the real reason they want humanitarian visas is to seek employment and to participate in Australia’s high standard of living.
Advocates of strong border protection have dismissed these types of visa-seekers as “economic” refugees. And with asylum numbers booming, refugees fleeing poverty rather than persecution are clogging up the processing of humanitarian entrants.
Here is one way to fix that. The government could introduce a visa category for economic refugees.
After all, fleeing unemployment and destitution is just as justifiable as fleeing political persecution. Whatever moral obligation we have to accept political refugees applies just as easily to economic ones.
Few of the usual arguments against migration apply to economic refugees. For example, they need not be a drain on taxpayers.
Sure, humanitarian entrants immediately qualify for a wide range of government programs. They get caseworkers, language lessons and subsidised counselling. They receive settlement grants, crisis payments and Centrelink benefits and advances.
Yet a program for economic refugees needn’t be so generous. If migrants flee to Australia to seek employment, it is reasonable to insist they find employment. Or, at the very least, refuse to support them if they do not. Migrants who come to Australia looking for work seek to contribute more than they take.
Those three people rejected by the Refugee Review Tribunal were eager find employment. And, presumably, they were eager to spend. They could have contributed to our economy, society and culture.
There is an enormous need in agricultural industries for workers – an unskilled demand not being supplied by Australians – and significant demand in Australia’s north-west, where a lack of unskilled labour has inflated wages to an exaggerated degree. Low-skilled labour (with its low wages) could fill a substantial gap in the urban labour market for nannies, live-in carers and house cleaners.
Bosses such as Rio Tinto’s Sam Walsh and Leighton Holdings’ Wal King have made it clear heavy red tape for sponsored employment visas are restraining their ability to bring in migrant workers.
The Australian National University’s Professor Peter McDonald argued last week foreign contract employees are needed to build vital infrastructure. Economic refugees would be ideal candidates.
If that demand doesn’t exist, then economic refugees will not be interested in coming here in the first place.
Of course, migrant labour should not be used as an excuse to ignore policy problems in our higher education and training sectors. But we have a strong economy and businesses looking for labour.
We also must remember that migrants tend to be more entrepreneurial than everybody else – economic refugees make their own opportunities for work. So to be rejecting possible participants in our economy at the same time we are crying out for them is inexplicable.
And it should not need to be said, but allowing people to seek work and opportunity in Australia is a moral and humane imperative. The tragedy on Christmas Island should remind us of how desperate some are to find a better life here.
Allowing economic migrants into Australia also helps the developing world. The money migrants send back to their home countries is the unsung engine of globalisation.
According to one survey, 96 per cent of migrants from the Horn of Africa remitted part of their earnings back to family and friends at home. In 2006 (the last good estimate we have), migrants in Australia remitted $2.8 billion to the developing world.
It is more than we spent on foreign aid that year: $2.1 billion. Globally, the amount transferred in remittances is larger than that spent on aid. This money goes straight to families, rather than being filtered through aid agencies or corrupt governments.
So when three people are refused residency in Australia because they don’t have a well-founded fear of persecution, most people’s gut reaction might be that the legal system is working as it should.
But every economic refugee – every potential worker and consumer – we exclude makes Australia ever so slightly poorer.

Seeking a political crisis

“Stop the boats, we must” stated Tony Abbott last week, announcing the Coalition’s intention to bring back temporary protection visas for asylum seekers.

Must we? It’s not clear why. This has all the hallmarks of a concocted political crisis.

Certainly, 4,893 asylum seekers arrived by boat in 2009-10, a significant increase on the previous year’s 1,000 arrivals. According to the federal opposition that’s the most ever, higher than it was before the Howard government introduced temporary protection visas nearly a decade ago.

Sounds like a lot, unless you recall the federal opposition has also been claiming Australia currently has total net migration of 300,000 people per year. Or recall the fact that there are 50,000 people already in the country who have over-stayed their visas – as they are not seeking asylum, this is true ‘illegal immigration’. If we really want to secure our borders, we’ll have to eliminate tourist visas first.

It’s also worth noting the large number of boat arrivals to Australia in 2009-10 is not actually the largest influx in any 12-month period ever. If we measure by calendar years, rather than by financial years, 5,516 people arrived in 2001.

Accounting trickery, sure. But comparing calendar years is no more arbitrary than comparing financial years. Neither has our refugee program as a whole gotten out of control.

Australia’s humanitarian intake has remained stable for the last twenty years, teetering around 13,000 humanitarian visas granted per annum. Our intake has been much higher in the past. Under the Fraser government, this figure was well over 20,000.

We could easily take more. Expanding our immigration program is hands-down the best thing we could do to help the developing world. Migrants send money and skills back home. Allowing more people to move freely across national borders to work would be overwhelmingly more beneficial than anything we could do with foreign aid.

Anyway, the number of asylum seekers who come by boat is a tiny proportion of the masses of people who come through Australia every year. So while asylum seekers are a controversial political football, they are not a serious policy problem.

You wouldn’t know that from all the bellicose political rhetoric. After one boat tragically exploded in April last year, Kevin Rudd claimed “People smugglers are engaged in the world’s most evil trade and they should all rot in jail because they represent the absolute scum of the earth”.

The Prime Minister is becoming known for his hyperbole. But he misses the serious point. We mustn’t pretend trying to stop people from fleeing persecution is being compassionate.

Refugees are active participants in the choice to risk the long journey to Australia. Their decision to take the risk comes from their wish to escape and build a better life.

The dreadful risks of taking a boat to Australia are an indication of the desperation of the passengers, not of the depravity of those who they pay to help them. After all, the big disincentive to take the dangerous journey is the dangerous journey itself. Not the bureaucratic hurdles which the government throws in the asylum seekers’ way.

More than eighty per cent of boat arrivals to Australia this year have come from Afghanistan and Sri Lanka. Both countries have been in strife, and are nearby. It’s not just us: since 2008 the rest of the world has experienced substantial surges in Afghani and Sri Lankan refugees as well.

The opposition’s proposed reintroduction of temporary protection visas would do very little to alter the calculated risk asylum seekers make when they hop on the boats. But it could do considerable harm once those refugees arrive.

A source of much conservative and right-of-centre unease with refugee programs (and immigration programs in general) is that they can be a drain on the welfare system. They fear migrants often fail to integrate fully into the Australian economy; that they will not make productive members of society.

If anything, temporary protection visas would make this worse.

Refugees with temporary status are substantially less likely to find stable work than refugees with permanent status. Employers are understandably reluctant to hire and train someone whose residency is insecure.

And migrants left out of the workforce struggle to participate in Australian society. Indeed, as they may be unable to gain permanent residency once their temporary status has expired, refugees have less of an incentive to try. Learning English, for example, is a substantial investment. Refugees are less likely to make the investment if their residency could be revoked.

This should be as much a concern about Australia’s social cohesion as it is about the wellbeing of individual refugees. After all, we want refugees to join the Australian community. Making refugee status temporary – telling them their stay here is only provisional, or even transitory – does nothing but undermine their integration.

Immigration and growth: 200 years of success

There’s a Rowan Atkinson sketch about a (pre-David Cameron) Conservative Party speech. In character, Atkinson starts talking about Indian immigrants: “I like curry,” he says. “But, now that we’ve got the recipe… is there really any need for them to stay?”

That combination of populism and affected naivety about immigration and population suddenly dominates our political sphere.

In Tony Burke, we now have Australia’s first dedicated Minister for Population. Under Tony Abbott, the Coalition is looking to make population growth from immigration into an election issue. The shadow immigration minister has called for a dramatic reduction in migrants. There’s now an opposition sub-committee dedicated to population.

And for what it’s worth, the Greens are instinctively hostile to anything that increases consumption within our territorial borders. More immigrants, economic growth, new products, cashed up bogans buying plasma televisions, anyone buying anything – whatever it is, they’re against it.

There is no force in parliament willing to embrace the benefits of population growth and immigration – historically, the two key drivers of Australia’s success.

It’s Kevin Rudd’s fault. In October he admitted publically what most Australian governments have believed for the last century – he believes in a “big Australia” and he “makes no apologies for that”. Since then, we’ve had six months of apologies.

Certainly, immigration itself presents policy challenges. But not that many. Australia isn’t a target for welfare-shopping: migrants can’t get the dole for their first two years.

And I’d be more concerned about the cultural challenges of immigration if we hadn’t had two hundred years of successful pot melting. Each migrant cohort is always more “different” than the last. And each cohort has successfully integrated into Australian society.

But when a politician expresses concern about population pressure, it is typically nothing more than a cover for government failure.

Take infrastructure. Will governments be able to supply enough roads and railways and community services for an expanding population? Well, that’s their job. To abrogate that responsibility is to admit that they are inept. They’ll have the money: more people means more taxpayers.

Or our high house prices, which are now being blamed on migrants and foreign investors. According to opposition housing spokesman Kevin Andrews, speaking to The Australian last week, his constituents are “saying their kids can’t get into the market because they go to auctions and are outbid every time by foreigners”.

Andrews was a former immigration minister (you might remember that) so clearly he’s playing to his favoured side. Nevertheless, Assistant Treasurer Nick Sherry has announced a “new enforcement crackdown” on non-residents buying houses.

House prices are inflated for a very simple reason: governments are choking land supply by restricting housing development at the edges of our cities. When demand increases but supply is limited, prices go up.

That’s the fault of those politicians now so concerned about population. Bob Carr is one of the most passionate advocates of population restraint. And his government was deeply reluctant to release land for housing.

So the idea that we don’t know where all these extra Australians will live is very peculiar. We’ve been expanding for two hundred years, and we haven’t run out of space to build houses.

Critics of immigration and population expansion present their views as brave contrarianism – they are the only ones willing to talk about the elephant in the room.

For such “straight talkers”, their case against population growth requires some awkward moral contortions.

Take the claim made by Bob Brown earlier this month: “skilled migrants, by the way, if left in their own countries, would help raise standards of living there”. This is the “brain-drain” thesis – that when the most educated poor people leave their home countries, they further impoverish the developing world.

But it should go without saying the major problem in the developing world isn’t they don’t have enough skills. It’s that they are underdeveloped. They’re poor.

Brown is telling people in poor countries they cannot seek to improve their lives, and the lives of their family.

That’s cruelty dressed up as kindness.

Well, it’s actually worse. Migrant workers send money to their relatives back home. These remittances add up to more than the world’s foreign aid budgets combined. And, unlike foreign aid, rather being funneled to governments, or distributed according to the preferences of first world donors, remittances go straight to the people who can use the money best.

So limiting skilled migration and chocking off remittances would add to third world poverty.

Migrants to Australia seek better lives than the rest of the world can provide. That should be flattering. They should not be used as scapegoats for the policy failures of our own governments.