October 2023, Volume 29, Number 4
The foreign-born share of the population is about 15 percent in the US and many European countries, including France, Spain and the UK. In almost all industrial countries, the share of foreign-born residents was low in the 1960s, began to rise in the 1970s and 1980s, and rose faster in the 21st century. In Europe, 12 percent of residents are foreign-born.
Many countries have admissionist or open-borders coalitions that include employers who hire migrants and leftists who want diversify the population with migrants from poor countries that they believe were impoverished in colonial times. Most US labor and civil-rights leaders opposed large-scale immigration during the 1960s and 1970s, fearing that new arrivals could detract from helping US minorities, but today’s union and civil rights leaders are mostly admissionist.
Migration restrictionists often want to preserve cultures that developed over centuries. Some fear that newcomers will compete with natives or not integrate successfully into the workforce, adding to the cost of the welfare state rather than relieving pressure on welfare financing in aging societies by adding workers and taxpayers.
An unwillingness or inability of mainstream parties to reduce immigration has fueled populist parties in Denmark, Finland, France, Germany, Italy, Spain and Sweden. The governing coalition in the Netherlands collapsed in July 2023 when the PM’s plan to reduce immigration drew objections from an admissionist party that withdrew from the coalition.
The EU is likely to receive over a million asylum applications in 2023 and there is a more restrictionist reaction than there was to a similar level of asylees in 2015. The most common response is to push EU borders out, which involves paying the governments of Libya, Turkey, and Tunisia to care for migrants and discourage them from leaving for Europe.
Britain. The UK government discourages asylum seekers from using small boats to cross the English Channel from France by trying to send them to Rwanda to apply for asylum and to begin new lives there if they were recognized as refugees. The UK has provided Rwanda with $180 million in development funding, but no asylum seekers were sent as of September 2023 because a court held that Rwanda is not a “safe third county.” This decision is under appeal.
Over 2,000 boat people a month arrived in the UK in the first half of 2023. There were over 74,000 asylum cases pending in May 2023, and NGOs say that three-fourths of applicants are likely to be recognized as in need of protection. Some 50,000 migrants awaiting decisions were being housed in hotels in summer 2023 at a cost of $7.5 million a day.
UK Home Secretary Suella Braverman in September 2023 called for an end to the individualized treatment of asylum seekers enshrined in the 1951 refugee convention. She said the refugee convention was “devised and intended for a sustainably limited number of bona fide victims of persecution.” Today it is being abused by vast numbers of economic migrants who view requesting asylum as a way to obtain residence in their preferred country.
The 1951 refugee convention dealt with events occurring before January 1, 1951 in Europe and applied to an estimated two million people. A 1967 protocol removed the geographical and time restrictions, obliging signatory countries to offer asylum and refugee status to individuals who have a “well-founded fear of being persecuted [in one’s homeland] for reasons of race, religion, nationality, membership of a particular social group or political opinion.” The US incorporated this language in the 1980 Refugee Act.
Braverman asserted that persecution has been replaced by discrimination as a basis for granting asylum, and that well-founded fear has been replaced by credible fear. She noted that “particular social group” can lend itself to abuse, covering individuals who are gay or subject to domestic violence, making up to 800 million people eligible for asylum in another country.
The UK raised the cap on the number of foreign seasonal farm workers from 30,000 to 45,000 in 2023.
The British government caps the price of tuition for domestic undergraduate students at less than L9,250 a year, similar to the $9,600 tuition at US public universities. Universities say they lose money on British students, encouraging them to enroll foreign students who pay more, up to L25,000.
Some British pubs are adopting surge pricing for pints of lager beer, raising the average price of L4.30 by 20 pence during evenings and weekends.
France. As the French returned to work and school in September 2023, the education minister declared that abayas or full-length robes worn by some Muslims can no longer be worn in schools. The minister voiced the belief that the 1095 laïcité or secularism law requires education to dissolve ethnic or religious identity and create a shared commitment to the rights and responsibilities of French citizenship, and was supported by most French residents.
France banned “ostentatious” religious symbols in middle and high schools in 2004, targeting Muslim head scarves, Catholic crosses and Jewish kipas. Unlike the US focus on freedom of religion, the French government is more concerned with freedom from religion.
Bernard Arnault, CEO of the world’s largest luxury goods group LVMH Moët Hennessy Louis Vuitton with 75 brands sold in 81 countries, briefly became the world’s richest person in 2023 with over $200 billion in assets. Arnault began his career in France by buying a bankrupt textile firm for one franc and retaining only Dior, then taking over LVMH, and buying other luxury goods firms including Tiffany in 2020.
Germany. There were 2.2 million foreigners in Germany at the end of 2022 who arrived from Syria and other countries since 2013 and were given some form of protection. After seven years in Germany, some 62 percent of these newcomers were in the labor force, including 67 percent of the men and 26 percent of the women. About 70 percent of the newcomers were employed full time and 15 percent were employed part-time; others were self-employed or in some kind of paid training.
A far higher share of the asylees were helpers, over 40 percent, compared with less than 10 percent of Germans. Newcomer earnings averaged about E2,000 a month.
Germany has a workforce of 45 million that could shrink to 38 million by 2035 unless more older workers and women work and more immigrants are admitted. The Alternative for Germany party, which has been polling at about 20 percent, wants to return some migrants to their countries of origin. The AfD has surpassed the SPD in most polls, and is now second only to the CDU.
Can Germany’s economy rebound despite war in Europe and tensions with China? Germany has an ambitious program to reduce CO2 emissions, but its chemical and metals industries rely on energy mostly from fossil fuels, making it hard to achieve the goal of obtaining 80 percent of German electricity from renewable sources by 2030.
Germany thrived in a world of free trade as China and other countries bought high-quality manufactured goods such as cars, machine tools and chemicals. China has become a competitor rather than a customer, and Chinese auto manufacturers surpassed German firms that were slow to make the transition to EVs.
Transforming Germany’s industrial base with high energy prices is a daunting challenge. Optimists point to the Mittelstand, small companies often directed by their owners searching for new opportunities, often niche markets where there is little competition. Germany raised business costs in the 1990s to unify the country, but reformed labor and economic policies in the early 2000s to set the stage for a golden decade of growth with high labor force participation and low unemployment.
A third of Germans smoked in mid-2023, up from a quarter before covid in 2020; a quarter of French residents smoke. A cost of an average pack is about $7.25, relatively low among EU countries, and cigarettes are readily available.
Greece. The government in September 2023 announced plans to allow up to 300,000 migrants in the country to work due to employer complaints of labor shortages, especially in agriculture.
The largest wildfire recorded in the EU, over 300 square miles, raged in a national forest in the Evros region of northeastern Greece in August 2023. Drought has made forests more prone to burn. The government has made fire rather than forestry services responsible for managing forests, so little is done to remove fuel.
Heat and wildfires spoiled vacations and caused damage in Greece and other southern European countries in 2023. Temperatures topped 118F in July 2023, forcing some of the attractions that attracted 10 million tourists to close.
Greece’s economy is booming, a turnaround for the sick man of Europe a decade ago, encouraging the government to promise to increase the minimum wage, €780 a month in 2023. Debt is still 165 percent of GDP, and many loans made earlier will have to be written off, but reduced taxes and regulation have re-ignited investment. Unemployment, which topped 30 percent in 2013, is now about 10 percent. Greece’s citizenship-by-investment program offers passports in exchange for a €500,000 in real estate.
Italy. Over 105,000 migrants arrived in southern Italian ports in the first eight months of 2023, double the number who arrived in the same period of 2022. Italy enacted a law in February 2023 that requires migrant rescue ships to sail to the nearest Italian port after each rescue rather than making multiple rescues and then sailing to port with a full ship.
PM Giorgia Meloni, who took power in October 2022, promised to reduce migrant boat arrivals. Her government pledged $1.1 billion to Tunisia in August 2023 to combat migrant smuggling.
Many of the migrants who arrive in Italy move on to Germany and other EU countries. The Italian government estimated that 700,000 of the one million migrants who arrived between 2012 and 2021 moved to other EU countries.
Italian employers complained of labor shortages and requested over 850,000 work visas for non-EU foreigners between 2023 and 2025. PM Meloni promised 425,000 work visas for non-EU nationals.
Russia. After 18 months of war, Ukraine was inching forward in Fall 2023, slowly reclaiming territory seized by Russia. The use of cheap drones has revolutionized warfare, making it very difficult to surprise the enemy. With $300 drones able to identify and disable tanks that cost millions, the new arms race is how to manufacture and deploy cheap drones that can evade enemy detect-and-destroy systems.
One result of the Russia-Ukraine war may be a rethinking of US military doctrine that calls for massive mobilization of heavy weapons, especially if cheap drones can destroy sophisticated tanks and other weapons. Amidst calls for negotiations to end the fighting, some analysts warned that Russian President Vladimir Putin has a history of breaking agreements. US and EU priorities are to weaken Russia, keep NATO united, and avoid WWIII.
Turkey. Many small island nations have citizenship by investment (CBI) programs that offer passports to foreigners who buy real estate or local businesses or invest in government bonds. The cost ranges from $100,000 to $1 million or more, and the price of “golden passports” is influenced by how many countries can be accessed without visas.
Turkey launched its CBI program in 2016 and naturalized over 5,000 investors and family members by 2020. The Turkish government has been naturalizing 1,000 foreigners a month, so that Turkey accounts for a quarter of 50,000 golden passports issued each year. Since 2018, foreigners can invest $250,000 in real Turkish estate or $500,000 in government bonds to qualify for a golden passport. The leading nationalities include citizens of Afghanistan, Egypt, Iraq, Palestine and Russia.
Turkish citizens need visas to enter the EU without visas, but Turks are eligible for long-term multi-entry visas. Turkish citizens can obtain US E-2 visas that provide indefinitely renewable visas to foreigners who invest at least $250,000 in a US business and manage it, such as a motel, and not be liable for US income taxes.
Citizenship by investment schemes began in the Caribbean, and have become important sources of income for small island countries. St Kitts (45,000 people) and Nevis (10,000) launched a CBI program in 1984, and today 40 percent of its GDP comes from selling citizenship. St Kitts was built on sugar, and when that mainstay faded, tourism, but the conversion of long-stay tourists into cruise ship tourism means that a third of people are poor. Belize followed with a CBI program in 1985, and other Caribbean countries followed in the 2000s.
Henley and Partners took over and professionalized the St Kitts CBI program in 2006, standardizing the application process and procedures for evaluating applications, keeping 10 percent of the minimum $250,000 investment required in the Sugar Industry Diversification Fund. Holders of St Kitts passports were allowed to enter the Schengen area for 90 days after 2009, spurring interest in the St Kitts CBI.
Microstates with populations of less than a million have one asset, sovereignty, which allows them to sell citizenship. Former British colonies in the Caribbean were the first to sell citizenship, touting the ability of their citizens to enter the UK and other countries without visas.
China. China’s economy and Chinese exports slowed in 2023 amid falling prices, posing the threat of deflation in the world’s second-largest economy. Much of Chinese household wealth is in housing, and several real estate developers missed payments on loans or defaulted in summer 2023, threatening the finances of local governments that gain revenue from selling land to developers. China’s lightly regulated trust industry, which has $3 trillion in assets and often lends to property developers, may be in trouble.
If China’s economy slows after four decades of fast growth, world economic growth could slow, since China accounted for 40 percent of the world’s additional GDP over the past decade, double the 20 percent US share.
China owes debts that are almost 300 percent of GDP, making China more indebted than the US. Over 60 percent of China’s household savings are invested in real estate, leaving the country with up to 75 million empty apartments. Many Chinese have paid for condos that bankrupt developers may not build.
Chinese households save a high share of their income because the government is reluctant to expand the social safety net. Leader Xi Jinping does not want generous social assistance programs, warning leaders not to “aim too high or go overboard with social security, and steer clear of the idleness-breeding trap of welfarism.” Two-thirds of Chinese live in cities, but many rural-urban migrants remain registered in rural villages in order to retain their right to farmland.
Countries are sometimes seen as rising temporarily above normal economic limits before crashing back to reality. Japan broke through economic constraints during the 1980s bubble economy that was followed by several decades of slow growth and deflation. Germany was praised in the 1990s for its apprenticeship system and medium-size businesses that exported advanced-manufacturing products before stagnating, reviving after labor market reforms, and stagnating again.
China aims to become a high-income country, which the World Bank defines as a per capita income of at least $13,845. China’s per capita income was $12,850 in 2022, compared to $76,400 in the US, about six times more.
China’s aging population, reliance on housing for growth and wealth accumulation, and borrowing for infrastructure development may mark an end to four decades of extraordinary growth. Some 14 million housing units were sold in 2021, and sales are expected to fall below 10 million in 2023. China has 12 million college graduates a year, many of whom cannot find jobs.
China’s total fertility rate was 1.1 in 2022, among the lowest in the world; there were fewer than 10 million births in a country of 1.4 billion. The TFR must be 2.1 to keep a population stable. Hong Kong and South Korea have TFRs below one.
India. India overtook the UK in 2022 to become the world’s fifth largest economy with a GDP of $3.4 trillion or $2,400 per capita. India’s economic growth is held down by bureaucracy, slow employment growth, and low female labor force participation. Less than a quarter of Indian women had wage jobs in 2022, about 38 million, compared to 368 million men.
Australian and New Zealand. ANZ have seasonal worker programs that bring Pacific Island workers into the country to fill farm and related jobs. A record 40,000 PIC migrant workers were in Australia in June 2023, up from 24,400 in May 2022. Over 27,500 PIC migrants were employed in agriculture, followed by 9,100 in meatpacking and less than 1,000 each in hospitality and care.
Queensland had a third of Australia’s farm guest workers, almost 9,000, followed by Victoria with 4,600 and Tasmania with 4,100; two-thirds of PIC migrants were in these three states.
Complaints of exploitation prompted reforms effective July 1, 2024 that require Australian employers to provide 30 hours of work each week to PIC migrants and to guarantee PIC migrants at least A$200 a week after deductions for taxes and housing.
The Australia-US FTA of 2005 created the E-3 visa that allows up to 10,500 Australian college graduates with US jobs to obtain renewable two-year work visas. Sometimes seen as a reward for Australia’s support in the Iraq war, the E-3 visa enables thousands of young Australians to live and work in the US, leading to an estimated 30,000 Australians in New York City and 25,000 in California. Since the 10,500 visas are not used by Australians, some want to open the E-3 visa to Irish college graduates.
Australia will vote in October 2023 on whether to give indigenous Australians a “voice to parliament.” Aboriginal Australians are three percent of residents but a quarter of prison inmates. Alice Springs has the highest share of Aboriginals among residents, and is marked by domestic violence and property theft. Aboriginals won the right to vote in 1962, and there is an indigenous affairs minister, raising questions about the need for a voice to parliament.
Australia expects 2023-24 to be another El Nino year. The 2018-19 El Nino was associated with drought and heatwaves that reduced farm output as well as bushfires and coral bleaching. Australia’s farm exports are likely to fall with reduced farm output and continued disputes with China.
New Zealand has an RSE program that allows employers to recruit PIC migrants to fill seasonal farm jobs. The Big 3 source countries for New Zealand are Samoa, Tonga and Vanuatu, countries that account for three-fourths of all RSE migrants. Of the 11,600 RSE migrants who arrived between July and April 2023, over half were from Vanuatu, followed by a third from Samoa. The cap on RSE arrivals was 12,850 in 2018/19 and 19,000 for 2022/23; arrivals in 2022/23 were about 90 percent of the cap.
Some 48,000 visas were issued under Australia’s PALM (Pacific Australia Labor Mobility) scheme and New Zealand’s RSE (Recognized Seasonal Employer) scheme between July 1, 2022 and June 30, 2023, almost double the 25,000 visas issued under both schemes in 2021-22. They included 18,400 migrants under the short-term PALM (previously SWP) and 17,400 under the SWP, plus 12,000 visas issued under the PALM long-term program.
The leading country of origin for ANZ migrant workers was Vanuatu, which accounted for 16,600 or 35 percent of the ANZ work visas issued, almost all for short-term work (1,000 visas were issued under PALM long-term). Samoa (6,700) and Tonga (6,400) were next, while Fiji and Solomon Islands sent mostly PALM long-term migrants.
Many PICs are re-examining the benefits and costs of labor mobility. The Samoan government has been reviewing seasonal worker departures on a month-by-month basis since October 2022, while Tonga began a review of its migration policy in April 2023. The Vanuatu government released a Labor Mobility Policy and Action Plan (2023-26) in May 2023, and is allowing 1,500 migrants into the country to deal with complaints of labor shortages.
Sunak, Kristin. 2023. The Golden Passport: Global Mobility for Millionaires. Harvard. https://www.hup.harvard.edu/catalog.php?isbn=9780674248649#:~:text=The%20first%20comprehensive%20on%2Dthe,ways%20defined%20by%20our%20citizenship