Migration and the Economic Crisis
In the global economy’s current state of financial crisis, the three economically and culturally divisive aspects of migration discussed before will most likely been further intensified by drastically changing labor market conditions. According to the Development Research Centre on Migration, Globalisation and Poverty, declining GDP in most developed countries has already led to a decreased demand for labor, with migrants bearing the brunt of job loss in areas such as construction, manufacturing, and services.
With trade and foreign direct investment (FDI) severely faltering over the past year, many migrants in the export sector have lost their jobs and have been forced to return home, while many potential migrants from developing countries have been deterred from making the trip across borders.
Although it is still too early to gauge the true impact of the crisis thus far, many economists believe that this turnaround in migration flows is potentially the biggest since the Great Depression. Estimates for China have already accounted for over 10 million internal migrants from rural China who have been put out of a job due to decreasing export demand. Emigration from Mexico to the U.S. has also decreased significantly, dropping 13 percent in the first quarter of 2009 compared to the same period in 2008, with more Mexicans leaving the U.S. than coming in.
In many countries, the volatile economy has already exacerbated domestic pressures for government restrictions on immigration. In Russia, for example, Prime Minister Vladimir Putin recently enacted a policy intending to reduce the level of foreign workers in the country, while at the same time encouraging a youth branch of his Unified Russia party to engage in a campaign to “reclaim jobs for Russians that are occupied by foreign migrant workers.”26
In Australia, where violence against foreigners such as Indians has become a problem in recent years, the government has reduced its intake of migrants in order to mitigate the effects that the financial crisis is expected to have on ethnic relations in an increasingly competitive job market, Countries like Japan and Spain have tried an alternative approach to lessening the political and financial burden of immigrants by offering them cash incentives to return home.
With many migrants losing their jobs and returning home, the financial crisis thus may have an indirect effect on economies in developing countries through its impact on migration remittances. As explained above, many countries, such as Mexico and Tajikistan, rely heavily on money sent home from compatriots working abroad to increase their domestic GDP and spur on economic development. As the global economic slowdown forces many of these remittance-sending migrants out of a job, it is the families and communities who rely on these payments as a major source of income who suffer the most.
In Somalia, for example, where remittances have provided a lifeline for at least a third of the population, the 25 percent downturn in the level of remittances in the wake of the financial crisis, are expected to have a devastating effect on this country already plagued by instability and drought.
Click here to read about: The Financial Crisis and Xenophobia.
26 http://www.migrationdrc.org/publications
/briefing_papers/BP17.pdf;
http://www.rferl.org/content/
Global_Financial_Crisis_Costs_Many_
Migrant_Workers_Their_Jobs/1361209.html;
http://www.iom.int/jahia/webdav/shared/shared/mainsite
/policy_and_research/
policy_documents/policy_brief_jan2009.pdf
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