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October 2012, Volume 19, Number 4
Global: Jobs, GFMD
The World Bank considers people to be poor if they have an income of $1.25 a day or less. The number of poor people so defined fell from 1.9 billion in 1981 to 1.3 billion in 2008, or from 52 percent of the world's people to 22 percent.
A key reason for declining poverty is the creation of private-sector jobs, the theme of the World Bank's 2012 development report. China provides an example of rapid increases in private-sector jobs and declining poverty. There were two million private-sector jobs in 1981 and 80 million jobs in state-owned enterprises. By 2001, the number of private-sector jobs, 75 million, surpassed the number of jobs in state-owned enterprises, 74 million.
The report emphasized the challenge of job creation. There are about 200 million unemployed workers and 620 million young people who are not in school or looking for jobs. Economic growth creates jobs, but jobs and the wages they generate can speed up growth. The report noted that some of the North African and Middle Eastern countries experiencing protests in recent years have mostly public-sector jobs.
The World Bank report said that some kinds of jobs have more development impacts than others. For example, women working for wages tend to raise family income and change decision-making in families in ways that increase expenditures on health and education. Jobs in firms created by foreign direct investment often raise productivity through knowledge spillovers. The report noted the trade off between labor policies that promote job creation and those that protect vulnerable workers.
Most poor people, about 80 percent, live in middle-income countries with a gross national income per head of between $1,000 and $12,500, reflecting inequitable growth in countries such as China and India. Should the donors who provide foreign aid try to get governments in these middle-income countries to change their policies and make them pro-poor?
Many of the world's poor, about 200 million, are in MIFFS, middle-income fragile or failed states, including Iraq, Nigeria, Pakistan and Yemen. One question is whether donors could help to improve governance and stability to accelerate the reduction of poverty in MIFFS.
GFMD. The UN held a high-level dialogue on migration and development in September 2006 that resulted in the creation of the Global Forum on Migration and Development, an informal state-led consultative process, and the Global Migration Group, which brings together the heads of 15 UN agencies with migration responsibilities and the International Organization for Migration.
The UN is planning another high-level dialogue on migration and development in September 2013 centered on four themes: maximizing the contribution of migration to development in migrant-sending areas, including or mainstreaming migration into development planning, reducing irregular migration and trafficking, and enhancing intra- and inter-governmental cooperation on migration and development.
The 2013 dialogue is prompting many of the agencies represented in the GMG to assess their migration programs. Most assessments begin with the fact that the number of international migrants more than doubled in the past quarter century to 214 million in 2010, that half of these migrants are in the labor force of destination countries, and that remittances to developing countries tripled between 2000 and 2011 to almost $375 billion.
ILO emphasized that most migrants are in industrial countries, where they are an average 10 percent of workers, but migration between one developing country and another is rising fast, as from Indonesia to Malaysia. Much of this south-south migration does not occur under government-to-government agreements, as with European guest worker programs of the 1960s. This market-based migration often involves high recruitment costs that are paid by workers, making them vulnerable to exploitation abroad and reducing remittances.
Problems with market-led labor migration are widely recognized, but have proven difficult to deal with effectively. Most governments have unilateral guest worker programs, meaning that employers who satisfy local recruitment, wage, and other obligations can recruit foreign workers anywhere. There is increasing government discussion and cooperation to deal with problems related to unscrupulous recruiters and employers and unauthorized migration, social security and credentials recognition, and ensuring that migration promotes development. However, most governments believe that more must be done to ensure that migration provides win-win outcomes for all parties involved.
IOM emphasized that underdevelopment can encourage out-migration, and that the brain drain embodied in out-migration can retard development. However, out-migration can also speed up development via the 3 R's of recruitment, remittances, and returns, as risk takers go abroad, earn and remit money, and return temporarily or permanently with new ideas that speed development. Both low- and high-skilled migrants can speed development in their areas of origin.
With labor migration potentially generating win- win-win outcomes for migrants as well as sending and receiving nations, how can it be better organized to maximize benefits and reduce both costs and resistance to outsiders?
Migration remains a side rather than a central issue in global development planning despite the GFMD for reasons that range from lack of comparable data to the lack of a central focal point in governments to deal with migration. In order to raise migration higher on the global development agenda, many agencies want to emphasize migration's potential to speed up development.
The GFMD plans its sixth forum in Mauritius in November 2012, the last forum before the UN's High-Level Dialogue on Migration and Development in 2013. The theme, enhancing the human development of migrants and their contribution to the development of communities and states, is to be explored in three roundtables, circulating labor for inclusive development, factoring immigration into development planning, and managing migration.
There are sub-themes within each roundtable. For example, circulating labor includes skills development and recognition, as when destination-country employers support skills development in migrant-sending countries. The hope is that migrants acquire additional skills abroad and these additional skills are then recognized on return. Another sub theme is disapora-led development, as when nationals abroad invest at home, including in public-private partnerships.
Financial Flows. Remittances to developing countries were $372 billion in 2011. By comparison, the UN Office of Drugs and Crime estimated that the international drug trade generated $380 billion (2008). According to UNODC, less than two percent of drug revenue goes to farmers, such as those who produce coca leaf for cocaine, and 13 percent goes to the traffickers who move drugs over borders, so that 85 percent of the $35 billion in annual US cocaine revenues goes to US distributors. Drug money is often laundered in cash-intensive businesses such as pawn shops and restaurants.
UNODC estimates that global revenues of crime are $870 billion a year. By comparison, world trade is $18 trillion a year, and about $4 trillion a day is traded on global currency markets.
Tourism. The OECD, noting that its 34-member countries accounted for two-thirds of international tourist arrivals in 2010 (half went to EU member countries), urged three reforms. Whole-government approaches to promoting tourism, better measures of tourism's impacts, and more skilled workers. The OECD noted that "The seasonal and cyclical nature of the tourism industry makes the option of migrant workers an attractive one for many employers, as they can expand and contract their workforce as demand fluctuates."
There are 235 million workers employed in the global hotel industry, including many migrants. Migrants dominate hotel work forces in the Middle East and are often hired to fill seasonal jobs in other regions. In the Middle East, migrants from richer countries tend to work in managerial jobs, while those from poorer countries work in low-level jobs.