The new migration

Yesterday, I was at a conference put on by the Foundation for Development Cooperation. I was talking about Tobin taxes and emissions trading, but the really interesting development for me was one that came up after the speech given by Kevin Rudd, and was also mentioned at the Pacific Forum last week.

This was the idea that the only way to resolve the problems of the Pacific is to allow access for citizens of Pacific island states to the Australian and New Zealand labour markets. Howard said something along these lines last week, and Rudd promised a more substantial review, which would of course, involve negotiation with the ACTU.

I’ve long held the view that traditional models of economic development were unlikely to work in the islands. If we disregard the fact that these are sovereign countries, and look at the actual economics, they look a lot like Australian country towns. In the absence of barriers to migration, you’d expect to see young people going to the city to work, though perhaps returning home at some later point. In this context, for “the city” read Australia and New Zealand.

There’s a sense in which this is the Pacific solution, operating in reverse. Having bribed and bullied our neighbours into acting as detention centres for our unwanted visitors, we’re now in a much weaker position to put them outside the fence that says “We will decide who comes here, and under what circumstances”. So perhaps some good will come of the whole sorry process.

An asideAlthough it’s not strictly relevant, I thought I’d observe that the family reunion category of migration, much criticised in commentary on migration policy, now consists primarily of the spouses of Australian citizens (at least, this is what Deirdre Macken said in Saturday’s Fin). Certainly there are quite a few cases of this kind among my immediate acquaintance and extended family, and they give the lie to the “mail-order bride” stereotype that will undoubtedly be invoked. This is worth thinking about, and I will have some more to say about it sometime.

4 thoughts on “The new migration

  1. I think that the view that you are putting that emigrations disadvantage source countries does not rely on a new view of development or the fact that source countries are country towns. In fact it is consistent with the standard economic theory of immigration traceable back to Berry and Soligo, and arguably to Adam Smith with his views on population.

    Immigration provides more options for trade in a destination country and average gains to the people who were already there — they can trade more, make love more and generally interact with a broader range of individuals. The immigrants one can assume are better off (unless they misjudge the situation and make a bad move) so the destination country gains overall.

    Those remaining in the source country after the migration lose what the other country gains. With the emigration there are reduced options to trade and reduced possibilities for enjoying social interactions among those remaining so they are worse-off with the departures.

    One has a standard argument that if the welfare of the immigrants is averaged with the welfare of the non-emigrants that the source country is better-off but I think this depends on one’s welfare calculus rather than view of the structure of the source economy. For example if there are wage (or other) rigidities in both countries, and social welfare dependencies in each, then a labour immigration improves the welfare of the source country but worsens it in the destination country.

    Provided the ‘unwanted visitors’ to the Pacific islands are reasonable people who could work there rather than be prisoners (perhaps a big if) and interact in the islands with local people the same argument holds. Allowing them entry to Australia would improve Australia’s welfare and worsen that of the island communities.

  2. The senate foreign affairs committee handed down a report last August which called for a Pacific union including guestworker visas, although they do not seem to have thought through any institutional structure beyond putting Australians in charge of everything.

  3. Professor Wadan Narsey gave an excellent lecture on the subject last month at the Remittances, Microfinance And Technology Workshop (hosted by UQ’s School of Economics I believe).

    His paper can be found here in Word format:
    http://www.uq.edu.au/economics/?page=19571&pid=14910
    I’m going through his work examining it for ideas on a general South Pacific political union at my blog:
    http://southpacifica.blogspot.com/
    Here’s a taste of what Professor Narsey said:

    It is vital therefore that the PICs [Pacific Island Countries] examine whether they should currently be entering into dialogue, not just with the EU over the EPAs, but also with Australia and NZ on the specific programmes of development co-operation that will result in enhanced levels of investment (both domestic and foreign) and higher rates of sustainable economic growth, retention of skilled persons in the PICs, the fostering of regulated access of PIC unskilled labour to the labour markets of Australia and NZ, and the fostering of remittances back to PICs. These specific benefits do not require formal economic and political union. But if there was progress on these key fronts, the logical consequence a decade or so down, would in all probability be the formal economic and political union. In the meantime, the PICs would also be able to enjoy major development benefits associated with remittances, which the data below shows to have become extremely significant in the macro-economy of Fiji, a country not typically associated with remittances.

    Professor Narsey also spoke at yesterday’s conference though I have not seen his comments online yet.

  4. In view of george smith’s success with the wallabies I must oppose this guest worker nonsense.
    His parents should never have been able to emigrate to this country,NZ would have been much more suited as a polynesian destination.
    Oh and that fijian fellow tiuquiri,keep them out I say as an all black fan.

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