Tuesday, August 22, 2017

Why Greater Openness to Immigrants in the Rich World Will be Disastrous for the Developing World

A couple of weeks ago, the Economist published a headline article calling for greater openness to immigrants.  True to its name, the magazine argued that a person with desirable skills is dozens of times more productive in the (rich) immigrant destination country than s/he would ever be in the (poor) home country. The increase in productivity makes sense in a multitude of ways: the dramatic increase in living standards for the immigrant, overall economic productivity for the immigrant host country, and the corresponding increase in tax revenues that come from the economy having a higher productivity.

However, while beautifully arguing the overwhelming economic benefits of receiving more immigrants in the rich world, the article did not touch upon what will happen to the source countries of the said immigrants if more of their talented citizens leave for greener pastures.  The silence is likely deliberate.  When the same economics logic is used, it can be argued that the increase in productivity within destination countries may trigger a corresponding decline in productivity within the source countries, as people who provide highly sought-after services depart in search of better incomes and livelihoods.

The grim reality of more open immigrant scheme for poor countries is apparent if one considers the types of people who are most likely to emigrate.  Doctors, engineers, scientists, IT professionals, and other highly educated people with universally relevant skills are most likely to leave first because they can easily find high paying jobs in any other country.  Conveniently, they happen to also be white-collar professionals that tend to be in great shortage in all countries, including the very richest with the best educated populace.  More openness to immigrants will greatly benefit them and allow them to cross borders that much faster.

But the same white-collar professionals, if anything, are in even greater shortage in their poor homelands than in rich countries where they immigrate to.  Shoddy education systems mean that poor countries can train few of the talents needed to provide proper medical, engineering, IT, and other services that are fundamental to the upkeep of modern economy.  Removal of the said professionals, if unimpeded, can dramatically worsen the standard of living in the poor countries, even among the wealthiest of elites.  More people are forced to seek the same services, at higher cost, in other countries as they become less available in their own.

Eventually, the exodus of highly educated white collar workers will lead to mass exodus of others in the same countries.  Because the skills and talents needed to maintain socioeconomic institutions can no longer be found, others are forced to move to other countries just to maintain their previous standard of living.  More openness toward immigrants mean that they will be welcomed in foreign countries,hastening their departure.  Ultimately, only those who have absolutely no resources whatsoever to leave will remain in poor countries, presiding over economic backwaters with no hope of future improvements.

Today, the only thing that prevents such a vicious cycle from taking place is the restriction on immigration among the world's rich countries.  Talented individuals are forced to remain in unproductive, low-paid positions (if they can find opportunities to use their specialized skills at all) in their poor home countries because they are unable to emigrate to richer ones.  If they have the opportunities to do so, there is little doubt that the vast majority of them, lured by wages dozens of times higher and opportunities hundreds of times more abundant, will quickly leave their homelands.  Desire to help their own countries will play a minor role in the calculation.

While rich countries will, as the Economist correctly argues, will receive an economic bonanza from receiving more immigrants, poor countries will suffer in tandem.  Cheaper, more high quality services in rich countries will be mirrored by more expensive, and often complete lack of, the same services in poor countries.  More innovation and productivity spurred by highly motivated immigrants in the developed world will be offset by stagnation and institutional erosion within the developing world.  Openness to immigration is just as good of a benefit for destinations as they are a malicious curse for the sources.

Many liberal internationalists of the rich world today have become tied to the cause of immigrants, arguing for their better treatments and more intake in their home countries.  While their arguments are sugarcoated in terms of altruistic support for poor Third World brethrens seeking better lives abroad, their voices may, unbeknownst to themselves, be a selfish one.  Their cause to bring more qualified immigrants to their own countries will at the end, destroy these immigrants' birth countries, depriving them of the talents and skills needed to develop and catch up to the rich world.  

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