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April 2016, Volume 22, Number 2

Europe and Asia

EU. The European migration crisis turned into three challenges in 2016: slowing the influx, dealing with threats of terrorism, and integrating Arab, African, and Afghan migrants. Over 50,000 migrants a month arrived in Greece from Turkey in 2016, but the influx slowed in 2016. Some 854,000 migrants arrived in Greece in 2015.

EU member states received 1.2 million asylum applicants in 2015, almost double the 626,000 of 2014, led by 1.1 million in Germany and 163,000 in Sweden. About two-thirds arrived in the EU via Greece, often taking small boats from Turkey to nearby Greek islands. Over 3,700 migrants drowned trying to enter Europe via the Mediterranean Sea in 2015, an average of 10 a day.

The EU border agency Frontex reported in January 2016 that 60 percent of the asylum seekers arriving in Europe were from countries that do not produce persons recognized in Europe as in need of asylum. By contrast, UNHCR and IOM say that most arrivals are from Syria, Afghanistan and Iraq, countries from which most asylum seekers are recognized as refugees.

The so-called Balkan route closed in March 2016, when Macedonia refused to allow migrants who had reached Greece to travel further north, leaving 52,000 asylum seekers who wanted to get to Germany stranded. EU Council President Donald Tusk in March 2016 warned migrants in Syria: "Do not come to Europe? It is all for nothing. Greece or any other European country will no longer be a transit country."

Turkey, hosting about 2.7 million of the 4.8 million Syrian refugees in spring 2016, negotiated an agreement with the EU to receive E6 billion in aid by the end of 2018, visa-free travel to Europe for Turkish citizens by summer 2016, and fast-track entry into the EU in exchange for: (1) trying to prevent the outflow of migrants; and (2) accepting the return of migrants who reach Greece.

The UN in March 2016called on the world's countries to accept 480,000 Syrian refugees, 10 percent of the total.

Greece began to process migrants who arrived illegally after March 20, 2016 and return them to Turkey April 4, 2016, where they go to the back of the line for resettlement in Europe. For each migrant returned from Greece to Turkey, the EU will accept one Syrian refugee from Turkish camps who had not tried to reach Greece illegally, up to a maximum 72,000 in 2016.

Greece designated Turkey as a safe-third country. Turkey, which does not apply the 1951 Refugee Convention to non-Europeans, says that all those leaving are economic migrants who have protection in Turkey "equivalent to" that called for by the 1951 Refugee Convention. Turkey grants Syrians a Temporary Protected Status that allows them to work in Turkey, and wants EU support to establish a safe zone for Syrians in Syria. Other nationalities such as Afghanis and Iraqis are not allowed to work in Turkey.

The purpose of the EU-Turkey anti-smuggling plan is to send the message that those who pay smugglers to reach Greece will lose their money and the opportunity to be resettled in Europe. The EU promised Greece an additional E700 million plus judges, translators and equipment to process asylum applications quickly from any migrants who continue to arrive. The EU-Turkey plan slowed the flow of migrants from Turkey to nearby Greek islands from thousands to hundreds a day.

Dublin. The Dublin Regulation requires asylum seekers to register in the first EU country they reach. This first-EU country is to make a decision on whether a person needs asylum that is binding on all other EU countries. The 2015 mass migration showed one Dublin flaw. With Greece unable to register migrants arriving from Turkey, many passed through and registered in Germany.

The EU Commission in April 2016 outlined two options. The first would keep the first-country rule in place but add a "corrective fairness mechanism" to assist front-line states and redistribute large flows, as with the plan to redistribute 160,000 Syrian refugees from Greece to other EU member states.

The second would make the place where an asylum seeker entered the EU irrelevant and use a formula to distribute asylum seekers among EU member states based on their population and capacity to absorb migrants. As migrants apply for asylum, they would be allocated to countries who would consider their applications.

Some want the Commission to go further and develop an EU asylum corps to consider applications for asylum in order to reduce the wide variance in the share of asylum seekers from particular countries who are recognized as in need of protection in different EU countries. There are proposals to standardize asylum procedures, to grant temporary protection rather than permanent status, and to withdraw protection if the migrant leaves the EU country that granted her protection.

Opinion. Opinion in many EU countries is polarizing between those who believe that European countries should welcome all people in need of protection, such as German Chancellor Angela Merkel, and those who believe that Europe should limit migration with quotas, such as Bavarian Premier Horst Seehofer.

Before changes in 2016, the Schengen area allowed border-free travel between 26 European countries. Sweden re-introduced border checks for arrivals from Denmark on January 4, 2016, prompting Denmark to follow suit on its border with Germany. Austria in January 2016 limited the number of foreigners who can apply for asylum to 37,500 in 2016, down from 90,000 in 2015.

The continued influx of asylum seekers could end the Schengen free movement agreement, named for the city in Luxembourg where in 1995 most EU countries agreed to eliminate internal border checks and to create common visa issuance procedures and a database to check arrivals. Schengen made the EU more visible to Europeans and foreigners, as border checks between countries were eliminated.

Denmark enacted a law in January 2016 allowing authorities to seize cash and goods from asylum seekers worth more than $1,500 to help pay for their stay in Denmark (Denmark received 21,000 asylum applications in 2015). Switzerland takes assets worth more than $1,000 from asylum seekers who receive housing and food, and German states can take assets carried by asylum seekers worth more than a certain amount, such as $800 in Bavaria.

In spring 2016, "thousands" of Iraqis from Bagdad and other areas not controlled by ISIS were reportedly returning to Iraq from Turkey after learning that they would not be given houses and jobs in Europe. During the Fall 2015 mass movement from Turkey to Germany, photos of Germans welcoming migrants and smugglers who told migrants of the benefits available in Europe encouraged outmigration.

The next challenge in Europe is to integrate the migrants who arrived in 2015 and stayed. The unemployment rate in the 19-nation Euro zone was 10.5 percent at the end of 2015, twice the US rate.

The 2015 influx of migrants could speed changes in European politics. Some say that center-left parties primarily represent public-sector workers, while center-right parties represent big business and finance, leaving many people unrepresented by traditional parties. They turn to far-right and far-left parties that often campaign on anti-EU platforms, arguing that important decisions affecting people's lives are being made in far-away Brussels by unaccountable bureaucrats. Far-right parties often campaign for fewer migrants and especially fewer Muslims.

Britain. Britain finances unemployment insurance benefits from general taxes and grants benefits to most job seekers. Under EU freedom of movement rules, EU nationals can move to the UK and receive UI benefits if they cannot find jobs.

As part of its re-negotiation with the EU, the UK won approval to invoke an "emergency brake" to allow the government to withhold welfare benefits such as wage subsidies from non-British EU nationals for up to four years if too many arrive, and to reduce child benefits for Poles and others in the EU whose children are not with them to home-country levels.

Beginning in April 2016, all workers 25 and older in the UK are to be paid at least L7.20 or $10.30 an hour, higher than the minimum wage in most of the 22 EU countries with a minimum wage. Britain's high minimum wage may encourage more Eastern Europeans to move to the UK.

Britain will hold a referendum on June 23, 2016 on whether to remain an EU member. One issue is immigration, specifically, whether there are "too many" Poles and other Eastern Europeans in the UK. Boston, a city of 67,000 in the northeast, had a six-fold increase in foreign-born residents between 2001 and 2011 to fill farm and food-related jobs. Boston-area farm jobs pay about L6.20 an hour.

A 40-year old Sudanese man, Abdul Rahman Haroun, walked the 31-mile Channel Tunnel from France to England in 11 hours in August 2015 and was granted asylum in December 2015. He faces charges for obstructing a railroad engine.

France. A study released in January 2016 concluded that the children of immigrants raised in France consider themselves to be French, but many French citizens do not consider this second generation to be French. About 20 percent of the 20- to 60-year olds in France in 2008-09 were immigrants or their children, and the study found that the second-generation often has higher levels of unemployment than the first.

Philosopher Alain Finkielkraut, inducted into the Academie Francaise in 2016, says much of Islam is not compatible with French culture. After the terrorist attacks in Paris in November 2015, Finkielkraut called Muslim immigrants a threat, and said that the quality of French schools was declining because of attempts to be multicultural.

French workers have been mounting general strikes about once a month in 2016 to protest efforts to reduce protections in French labor law. The unemployment rate is 10 percent, and 30 percent for those 15 to 24. President Francois Hollande appears unlikely to meet his 2011 pledge to reduce these rates significantly before elections expected in 2017. Hollande's proposal to take away French citizenship from convicted terrorists with a second nationality was blocked in March 2016.

Germany. Almost 1.1 million foreigners seeking asylum were registered in Germany in 2015, including 428,000 Syrians, 154,000 Afghanis, 122,000 Iraqis, and 69,000 Kosovars. Almost 70 percent were men, and the largest single group were 19- to 24-years old.

Entries into Germany's EASY system slowed in 2016. Some 170,000 foreigners were registered in the first quarter of 2016, down from 500,000 in the first quarter of 2015.

Only 476,600 of those who arrived in 2015 were able to apply for asylum, up from 203,000 in 2014. Of those who applied for asylum in 2015: 36 percent were Syrian; 12 percent were Albanian; eight percent were Kosovars; and seven percent each were Afghanis and Iraqis.

Germany's asylum agency made 283,000 decisions in asylum cases in 2015, granting asylum to 48 percent of applicants and temporary protected status to another 1.3 percent. The half of applicants recognized as in need of protection get three-year work and residence permits that can be renewed, but cannot have family members join them for two years.

Chancellor Angela Merkel on August 31, 2015 welcomed Syrians, saying "wir schaffen das," meaning that Germany can integrate Syrians fleeing the civil war in their country. The result was a mass migration from camps in Turkey near the Syrian border via Greek islands and then via the Balkans to Germany, a so-called gold rush moment. On September 12, 2015, over 12,000 foreigners arrived in Munich.

By the end of 2015, the welcoming mood changed. Over 750 women reported being assaulted on New Year's Eve near Cologne's main train station by young men, many of whom were Moroccans. The Cologne attacks brought a major shift in public opinion, with many Germans emphasizing the need for migrants to respect German cultural norms.

There were several responses to the attacks. Algeria, Morocco and Tunisia, along with the Balkans, were deemed safe countries, making it harder for citizens of these countries to obtain asylum in Germany. German law was changed to allow the deportation of those seeking or granted asylum who are sentenced to a year or more in prison for a crime in Germany such as bodily harm, violent theft and serial shoplifting, down from three years.

Germany deported over 18,400 foreigners in 2015, up from 10,900 in 2014. However, many migrants destroy their passports and other IDs, and many countries will not accept the return of persons without proof that they are citizens.

Some German politicians called for ceilings or quotas on the number of asylum seekers accepted. Merkel, who has been PM since 2005, resisted the call for quotas, asking what to do with the next person seeking refuge after the quota has been filled. However, her coalition party CSU and several CDU ministers openly questioned Merkel's resistance to quotas, arguing that perceptions that migration is out of control could lead to a backlash that reduces votes for the CDU and eventually a backlash that erodes protections for migrants.

Criticism of Merkel contributed to the defeat of her CDU party in state elections March 13, 2016. Critics on the right wanted quotas on migrants, while critics on the left opposed concessions to Turkey, which is using the refugee crisis to crack down on the press and separatist Kurds. The anti-immigrant Alternative for Germany party won over 10 percent of the vote in two ex-West German states and over 20 percent in an ex-East German state.

Many Syrians sold their assets in Syria to pay smugglers to get to Germany, only to learn that they likely face months in emergency camps and a need to learn German before they can find the higher-wage jobs they expected. Asylum seekers can normally work in Germany after three months if Germans or EU citizens are not available to fill vacant jobs.

Apart from the asylum seekers, some 1.5 million other migrants arrived in Germany in 2014, many from poorer EU member states such as Poland and Romania. Many migrants also left Germany, but net migration was 550,000, the highest since 1992.

The first surveys suggest that integrating the Syrian and other migrants arriving in 2015 will not be easy. There were a million job vacancies in Germany in spring 2016, but 85 percent were for skilled workers, while only a third of asylum applicants have the requisite skills. Germany has a famed vocational dual or work-and-learn training system that is seeking apprentices, but being an apprentice in a bakery or beauty shop usually requires some German language skills.

Proposals to allow employers to pay newcomers less than the minimum wage of E8.50 ($9.45) an hour are opposed by unions.

Greece. In Spring 2016, it appeared that Greece would become the final destination for more asylum seekers after Macedonia closed its borders. Greece received only 11,400 first-time asylum applications in 2015, largely because most asylum seekers passed through Greece en route to Germany, Sweden and other countries. There were 52,000 migrants in Greece in March 2016 when new arrivals began to be returned to Turkey.

Greece is perhaps the EU country least capable of integrating migrants. The overall unemployment rate is 25 percent, and the rate for those ages 15-24 exceeds 50 percent. As migrants continued to pour into Greece from Turkey, the EU maintained pressure on Greece to reform its economy to become more competitive.

Greece's pension system is almost bankrupt, a legacy of policies that allowed workers to retire after 35 years of work with full pensions, compared to 45 years in Germany. Wages in Germany are almost twice those of Greece, but Greek state pensions are about the same as German pensions.

Turkey. Turkey hosts 60 percent of the Syrians who have left their country. The EU promised Turkey E6 billion by the end of 2018 to care for refugees (Turkey said it spent over E9 billion on Syrian refugees by the end of 2015), visa-free travel for Turks to EU countries, and faster accession negotiations to join the EU.

Turkey has been dominated by now-President Recep Tayyip Erdogan for the past decade. Erdogan is widely condemned by many human rights groups for reviving a military campaign against Kurdish militants in the southeast, which has led to terrorist bombings in Ankara and Istanbul that have scared off tourists.

In January 2016, a Syrian suicide bomber killed foreigners in the tourist center of Istanbul, threatening Turkey's $30 billion a year tourism industry. The 5.4 million German tourists a year are a sixth of the foreign visitors to Turkey. Istanbul is the third most popular city for tourists in Europe, after Paris and London.

Russia. Russia's economy is dependent on exports of oil and gas. With oil prices falling, the ruble fell in value and the economy shrank, reducing the demand for migrant workers. The number of Tajik migrants in Russia fell from 1.2 million in January 2015 to 860,000 a year later, down almost 30 percent. Typical migrant wages in Russia fell from $700 to $400 a month.

China. There were 270 million internal migrants in March 2016, when the government changed its policies and urged migrants to buy homes in the cities where they work to absorb some of the excess housing stock. Local developers hired migrants to build vast apartment blocks that are often empty, and the housing glut threatens to slow economic growth.

The government reported over 450 million square meters (a square meter is about 11 square feet) of unsold residential housing in 2015, double the vacant housing of 2011.

Many provincial cities are making it easier for migrants to obtain urban hukous or residence permits if they buy housing. Previously, it was difficult for rural residents to obtain urban hukous, and many did not want to risk loss of their farm land by giving up their rural hukous.

China's population of 1.35 billion is declining, to a projected one billion in 2060. Despite government relaxations on births in 2013, the total fertility rate has continued to decline to 1.25 in 2015.

China's slowing economy has prompted some firms to reduce or withhold wages in a bid to stay afloat, leading to strikes and labor unrest. There were 2,700 strikes and protests in 2015, double the number in 2014, and over 500 in January 2016. The government plans to force state-owned coal, steel and other enterprises to reduce production and lay off workers, which could displace three million workers. Some foreign-owned firms in Guangdong, the hub of toy, shoe and apparel manufacturing, have closed and left for Vietnam without making required severance payments.

Slowing growth in China has impacts within the country, as some rural-urban migrants return to their rural villages, and abroad; African countries such as Nigeria and South Africa also export less oil and other commodities to China. African currencies are falling, which makes it harder for them to import goods and repay China for infrastructure projects. African countries that are less reliant on exporting commodities, such as Ethiopia and Kenya, may fare better than those that depend more on commodity exports such as Zambia.

How does US trade with China affect the US labor market? Economists argue that freer trade is akin to a rising tide that lifts all boats, increasing incomes in trading countries enough so that the winning people in trading economies can compensate those who lose jobs and still be better off.

This theory of comparative advantage appears to hold for freer trade between countries at similar levels of per capita income, but may not hold if trade is between richer and poorer countries. US workers displaced by Chinese imports often find it difficult to obtain alternative jobs with similar wages, helping to explain why US unions oppose free-trade agreements.

Japan. Japan's large firms have long offered lifetime employment, instilling loyalty in their employees. However, after the bubble economy burst in the 1990s, many large firms began to hire youth as contract workers who could easily be laid off.

Today, there is a significant age gap, with many older workers in major firms guaranteed lifetime employment while youth go from one temporary jobs to the next. Lower earnings and lack of security have been blamed for everything from children living with their parents into their 30s to Japan's low birth rate. Almost 40 percent of all Japanese workers today are considered "non-regular."

Almost 20 million foreign tourists arrived in Japan in 2015, including five million from China and four million each from South Korea and Taiwan. As recently as 2000, Japan received only five million foreign tourists.

Malaysia. Bangladesh and Malaysia agreed on February 8, 2016 to permit up to 1.5 million Bangladeshis to work in Malaysia under a G-to-G program. Some Malaysian NGOs question the plan, noting that there are already 20,000 Bangladeshis in detention in Malaysia. Many became illegal after leaving their employers. Malaysia began a regularization exercise in February 2016.

There are 1.5 million Bangladeshis in Malaysia and 11 High Commission staff to assist them.

Bangladesh and Malaysia signed an MOU in November 2012 to remove private recruiters from labor migration in both countries. Malaysian employers submit their requests for Bangladeshi workers to a government office, which transmits approved requests to a Bangladeshi government agency. Some 1.4 million Bangladeshis registered for 10,000 jobs in 2013-14, and 7,600 were employed in Malaysia in June 2015.

Australia. The High Court in February 2016 ruled that the government could lawfully transfer asylum seekers to offshore detention centers in Nauru. The government does not allow migrants arriving by boat to settle in Australia, and the case involved 267 migrants who were sent to Nauru, were returned to Australia for medical treatment, and sued to prevent their return to Nauru. The High Court's decision means that they can be returned to Nauru after being treated.


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