27 October, 2020

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Craving A World With Free Migration Of Homo Sapiens

By W.A Wijewardena –

Dr. W.A Wijewardena

A world with free migration

During the discussion time following the presentation of a paper by former diplomat Tamara Kunanayakam on the invasion of Sri Lanka’s economic policymaking by neoliberal economic thinkers two weeks ago, Colombo University’s economics don Lalithasiri Gunaruwan made a very pertinent point regarding the need for a two-way free migration of people across the world.

He argued that the Western world is asking the emerging world to open up their economies for free movement of capital and labour from the former to the latter. But, when the labour is to move from the latter to the former, they impose all kinds of restrictions to such labour. Hence, capital and labour movement is one way; as a result, he opines, it benefits only those in the West and not the peoples of emerging nations.

A critical review of Tamara Kunanayakam’s paper was made in a previous article in this series.

This article is devoted to analysing Gunaruwan’s key point to ascertain its relevance to the emerging world, and in particular to Sri Lanka.

Man is born to migrate to new lands 

For about 70,000 years, the modern man who is called Homo sapiens has been migrating freely from land to land and settling down in new territories without any objection or impediment. This system continued till the World War I in 1914 benefiting migrants as well as their hosts, if those lands had been already inhabited by Homo sapiens. Migrants were able to restart a new life, while those who had already been there were able to acquire new knowledge, culture, technology, religious faiths and so on.

Sri Lanka has been one noted beneficiary because its culture, faith, science and technology, etc. were nourished by those migrants for thousands of years. But this was to end abruptly after World War I.

Restrictions on migration are relatively new

The influential British economist of the 20th century, John Maynard Keynes, in his 1919 book on The Economic Consequences of the Peace has vividly explained this change from good to bad.

Referring to a typical Londoner before 1914, Keynes had noted that such a species at that time could “secure forthwith cheap and comfortable mode of transit to any country or climate without passport or other formality”. In this manner, the vast empty lands of Americas were filled by migrants from Europe and Africa. Those from the former did so voluntarily, but those from the latter were transported to Americas against their will.

Keynes had noted that this liberal accommodation of foreigners in new lands helped both the newcomers and their hosts equally. Newcomers had converted the empty barren lands into flourishing agricultural fields thereby producing a surplus of foods and other agricultural produce to be exported to Europe. Around that time, people in Europe had been frightened by the possibility of starvation and death due to a shortage of foods, because its production was expected to lag behind the faster growing world population.

It was a scary expectation and the author of that scary story was the British scholar Thomas Malthus who published it in a book titled ‘An Essay on the Principle of Population’ published in 1798. Keynes had equated Malthus’ prediction to loosening of Devil into society. But that Devil, Keynes had noted happily, was chained by the increased food supplies from Americas to Europe, thanks to free migration policy.

This also helped Europe to release more people to produce industrial products to meet the growing needs of Americas. Thus, liberal migration was a ‘win-win’ for all. But, that was to change after the World War I due to restrictions on migration imposed by almost all the nations in the world acceding to the popular demand coming from their own citizens. In this new world order, migration was also like the motive of the old mercantilist policies: other nations should accept your citizens as migrants but you should impose restrictions on those who are to come from those nations.

Advocating a two-way migration practice

The issue raised by Gunaruwan was that there should be complete parity with respect to movement of people from one country to another as a factor of production. In simple terms, what it means is that if USA wishes to send its experts to Sri Lanka for employment, it should be ready to accept Sri Lankan people too for employment in return. If this parity is maintained, it appears that Gunaruwan does not have objection to free migration.

But, USA, as a nation, has imposed numerous restrictions on the inflow of workers from developing countries. It is not a free flood of migrants as it had allowed from its early days to about the first two decades of the 20th century. Today, it is the skilled categories that are permitted but in those categories too, they are accepted only after the workers are carefully screened with respect to the country of origin, level of qualifications, past criminal records, medical fitness and recommendations from prospective employers.

After Donald Trump became the President a year ago, this has further been restricted. Other developed countries in the world too have followed a similar policy with respect to international migration. Even the countries like Canada or Germany which accommodate refugees liberally have imposed strict screening standards when it comes to accepting applications from general migrant workers. Hence, what is being advocated today is for the establishment of a system that allows free movement of people from one country to another.

Free migration practices are also liberal thinking

Strangely, this view is liberal economic thinking. According to this thinking, the world becomes a happy place for everyone if factors of production – land, labour, capital and enterprise – could move to places where they can be engaged most productively. It helps the factor concerned as well as the user of that factor to produce the highest output possible.

Suppose I use only my hands to prepare my paddy field. It takes me a long period to prepare the land manually and by the time I finish it, my cultivation season may have been over making my efforts totally fruitless. On top of that, the sheer manual work would have completely exhausted me beyond recovery.

Now suppose that someone with a mammoty comes to my paddy field and I engage him to prepare the land. He represents labour, capital and technology. His engagement will help me to prepare the field in double quick time and I manage to cultivate it before the season is over. I now produce an output and it is still profitable for me to share it with the person who brought me labour and capital. Hence, the migration of factors of production is beneficial to me.

This general observation which is relevant to me is relevant to a firm, a nation and the whole globe. Hence, free factor mobility will help the entire globe to reach a higher level of output and it is beneficial to everyone.

Balassa effect: Young from poor to rich and old from rich to poor

But, how is the flow of migration between different nations determined? It was Hungarian-American economist Bela Balassa who came up with a plausible explanation based on differences of purchasing power among nations.

Purchasing power parity or PPP indicates that free international trade allows prices in two markets to be equal to each other which economists call ‘the law of one price’ and if there is any difference, that could be due to transportation costs. However, Balassa found that even with free trade of goods that are presented to international markets – called ‘tradables’ – there are many goods that are not presented to international markets – called ‘non-tradables’.

An example is the services such as a haircut of which the price is higher in rich countries than in poor countries. For instance, a Sri Lankan can have a quality haircut for $ 5; but an American will have to spend about $ 25 for the same haircut. Thus, a high proportion of tradables make incomes of rich countries higher than those of poor countries. Non-tradables make their prices also higher than those in poor countries. This gives incentives for international migration.

Accordingly, young people in poor countries have incentive to move to rich countries, work for some time and return to their motherlands with an accumulated capital. Similarly, old people in rich countries who get a fixed income in their own currencies have incentives to settle down in poor countries so that they could enjoy a higher living condition. In the case of the former, it happens whether there are prohibitive legislations or not.

Young people of poor countries move to rich countries illegally for illegal employment. There is a significant number of such illegal workers in South Korea, Japan, Malaysia, Singapore, Italy and USA. Since such illegal workers make a valuable economic contribution to their national economies, even the governmental authorities pay a blind eye on their presence.

But the old people cannot come and settle down in a poor country illegally and they have to come via official channels. What this means is that though rich countries may have not opened the door formally for migrant workers, they nevertheless work illegally in large numbers.

Professionals in rich countries have no incentive to flood poor countries

This exposition also explains why the professionals in rich countries have no incentive to flood poor countries unless they are paid the same salary they get in their mother countries. This has been one of the contentious issues raised by professionals in Sri Lanka against the recently signed Singapore-Sri Lanka Free Trade Agreement. Economic theory says that they need not have such a fear.

If any Singapore citizen chooses to work in Sri Lanka, it would be only in the case of occupations that carry the same high salary levels as in Singapore. That can happen only in the case, as the agreement has provided for, of employees of the same company working in a branch of the company setup in Sri Lanka. These are called ‘intra-corporate’ transfers of workers because it is the same company involved in moving people from Singapore to Sri Lanka. It appears that Sri Lankan professionals have mistakenly identified these intra-corporate transfers as ‘inter-corporate’ transfers.

Restrictions are to promote illegal migrations

Thus, international migration of workers takes place both legally and illegally today. In both cases, a migrant worker has to face a significant risk about employment, life, working conditions and regular payment of salaries etc. It is the responsibility of the host governments to help migrant workers to face these risks, but in the absence of a proper governance structure, this does not happen as expected. To fill the gap, the UN body – International Organisation for Migration or IOM – has now stepped in.

A blueprint on migration governance

According to Shantha Kulasekara, Head of Governance at the Sri Lanka Office of IOM, a blueprint and a work plan for establishing a governance structure for migrant workers have now been completed by IOM.

“We’ve already released a short version of our blueprint,” says Kulasekara. “But the longer version of the blueprint is now almost ready for submission to Sri Lanka’s authorities. If it receives their acceptance, IOM can help Sri Lanka Government to establish a proper governance structure in Sri Lanka which will help the country to accommodate foreign workers as well as send its own workers abroad.”

Sri Lanka should promote both inward and outward migrations

Kulasekara in fact foresees a two-way mobility of workers in Sri Lanka in the future. This is the worry which the Colombo University don Gunaruwan has.

Kulasekara further explains his point: “Sri Lanka’s future economic prosperity will depend on whether it could build a critical pool of talented and creative workers. Right now, its educational institutions or professional bodies have not been able to satisfy this demand. Hence, there is a gap in what is needed and what is available. Countries with such gaps have temporarily filled them by attracting foreign workers. Sri Lanka too has to follow this path, if it is desirous of delivering prosperity to its citizens.”

Kulasekara continues: “At the same time, it is high time for Sri Lanka to revisit its practice of sending unskilled and semi-skilled workers abroad. They have created a labour shortage in Sri Lanka. On top of that, those occupations also earn low salaries. Hence, Sri Lanka’s out-migration should be only branded categories. Similar policies have been adopted by India which has branded its out-migrants to IT specialists and the Philippines which has branded it to seafarers.

“These are the occupations for which these two countries have a comparative advantage. Besides, India wants its IT specialists to return to the country with an accumulated wealth of experience and exposure. That will be the future critical talent pool of India to take the country along the development path. Sri Lanka’s brand is hospitality and services such as accounting and finance. Though Sri Lanka’s national average of unemployment is about 4%, the unemployment rate among the young categories is about 20-25%. These young categories should be trained in the new branded occupations and allow out-migration for a temporary period.”

Migration policy should have the blessings from the top

Kulasekara says that it is a task which the Government has to accomplish with blessings from the highest level. Presently, the Government’s responsibility in this area has been diffused among a number of public institutions. It is therefore necessary to create a central body to look after this work. A possible candidate would be the Ministry of Finance which has an interest in delivering prosperity to Sri Lankans through its financial plans.

*W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com

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Latest comments

  • 0
    0

    You are not specific about what you are writing. Otherwise, so called Free world kept on getting thrid world as well as from the other members of the free world the labour, Knowledge and even some wealth they wanted. But may be for the last ten years, We hear that European and British politicians are very anti-immigrent Recently once Trump camp, he did the same thing. Other wise, IT is imigrents from free world who ran, enriched their economies and increased their GDPS. You know France, Germany, and Britian had lot of Racosm mostly to Balck Africans, and muslim cloths. there is a you tube clip in which one well known american theoretical physicist, Michi Kaku, says that 50% of the university graduates that USA needs comes from the third world countries. check tgheir patents mostly, the work carried out by Indian, chinese or by migrents, but the main author is a n european. There was a British Scientist. I think Thoma alva Edison. He published about 150 or more PAtents. do you think he was that brillient. that was the time that India, china and asia was under brithsh. there is no checking these things. Otherwise, My point all those are stolen knowledge. so, the theory that they should allow immigrents to come is BS. they still wants. Rich and well educated who can contrubute to their research and development. Even in their R & D, the immigrents won’t get anything in sucurity related work. some say that the taking the Malaysina airlines was related to some top class chinese Computer scientists being inside. So, that theory is compltely wrong. They still need people, their birth rates are down. the countries are very large. They will take but in their own terms. IF you are thinking about the Islamic world, may be their R & D contribution is very low. If they are poor the probability is very low.

    • 1
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      Dr. Wij. This is idealistic, kind and naive!
      You need some social and political science here, and intellectual history too; to uproot that neolib. myth- notion of “Homo Oeconomicus” that you practionors of “dismal science” or economics (that has screwed up the world) live on!

      1. You have forgotten the invention of the odious “modern nation State” — the great gift of the British Raj to the “post-colony” (Achille Membe), and the power of racism and nationalism in Fake and corrupt post-colonial Democracies like Lanka, in Asia and Africa.

      2. Indentured labour and slavery were forms of labour migration of the capitalist system. Please read Sidney Mintz’s “europe and the People without History” Today we have new legalized slavery in the Middleeast and elsewhere.
      First abolish the nation state and capitalism and the people will be on the move.

  • 5
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    Most interestingly written by Dr. W.A Wijewardena, and I hope that it will stimulate lots of as piquant comments.
    .
    I’m sure that Dr W. knows that at one level it lampoons the the economist in him. Yes, before WW One, the West welcomed labour – even from Africa: ” those from the latter [Africa] were transported to Americas against their will.” He artfully separates, within the sentence the European from the African. Today, with “the browning of America” those who do get through can and do fight for equal rights. The whites remain “more equal” but Obama did make it to the top.

    I guess that Trump would allow free migration if we brownies were bonded slaves who are commodities. No rights whatever; to be bought and sold as whites thought fit. In the past, forced in to the country they were; now many of us would voluntarily go West, and those who accept slavery will be tolerated.
    .
    A bit similar to our country – so no wonder Trump is so popular here. If only these Tamils, every one of them a recent Kallathoni accepted his inferior status, then we’ll have them. But don’t talk of Rights!
    .
    All of this is a fresh view, but I’m surely the author is wise enough to know that the Tamara Kunanyakams must know their place! However clever and intelligent, however polyglotic, if you stop serving us, please remember what is going to be in store for you!

    • 1
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      Sometimes one wonders whether it can be dangerous to use sarcasm, as I have done in the last two paragraphs above.
      .
      I hope that all Tamil speakers will understand that I don’t accept the view that any category of citizens can be discriminated against. What I am saying is that there it is wrong to go in to history (and that history is often distorted) and limit the contributions that individuals can make.
      .
      I guess clarity is what one needs to cultivate above all else when commenting.

  • 0
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    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 0
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    If only earth was flat and infinite.
    This kind wishful thinking will become practicable only if and when world population starts declining.
    As far as I am comcerned I may hire labour and pay for it or suffer the shortage , but never allow permanently moving into my house.
    From the day this useless hookup called SAARC was formed I was worried about this nightmare of possibility of free migration. I knew some nincompoos at some point of time whould start pushing this dangorous idea. Does everybody know that Bangadesh land area is just twice that of Sri Lanka while population is seven and a half times!
    Soma

  • 0
    1

    Watch it mate. Half of Tamil Nadu will be invading SL in no time if your theory is implemented. Unless if you consider the poor folks of TN as worthy migrants. Even a bridge between SL and TN is a frightening thought.

    • 2
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      Dear Donald,
      .
      I used to have dreams of “World Government” and equality when a child. I actually wrote to the BBC World Service, and the letter was discussed by Philip Noel-Baker, a distinguished M.P of the times.
      .
      It’s an ideal, but the practicalities are different, he said himself. In my earlier comment, written after seeing only the article, no comments, I said the article is one that leaves out a lot. No, it won’t be possible for anyone to allow all of Tamil Nadu (Soma has already referred to Bangladesh) to come streaming in here.

      .
      One doesn’t have to be anything like a racist to get nightmares at possibilities of that sort!

    • 3
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      Mr. Donald might like to know that there already about 200,000 workers from Tamilnadu and a similar number from China already here. Why are they here? They are building all those fancy skyscrapers in and around Colombo, because our local layabouts prefer to sit around in the million three-wheelers on the roads.
      Why don’t you spend a few weeks in Tamilnadu and see what it is like now? There are scores of IT parks, thousands of skyscraper apartments, cars dirt cheap, and dozens of car factories (including a REAL Volkswagen factory.)
      Of course there is more dirt than here, but isn’t that a good trade-off for a lower cost of living and a Rupee worth almost 3 times ours? Oh yes, and a passport that is not a cause for suspicion? They don’t need to send their women to Dubai either.
      Dr. Wijewardena and Lalithasiri are perfectly correct. Migration will take place whether it is official or not. So we might as well forget all these hangups about invasions and regularize it.
      Mr. Donald, if it is OK for Sri Lankans to flood Italy / Australia in boats, why shouldn’t other people come here?

  • 0
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    Sir, it is idealistic. Sadly nation states have their identities. They have always tried to protect their identities. When you talk about the West moving Capital to the third world, that is to make profits because of the comparative advantage of having access to cheap labour and land. Westerners mint money doing jobs in Dubai, Saudi Arabia etc but they do not migrate. They make more money than their brown equivalents in the Oil Rich Arab world. But they do not migrate. Sri Lankans are afraid of the in-breeding segregationist Indians taking over Sri Lanka. India has the world’s longest border wall with Bangladesh. It shoots Bengalis trying to cross over without compunction. Some are bashing Trump. Imagine if Japan had to deal with 25 million Mexicans or Koreans for that matter. Japan is a xenophobic close knit society.

    • 0
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      Thangamma,
      ” India has the world’s longest border wall with Bangladesh. It shoots Bengalis trying to cross over without compunction.”
      If the Bangladeshis remained in India in1948, this wouldn’t have happened. Mistakes like that are hard to rectify. We too should have joined india as JR suggested once.

  • 0
    0

    Sir as a follow up, also look at the new wave of immigrants. They are fleeing poverty and war. But they cannot adapt. In Denmark Muslim Sharia Arab thugs wanted Bars to close. In Sweden in Maalmo there are no-go zones for Real Swedes now. In Germany, Angela Merkel regrets allowing barbaric sub-civilized Arab and African Muslim immigrants. There too there are no-gone zones now. Why is that? That cannot be allowed. The migration is NOT at all 2-way. Do you find White Germans coming in the millions to Ceylon? or Americans or British? not anymore no…Colonialism has vestigial effects but these new wave of Muslim Arabs are a danger to civilized western societies. Rapes have increased, Sexual assaults have increased, robbery too.. In Australia Somalian Negroes have a gang called APEX. They are the BIGGEST law and order problem in Melbourne; even worse than Lebanese and Serbian drug gangs.

  • 0
    0

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 4
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    I was not surprised to see some of the responses to this article. We need to be careful that we get the facts right. Unfortunately we tend to work on imagined facts that become established through repetition. In 1941 the State Council passed an Immigration Bill. Our leaders did not want to look at the Jackson Report the Council had commissioned, or to discuss it, after it was published in 1938. The Bill was based on a belief, more ideological than factual, that unless free movement from India was stopped, this country would be flooded by Indians. The Jackson report after sober analysis concluded that Indians taking up jobs here was not the cause of unemployment.
    Again, a sober look at migration statistics of the 1920s and 1930s shows that there was no threat of Indians flooding this country. Indians came when work was available and went back when there wasn’t. The Indian population in Ceylon declined in the 1930s from about 850,000 to less than 700,000. The main reason for the increase of the settled Indian population was the nature of tea production. They were encouraged to come and settle on promises.
    The Immigration Bill was passed by nearly all the Sinhalese members voting for it and the Tamils against. B.H. Aluwihare abstained. N.M. Perera, Philip Gunawardena and Robert Gunawardena would have voted against if they had the opportunity to do so. G.G. Ponnambalam made one of the greatest speeches of his career supporting the author’s thesis.
    The Bill of 1941 was the precursor to the disastrous Citizenship Act of 1948. We have wasted ourselves for 70 years trying and failing to fix the political problems created by our forebears and seeing no chance of success. Perhaps, having an open border with India might work miracles.

    • 3
      0

      Rajan,
      A great reply to all the blinkered isolationists!

  • 2
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    Dr WA Wijewardena is correct in saying ~ “For about 70,000 years, the modern man who is called Homo sapiens has been migrating freely from land to land and settling down in new territories without any objection or impediment…”.

    70,000 years ago migration was to find land to cultivate and tend domesticated animals. At that time there was no concept of ‘homeland’, unemployment or slavery.
    At some stage slavery became accepted practice. Will there be those ‘magnificent’ pyramids without slavery?
    WA W adds ~ “……..This system continued till the World War I in 1914 benefiting migrants as well as their hosts, if those lands had been already inhabited by Homo sapiens……….”.

    By this time the migrants were leaving their mother/father/homelands in search of gold. Were the Homo sapiens already there ‘hosting’ the migrants? My foot. Red Indians were massacred by the ‘guests’ and in 1914, Australian aborigine hunting was weekend sports.
    .
    To cut a long story short Colombo University’s economics don Lalithasiri Gunaruwan’s suggestion regarding the need for a two-way free migration of people across the world is, wild fantasy. It is like saying, “If only we follow our respective religions to the letter”.

  • 1
    0

    For the past seventy years, now and in the foreseeable future successive GoSL walked and talked only the need to defend our “Sinhala Buddhist Heritage”.
    Here is Colombo University’s economics don Lalithasiri Gunaruwan’s suggestion regarding the need for a two-way free migration of people across the world. Dr WA W seems to approve this idea.
    .
    Leave the merits and demerits of this suggestion for a minute.
    Had this suggestion come from a Tamil or Muslim we have the ingredient for yet another pogrom.
    Herein lies our problem!

  • 0
    0

    First and foremost the man made religion factor has to be removed from the world to even think of a concept of this manner.

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