New report says migrant arrivals in Europe good for global economy

At a time when the world economy is struggling to fully recover from the effects of the 2008 financial crisis, economic growth could do with a booster and African and Asian refugees and migrant arrivals in Europe could be the unlikely solution. The rather ironical proposal is contained in the 2015/2016 Global Monitoring Report, a joint effort of the World Bank and the International Monetary Fund (IMF) that was released yesterday in the Peruvian capital Lima which is hosting the two institutions’ annual meetings for 2015. According to the report, the current large scale arrivals of migrants and refugees from Africa and the Middle East to Europe will continue for the next decades as a result of major population shifts in countries. Dubbed ‘Development Goals in an Era of Demographic Change,’ the report says the world is undergoing a major population shift from poor countries to richer regions of the world, a trend that is predicated to become a permanent feature of the global economy. While the trend presents major challenges for recipient countries, the report argues that it is also likely to reshape global economic development for future decades and offers a path to ‘ending extreme poverty and shared prosperity’ if the right evidence-based policies are put in place nationally and internationally. Such predictions are based on the current global demographics that indicate the share of world population that is working age has peaked at 66 per cent and are now on the decline. “World population growth is expected to slow to 1 per cent from more than 2 per cent in the 1960s; the elderly population is anticipated to almost double, to 16 per cent by 2050, while the that of children is stabilising at 2 billion,” says the report. However, the direction and pace of this global demographic transition, according to the report, varies dramatically from country to country, with differing implications depending on where a nation stands on the spectrum of aging and economic development. Regardless of this diversity, countries at all stages of development can harness demographic transition as a tremendous development opportunity, the report says. World Bank Group President Jim Yong Kim said, with the right policies, this era of demographic change can be an engine of economic growth. “If countries with aging populations can create a path for refugees and migrants to participate in the economy, everyone benefit. Most of the evidence suggests that migrants will work hard and contribute more in taxes than they consume in social services,” said Yong Kim Currently, more than 90 per cent of global poverty is concentrated in lower-income countries with young, fast-growing populations that can expect to see their working-age populations grow significantly. At the same time, more than three-quarters of global growth is generated in higher-income countries with much-lower fertility rates, fewer people of working age, and rising numbers of the elderly. But IMF Managing Director Christine Lagarde thinks that the demographic developments analysed in the report will pose fundamental challenges for policy-makers across the world in the years ahead if the right policies are not advanced. “Whether it is the implications of steadily aging populations, the actions needed to benefit from a demographic dividend, the handling of migration flows – these issues will be at the centre of national policy debates and of the international dialogue on how best to cooperate in handling these pressures,” said Lagarde. Teddy Kaberuka, a Kigali-based independent economic analyst, said in a phone interview he agrees with the report regarding the benefits of immigrants to Europe. However, Kaberuka hastened to add that what’s important at the moment is how recipient countries in Europe respond to the current influx of immigrants and refugees. “There’s a need for quick integration of these people in the populations of the countries where they are going, Europe needs to take responsibility, expedite the process of processing papers for the immigrants so that they can legally be productive in those economies,” said the economist. According to Kaberuka, there’s evidence that African countries are reaping benefits from their populations abroad in form of remittances every year in billions of dollars, the amount of remittances, he said is more than the money received in aid. Remittances by Africans in Diaspora have been linked by some studies to helping reduce poverty among the families of immigrants and related value-chains. But there has been mixed reaction among European countries that are on the receiving end of the latest wave of refugees and immigrant arrivals; while some, such as Germany, have been receptive, others, such as Hungary, have been hostile. However, Kaberuka said Europe should take responsibility also considering that problems in countries such as Syria compelling people to flee were partially, created by western governments. “They must take responsibility,” he said. editorial@newtimes.co.rw

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New report says migrant arrivals in Europe good for global economy