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Migration and Development: Mexico and Turkey Report, February 19-21, 2006

Migration and Development: Mexico and Turkey
Agustin Escobar, Kay Hailbronner, Philip Martin, and Liliana Meza
Ciesas Occidente, Universitat Konstanz, University of California-Davis, Universidad Iberoamericana
February 19-21, 2006
Table 1. Mexico and Turkey, Comparative Data, 2004
Figure 1. Remittances to Mexico, Turkey, and all Developing Countries, 1990-2005, 1990-92 = 100
Table 2. Mexican Immigration and Apprehensions: 1890-2003

Mexico and Turkey are among the world's leading labor-sending nations, with about 11 million Mexican-born and 3.5 million Turkish-born persons abroad in 2006. After two decades of uneven growth and job creation as well as persisting poverty and inequality, there are debates within both countries asking whether economic reforms have gone far enough to put the economy on a stable footing for sustained and equitable growth, or whether emigration (pressure) will continue. Some Mexicans are seeking to deepen NAFTA, while most Turks support entry into the EU as a way of speeding economic growth.
The 14th Migration Dialogue seminar, organized in conjunction with the Universitaet Konstanz Center for International and European Law on Immigration and Asylum, Ciesas Occidente and Universidad Iberoamericana was held February 19-21, 2006 in Mexico City to compare the migration and development experiences of Mexico and Turkey. Mexico and Turkey are among the world's leading labor-sending nations, with about 11 million Mexican-born and 3.5 million Turkish-born persons abroad. The seminar explored the effects of past migration on their development as well as prospects for more emigration.

Mexico and Turkey share several similarities. Mexico is the third most populous country in the Western Hemisphere, after the US and Brazil, and Turkey is the third most populous country in Europe, after Russia and Germany. Both Mexico and Turkey changed from state-centered economic policies that aimed to shield their economies from global competition after economic crises in the mid-1980s to open polices that led to increased imports of goods and foreign investment; the hope was that investment would create jobs and stimulate exports. After two decades of uneven growth and job creation as well as persisting poverty and inequality, there are debates in both countries asking whether economic reforms have gone far enough to put the economy on a stable footing for sustained and equitable growth.

Mexico and Turkey also experienced political changes recently, with the dominant political party in Mexico losing the presidency for the first time in 70 years in 2000 and leaders previously banned in Turkey winning elections there. Political power in both Mexico and Turkey was concentrated in the hands of a single federal political leader for most of the 20th century, making economic development a top-down affair, and prompting efforts to decentralize political power in both countries.

Both Mexico and Turkey have relatively poor indigenous groups/minorities concentrated in the south and east, respectively. Both are secular states in countries with strong religious traditions. Finally, both Mexico and Turkey have shown that history does not have to repeat itself. Mexico did not have an economic crisis during its presidential succession in 2000, and Turkey has not had a "once-a-decade" military intervention since the early 1980s.

There is a sharp contrast between Mexico and Turkey in labor emigration. The outflow of Turkish workers peaked in the early 1970s, and Turkey became a net immigration country in the late 1990s. Remittances to Turkey have been falling, especially after 2002, and exporting workers is not seen by the government as a way to absorb the growing labor force and promote development in poorer areas, a reversal of 1960s hopes that emigration would lead to development.

In Mexico, by contrast, emigration and remittances are at record levels, as up to 700,000 Mexicans a year move to the US and remittances approach $20 billion a year. Mexican President Fox has called migrants heroes, and said that their remittances are essential to Mexico's economic development. Demography in the form of smaller cohorts of youth entering the labor force may reduce Mexican emigration pressures after 2010, but the fact that less than a third of the 45 million Mexicans in the labor force have formal sector jobs promises significant emigration pressures for years to come.

Turkey is also struggling to create good jobs for young people entering the labor force as well as ex-farmers, women and those who are underemployed, but only a trickle of Turks are going abroad to work. However, Turkey's reservoir of migrants may be relatively larger than Mexico's, since a third of the Turkish labor force is employed in agriculture, versus a fourth of the Mexican labor force.

The US is the destination for Mexicans, and Germany is the main destination for Turks. The US accepted Mexico's proposal for a free-trade agreement in part to speed up economic and job growth in Mexico and reduce emigration. NAFTA, which went into effect in 1994, raised foreign investment and created jobs in assembly plants known as maquiladoras, but also speeded up the displacement of labor in previously protected sectors such as agriculture, producing a migration hump that may plateau or eventually fall.

Turkey is negotiating accession to the EU, and hopes that EU membership will increase foreign investment and job creation. Instead of a new wave of migrants when Turks would be free to seek jobs throughout the EU, the Turkish government expects Turkey to be a transformed as an EU member, with modern infrastructure and high-wage jobs, so that like Portugal and Spain there would be very little emigration despite freedom of movement rights. However, Turkey is likely to be the most populous EU country by 2015, and there is a potential for a Turkey-other EU migration hump if job and wage growth are slower than optimists hope. EU-10 member countries such as Poland are sending large numbers of migrants to the EU-15 countries that permit freedom of movement such as Ireland and the UK, and this experience combined with Turkey's faster population growth means that there could be a Turkish migration hump.
Mexico and Turkey
Mexico is more populous and has a higher per capita income than Turkey, but Turkey's economy expanded faster than Mexico's in 2003-04 despite Mexico receiving far more foreign direct investment. Mexico is the world's largest net emigration country, while Turkey has had more immigrants than emigrants since the late 1990s.
Table 1. Mexico and Turkey, Comparative Data, 2004

Mexico and Turkey, Comparative Data, 2004
Mexico Turkey
Population(mils) 104 72
Growth 2000-04% 1.4 1.5
GNI/capita ($) 6,770 3,750
Growth 2003-04% 2.9 7.4
FDI ($ bil 2003) 10.8 1.6
Net Migra 1995-2000(mils) -2 0.135
Source: World Bank, World Development Report, 2006

Mexican and Turkish workers were initially recruited by employers in the US and Germany who sought and won government approval to employ guest workers. Under both the Mexico-US and Turkey-Germany guest worker programs, migrants were expected to rotate in and out of the country, with Mexicans returning after their seasonal US jobs ended, and Turks returning after one or two years working on German assembly lines. In both countries, most of the migrants rotated in and out of the country as expected, but guest worker programs got larger and persisted longer than expected. As a result, some workers settled with their families, and legal guest workers were accompanied by unauthorized and quasi-legal migrants. This guest worker experience led to several aphorisms, such as guest worker programs are far easier to start than to stop, and there is nothing more permanent than temporary workers.

The purpose of guest worker programs is to add temporary workers to the labor force without adding settlers to the population. Defined in this way, all guest worker programs fail, since some migrants settle with their families. This settlement can be legal, as when Turks whose employers requested renewal of their work permits were permitted to have families join them, or quasi-legal, as when unauthorized Mexicans who were apprehended were legalized and returned to their farm jobs under the Bracero program in a process that even US government publications referred to as "drying out wetbacks."

The get-larger and last-longer features of guest worker programs can be traced to incentives and impacts in both receiving and sending countries. Distortion is a term that captures the change in the decision-making processes of some employers, who assume that migrants will continue to be available. They make investments that would not be profitable without a continued influx of migrants, as when farmers plant apples in areas without workers or meatpackers located dis-assembly plants in areas without sufficient workers for their planned operations. In one short-hand comparison of the German and Japanese experience, it was said that German auto makers got Turkish migrants to work on assembly lines while Japanese automakers developed robots when their government declined their request for guest workers.

In Mexico and Turkey, some migrants, their families and areas of origin became dependent on foreign jobs. Without an economic transformation in these areas, the pressure to seek foreign jobs increased with population growth rather than decreasing as remittances were invested to create jobs. The experiences abroad of returned migrants made it easier for additional workers to emigrate, legally and illegally, so that labor out-flows in some cases increased in snowball fashion.

There were significant differences in how migration evolved in Mexico and Turkey after guest worker recruitment ended. There was little illegal migration from Mexico during the first decade after the Bracero program ended, but in the late 1970s a combination of an economic crisis in Mexico and US farmers resisting sharply higher wages demanded by US farm worker unions expanded what had been a trickle of illegal migration. The US responded to rising unauthorized migration in the mid-1980s with legalization for 2.7 million unauthorized foreigners, 85 percent Mexican, and employer sanctions that were intended to stop future illegal entries. The legalization program was riddled with fraud, as the US government gave immigrant visas to far too many Mexicans who said they had done qualifying US farm work, while the employer sanctions were not enforced. The experience of winning immigration benefits with false papers and lack of enforcement led to the extremely high levels of unauthorized Mexico-US migration of the past decade.

The Turkish experience was different. Germany stopped the recruitment of non-EU foreign workers in 1973, but allowed foreign workers who had been in the country more than a year to stay. Despite some local government pressure and return bonuses to encourage the return of especially unemployed Turks, most Turks stayed even if they were unemployed because of poor prospects for economic advancement in Turkey. There was a wave of family migration to Germany and, after a military coup in the early 1980s, many Turks came to Germany and applied for asylum. Turks continued to migrate for 15 years after recruitment ended, so that net Turkish migration to Germany averaged 400,000 a year in the late 1980s.

However, by the late 1990s, net Turkey-Germany migration fell to 70,000 a year, and included mostly family unification migration and some asylum seeking. As Turks settle in Germany, remittances to Turkey have fallen, a sharp contrast to the rising remittances in Mexico.
Figure 1. Remittances to Mexico, Turkey, and all Developing Countries, 1990-2005, 1990-92 = 100

In sum, both the US and German governments approved the recruitment of Mexican and Turkish workers. Both governments halted guest worker recruitment amid debates about what had gone wrong with the original assumptions that foreign workers would not settle. The legacies of the guest worker experience in both countries are mostly negative in the minds of many government officials and the public, complicating discussions of unskilled guest worker programs in the 21st century.
Mexico-US Migration
The US allowed farmers to recruit Mexican guest workers during wartime, first in 1917 and again in 1942. Large farmers in the western states had become accustomed to a large pool of workers with few other US job options and, when this pool shrank rapidly due to the military buildup and the expansion of wartime industries, the Mexican and US governments agreed to create Bracero (strong arm) seasonal worker programs that allowed Mexicans to work legally for up to a year on US farms and railroads.

The program between 1942 and 1964 was the largest, admitting almost five million Mexicans (some individuals returned year-after-year, but one to two million Mexicans participated). However, there were more apprehensions of Mexicans illegally in the US than legal Bracero admissions during this period (both data series are events, not unique individuals—the same individual can be counted multiple times in each series).

The Bracero program resulted in distortion and dependence, the two-Ds of most guest worker programs. Distortion was evident as US farmers planted additional labor-intensive crops, even in remote areas, knowing they would not be profitable if the influx of migrants was reduced. US farmers had an economic incentive to maintain and expand Bracero admissions, increasing land prices and wealth. Meanwhile, many rural Mexicans became dependent on seasonal US farm jobs to support their families, and faced a fall in their standard of living if they were unable to continue migrating to the US for employment because their usually rural areas of origin did not develop during the Bracero years.

Distortion and dependence occurred over two decades in the major activities of farmers and migrants, but there were also secondary responses with far-reaching consequences. US employers had to pay the cost of transportation from the worker's Mexican home to the US job, so some Mexicans moved their families to the Mexico-US border to increase their chance of being selected. This reduced US farmers' transportation costs, but provided no employment alternatives in Mexico when the program ended in 1964, fueling illegal migration. Both governments recognized the problem, creating border-area assembly factories know as maquiladoras. Under the 1965 Border Industrialization Program, Mexico allowed duty-free imports of components, which were assembled into final products in Mexico and exported, and the US levied a tariff only on the value that was added by assembly operations in Mexico. Most of the maquiladora workers were young women, not ex-Braceros, and the maquiladora program created a new migration stream within Mexico, as young Mexican women moved to the border area.

The US government made it easy for some ex-Braceros to become immigrants in the late 1960s—at the time, even an offer of a seasonal job was sufficient to obtain an immigrant visa. Immigrant visas were then printed on green paper, and thousands of Mexicans became "green card commuters" who commuted to seasonal US farm jobs from homes in Mexico, as they had under the Bracero program. As these green card commuters aged, some had their sons and relatives replace them, often illegally, while others became farm labor contractors who recruited Mexican migrants for US jobs.

Mexico-US migration was relatively low until the 1980s, when peso devaluations and an economic crisis spurred more Mexico-US migration. The US responded with the Immigration Reform and Control Act of 1986, which had the unexpected consequence of increasing Mexico-US migration, largely because legalization came first and there was no effective border and interior enforcement. Nafta in 1994 was associated with a further increase in Mexico-US migration, as freer trade displaced Mexicans faster than foreign investment created new jobs.
Table 2. Mexican Immigration and Apprehensions: 1890-2003
Table 2. Mexican Immigration and Apprehensions: 1890-2003
Immigrants Decade Apprehensions a Decade
Annual Decade as percent of Annual Decade as percent of
Decade Average Total total 1890-2003 Average Total total 1890-2003
1890-1900 97 971 0% na na na
1901-1910 4,964 49,642 1% na na na
1911-1920 219,000 219,004 3% na na na
1921-1930 45,929 459,287 7% 25,697 256,968 1%
1931-1940 2,232 22,319 0% 14,746 147,457 0%
1941-1950 6,059 60,589 1% 137,721 1,377,210 3%
1951-1960 22,981 229,811 3% 359,895 3,598,949 8%
1961-1970 45,394 453,937 7% 160,836 1,608,356 4%
1971-1980 64,029 640,294 10% 832,150 8,321,498 19%
1981-1990 165,584 1,655,843 25% 1,188,333 11,883,328 26%
1991-2000 224,942 2,249,421 34% 1,466,760 14,667,599 33%
2001-2003 180,557 541,670 8% 1,008,017 3,024,052 7%
Total 6,582,788 100% 44,885,417 100%
Source: INS Statistical Yearbook and Yearbook of Immigration Statistics
a. Apprehensions record events, so one person caught three times is three apprehensions.
Mexicans are 95-98 percent of those apprehended.
* Apprehension data for 1921-30 is calculated as twice the reported 1925-30 figure (128,484).

The fact that Mexico-US migration has been on a rising trajectory over the past quarter century makes it hard to generalize about the effects of remittances on Mexico and migrant areas of origin. The usual assumption is that moving labor from lower- to higher-wage areas promotes convergence, as wages rise faster in origin areas and slower in destination areas. However, Mexico-US wage gaps have been stable or rising, not falling as convergence theory would predict, suggesting there may be significant lags between remittances and stay-at-home development.

It is also possible that, rather than convergence, migration can beget more migration, as gaps between sending and receiving areas widen and social and cultural factors make emigration the preferred avenue for upward mobility. This may be happening in parts of rural Mexico, where one pattern of behavior is to "work" in the US and rest and retire in Mexico. If migrants have an illusion of return, planning to return but staying as their families put down roots in the US, rural Mexico may wind up with an excess housing stock of dream homes built by migrants who do not return. Some data suggest that Mexico, unlike some other Latin American counties, loses economic output due to migration despite high and rising remittances.

Mexico's challenge in 2006 is to generate the economic and job growth necessary to absorb the smaller cohorts of youth entering the labor force, a legacy of declining fertility in the 1980s and 1990s. The facts are straightforward. About a million Mexicans a year turn 15, the age of labor force entry, and they have four major choices: continue their education, seek jobs in Mexico, emigrate, or drop out of the labor force. Many Mexican youth would like to continue studying or find formal sector jobs in Mexico, but Mexico has been creating only 300,000 to 400,000 formal sector jobs a year. Indeed, of the approximately 21 million Mexican-born workers with private sector formal jobs in 2005, a third are employed in the US.

Mexico is struggling to find a viable economic model for the 21st century. About 60 percent of Mexico's non-oil exports of $120 billion a year are from maquiladoras, but the maquiladora model of employing mostly young women with little education on assembly lines has probably run its course. There are about 1.2 million maquiladora workers, but Chinese workers paid $0.50 an hour are cheaper than Mexican workers paid $2 an hour. Unlike China, there are few backward linkages to Mexican-owned suppliers of components, so Mexico's primary value added is the wages paid to maquiladora workers.

The major question facing the maquiladora industry, and Mexico generally, is whether there are sufficient well-educated workers to justify relatively high Mexican wages in a globalizing world. The city of Chalco in the state of Mexico that surrounds Mexico City has a million residents and illustrates the challenge. Most Chalco residents live in one- or two-story concrete block houses, many of which are awaiting remittance funds to finish. Most houses have electricity, but few appear to have indoor plumbing or tap water.

There is no infrastructure to support industry in Chalco, which means that most residents must migrate out of the city for jobs. Some travel to Mexico City, which can mean an hour or two commuting each way, while others migrate to the US for jobs. Many of the returned migrants interviewed acknowledged the increased cost and difficulty entering the US illegally but, given the lack of jobs in Chalco, some young men nonetheless plan to migrate. Several pleaded for a guest worker program, suggesting that if the US opened legal channels for migrants many Chalco residents would be eager to go to the US for employment.
Organized Turkish labor emigration began with an October 1961 agreement between Turkey and the Federal Republic of Germany. The Turkish government promoted worker emigration and anticipated eventual free access to the European labor market as a means of relieving domestic unemployment pressures and obtaining remittances. In 1973, when Turkey's labor force was 15 million, including 10 million employed in agriculture, some 700,000 Turks were employed abroad, and their remittances were five percent of GDP. About 1.5 million or 10 percent of the labor force was on waiting lists to go abroad when Germany stopped the recruitment of non-EU workers in 1973.

The September 1963 Ankara Association Agreement and the Additional Protocol of 1973 promised Turkey a reciprocal lowering of EC tariff and eventually migration barriers, with Turks slated to have "free access" to the EC labor market by December 1986. Progress in implementing the Ankara Agreement was slowed by events in Turkey and in the EC. In December 1976, Turkey announced that it could not decrease its trade barriers as scheduled, and in January 1982, the European Parliament persuaded the EC Commission to suspend EC-Turkish relations. Turkey applied to join the EC in 1987, but its application was rebuffed. The EU rejected another Turkish accession bid in 1997, but in December 1999 EU leaders put Turkey on a list of countries eligible for future EU entry. Turkey made a series of changes to its laws and policies as requested by the EU, and in Fall 2005 accession negotiations began.

What impact did emigration between 1961 and 1973 have on Turkey, and how does the presence of 3.5 million Turks in Europe affect accession negotiations? The Turkish government in the 1960s hoped that remittances and the return of workers with skills acquired abroad would speed up economic development, especially in the poorer areas from which most migrants came. However, the government was disappointed. Even though remittances were equivalent to almost 90 percent of Turkey's export earnings in 1973, most studies of migration's effects in the migrants' areas of origin concluded that remittances and returns did not lead to an economic take off. There are several reasons, including the fact that some migrants did not return to their areas of origin, but the major theme of studies was that remittances and returns alone were not sufficient to spur development. Instead, there was widespread criticism of migrants using remittances to bid up the price of farm land or to buy gold or a car or truck rather than pooling their savings to create the factory jobs desired by the government (Paine, 1974; Abadan-Unat, et al, 1976; Penninx, 1982).

Paine concluded that, despite Turkish government efforts to favor the exit of unskilled and unemployed Turks, most of those who went abroad were employed at wages above the Turkish average, that a sixth of Turkish migrants were skilled by German criteria, and that Turkish workers earned three to four times more than they could have earned in Turkey. The goal of most migrants was self employment on return but, despite saving up to half their earnings, many did not achieve self employment. In one survey, about 85 percent of the migrants who returned to rural Turkey, and two-thirds who returned to urban Turkey, expressed a desire to return to Germany.

The Turkish government wanted factories, and promoted Turkish Workers Companies (TWC) to channel remittances into factory-type investments. Turkey had high tariffs when emigration was at its peak, and allowed migrants to convert their DM savings into lira to purchase stock in TWCs to import cars and other consumer items duty free. About 360 TWCs were "founded" in migrant areas of origin, 200 were incorporated, and 100 constructed a facility to produce a good. However, almost all TWCs failed, leaving only 80 with an employment of 11,000 in the early 1980s (Abadan-Unat, 1986, p. 358). The reasons for the failure of TWCs are apparent: in most cases, it made no sense to open factories in the rural areas from which migrants came because inputs had to be imported and outputs exported. As with Mexican maquiladoras, the only value-added was local labor, and even low wage costs could not compensate for high transportation costs.

Interviews with returned migrants in the 1980s who had invested in TWCs revealed considerable frustration, much of which derived from the falling value of the Turkish lira. Many returned migrant-investors discovered that their lira had only a fraction of its previous purchasing power because of successive devaluations. There was no Turkish stock market in the 1960s and 1970s, so TWCs were one of the few options available to channel migrant savings directly into Turkish industry.

Germany had 6.7 million foreigners in 2005, including 1.8 million Turks (about 650,000 Turks have become naturalized Germans in the past decade). Turks remain poorer than average, and their children tend to do worse in the labor market than German youth. In some ways, the prognosis is grim: the unemployment rate for Turks in Germany rose from about 20 to 33 percent between 2000 and 2005. German schools face a major challenge: ensuring that second and third generation Turkish youth get the schooling needed to get good jobs in Germany.
Mexico and Turkey present interesting similarities and differences. Mexico began sending workers abroad before Turkey, and both the number of Mexican migrants and the share who are abroad illegally has increased sharply in recent years. The free trade agreement NAFTA was expected to substitute trade for migration, but instead seems to have accelerated Mexico-US migration in the past decade, producing a migration hump of up to 700,000 Mexicans a year moving to the US. Over 80 percent of the Mexicans settling in the US since 1995 are unauthorized.

It seems clear that the US will respond to high and rising Mexico-US migration with more border enforcement, but it is not clear whether new interior enforcement measures will be introduced or how effective they will be. Also uncertain is whether the US will couple stepped up enforcement with a new guest worker program. The Mexican government seems to hope that its workers will be recognized as the fresh blood needed in the US, so that 500,000 or more Mexicans can continue to migrate to the US to work for the next decade, albeit legally.

Turkey is negotiating accession to the EU, its top foreign policy priority. Turkey has made a series of economic and political changes, and the major question is whether they are sufficient to put the country on a path to stable economic and political development. The fact that Turkey would soon be the most populous country in the EU, and that Turkey is far poorer and has a higher percentage of its workers in agriculture than any other current EU member, makes a migration hump a concern during accession negotiations.
Martin, Philip L. 1991. The Unfinished Story: Turkish Labor Migration to Western Europe, With Special Reference to the Federal Republic of Germany. Geneva. International Labor Office.

Paine, Suzanne. 1974. Exporting Workers. The Turkish Case. New York. Cambridge University Press.

Penninx, Rinus. 1982. A Critical Review of Theory and Practice: The Case of Turkey. International Migration Review, Vol. 16, No. 4. Winter. Pp781-818.

Sayari, Sabri. 1986. Migration Policies of Sending Countries: Perspectives on the Turkish Experience. Annals of the American Academy of Political and Social Science, Vol. 485. May. Pp87-97