INTEGRATED APPROACHES TO SUSTAINABLE DEVELOPMENT PRACTICE

Policy Coherence: Migration, Trade, Aid, and Development

Milena Novy-Marx, Ph.D.John D. and Catherine T. MacArthur Foundation

February 26, 2008

Overview

1. Impacts of Trade and Migration on Development

2. Policy Coherence: Why it Matters 3. Examples of Incoherence

United Kingdom and Migration of Health Workers Philippines Agricultural policy in wealthy countries US, Mexico, and North American Free Trade Agreement

4. Solutions UK Commonwealth Code of Practice Global Forum for Migration and Development

5. Conclusion6. Discussion Questions

Impacts of Trade on Development

Presumption that freer trade promotes economic growth and development Comparative Advantage Increased efficiency

Freer trade will not promote growth absent basic founding conditions Market imperfections in poorest countries Lack of basic infrastructure, credit markets Undeveloped human resources, disease

burden, low agricultural productivity

Migration and Development

Worldwide: 200 million international migrants or 3% of global population

Increasing complexity of migration Half of all migrants are women Wage and demographic and imbalances

between “North” and “South” create push and pull factors

Paradigm shift to potential positive impacts of migration on development

Lack of international regime for managing movement of people, protecting migrants’ rights

Impacts in Countries of Origin Remittances totaled $206 billion in 2006

Foreign Direct Investment

Development Aid

Private Debt and Portfolio Equity

Impacts in Countries of Origin and Destination Countries of Origin

Remittances – poverty reduction Release pressure on local labor markets Brain Drain Diaspora: Transfers of Knowledge, Investment,

Skills, Contacts, Philanthropy Countries of Destination

Supply of needed labor (high and low-skilled) Tax revenue Multicultural vitality Migrants vulnerable to abuse

Trade and Migration

Differences and Similarities between flows of goods and people

Complexity of migration due to human dimension

Gains from trade and migration are not evenly distributed

Policy Coherence: Why?

Policy Coherence is the systematic promotion of mutually reinforcing policy actions by governments

Policies on trade, aid, development and migration can be complements

Yet often countries’ policies work at cross purposes

Examples of policy incoherence: United Kingdom’s (UK) health workforce Philippines Developed countries’ agricultural policy US and the North American Free Trade Agreement

(NAFTA)

United Kingdom: Health Workers UK: Migration policy recruits Malawian

nurses UK’s aid agency provides aid to Malawi’s

health sector $120 million in 2004, $34 million for health

in 2005 Recruitment from other low-income

countries (Africa)

Countries with critical health worker shortages

Eventually ethical guidelines established for

recruitment by national health system

Philippines

Promoting emigration of doctors and nurses leads to a domestic shortage in health workers

Emigration as national development strategy has compromised some development outcomes Decline in health standards Dependence on remittance/migration

model

Developed countries’ agriculture, trade, and aid policies Organization for Economic Cooperation and

Development (OECD) development assistance promotes trade and agriculture

Agriculture a key sector for many low-income countries

Yet OECD domestic agriculture and trade policies work at cross-purposes to these goals Subsidies for agricultural production Tariffs on agricultural goods from low-income

countries Increase in non-tariff barriers

US and Mexico: North American Free Trade Agreement (NAFTA) US increased border enforcement to cut

migration while the free trade pact increased it

NAFTA does not address migration, subsidies

NAFTA raised pressure for migration to US Dislocation of farmers In short-term, freer trade increases

migration In long-term, trade and migration may be

substitutes

Migration Hump

Source: Philip Martin, “NAFTA and Mexico-US Migration,” 2005.

A Policy Solution: United Kingdom Commonwealth Code of Practice

Restricts recruitment by national health service Innovative arrangements: hospital twinnings,

training Malawi

UK increases aid to country’s health sector for more training, higher salaries

Migration of nurses to the UK declines Challenges:

Balancing right to move with health needs of poorest

Recruitment continues by private sector

Global Forum on Migration and Development Nascent effort to coordinate policies on

migration and development within and between countries

Inter-governmental and civil society meetings to exchange information and best practices Non-binding Governments establish focal points

within Ministries Next Forum in Manila October 2008

Policy Recommendations

Governments should: Establish focal points or departments in Ministries Develop formal consultations between

Ministries/agencies Developing national policies/plans for coherence Incorporate migration and trade in Poverty Reduction

Strategy Papers (PRSPs) Improve international coordination

Many challenges remain: Political commitment Policy goals often unclear Effective government institutions and administration Financial and human resources Private sector can complement or work against

coherence

Conclusion

Better coordinated policies on aid, migration and trade can be complementary, creating synergies for development

Challenges to implementation

Discussion Questions What are examples of policy incoherence in your

country? Has policy coherence improved in any areas? Is policy coherence primarily an issue for developed

countries? What lessons can be drawn from the cases

discussed? How should development be defined and measured?

By the well being of individuals from a country, regardless of residence? Or by per capita income of those remaining in-country?

Should individuals have the right to migrate?

INTEGRATED APPROACHES TO SUSTAINABLE DEVELOPMENT PRACTICE

Policy Coherence: Migration, Trade, Aid and Development Lecture

Milena Novy-Marx