INTEGRATED APPROACHES TO SUSTAINABLE DEVELOPMENT PRACTICE Policy Coherence: Migration, Trade, Aid, and Development Milena Novy-Marx, Ph.D. John D. and Catherine T. MacArthur Foundation February 26, 2008

Overview  1. Impacts of Trade and Migration on Development  2. Policy Coherence: Why it Matters  3. Examples of Incoherence United Kingdom and Migration of Health Workers Philippines Agricultural policy in wealthy countries US, Mexico, and North American Free Trade Agreement  4. Solutions UK Commonwealth Code of Practice Global Forum for Migration and Development 5. Conclusion 6. Discussion Questions

Impacts of Trade on Development  Presumption that freer trade promotes economic growth and development  Comparative Advantage  Increased efficiency  Freer trade will not promote growth absent basic founding conditions  Market imperfections in poorest countries  Lack of basic infrastructure, credit markets  Undeveloped human resources, disease burden, low agricultural productivity

Migration and Development  Worldwide: 200 million international migrants or 3% of global population  Increasing complexity of migration  Half of all migrants are women  Wage and demographic and imbalances between “North” and “South” create push and pull factors  Paradigm shift to potential positive impacts of migration on development  Lack of international regime for managing movement of people, protecting migrants’ rights

Impacts in Countries of Origin  Remittances totaled $206 billion in 2006 Foreign Direct Investment Development Aid Private Debt and Portfolio Equity

Impacts in Countries of Origin and Destination  Countries of Origin  Remittances – poverty reduction  Release pressure on local labor markets  Brain Drain  Diaspora: Transfers of Knowledge, Investment, Skills, Contacts, Philanthropy  Countries of Destination  Supply of needed labor (high and low-skilled)  Tax revenue  Multicultural vitality  Migrants vulnerable to abuse

Trade and Migration  Differences and Similarities between flows of goods and people  Complexity of migration due to human dimension  Gains from trade and migration are not evenly distributed

Policy Coherence: Why?  Policy Coherence is the systematic promotion of mutually reinforcing policy actions by governments  Policies on trade, aid, development and migration can be complements  Yet often countries’ policies work at cross purposes  Examples of policy incoherence:  United Kingdom’s (UK) health workforce  Philippines  Developed countries’ agricultural policy  US and the North American Free Trade Agreement (NAFTA)

United Kingdom: Health Workers  UK: Migration policy recruits Malawian nurses  UK’s aid agency provides aid to Malawi’s health sector  $120 million in 2004, $34 million for health in 2005  Recruitment from other low-income countries (Africa)

Countries with critical health worker shortages  Eventually ethical guidelines established for recruitment by national health system

Philippines  Promoting emigration of doctors and nurses leads to a domestic shortage in health workers  Emigration as national development strategy has compromised some development outcomes  Decline in health standards  Dependence on remittance/migration model

Developed countries’ agriculture, trade, and aid policies  Organization for Economic Cooperation and Development (OECD) development assistance promotes trade and agriculture  Agriculture a key sector for many low-income countries  Yet OECD domestic agriculture and trade policies work at cross-purposes to these goals  Subsidies for agricultural production  Tariffs on agricultural goods from low-income countries  Increase in non-tariff barriers

US and Mexico: North American Free Trade Agreement (NAFTA)  US increased border enforcement to cut migration while the free trade pact increased it  NAFTA does not address migration, subsidies  NAFTA raised pressure for migration to US  Dislocation of farmers  In short-term, freer trade increases migration  In long-term, trade and migration may be substitutes

Migration Hump Source: Philip Martin, “NAFTA and Mexico-US Migration,” 2005.

A Policy Solution: United Kingdom  Commonwealth Code of Practice  Restricts recruitment by national health service  Innovative arrangements: hospital twinnings, training  Malawi  UK increases aid to country’s health sector for more training, higher salaries  Migration of nurses to the UK declines  Challenges:  Balancing right to move with health needs of poorest  Recruitment continues by private sector

Global Forum on Migration and Development  Nascent effort to coordinate policies on migration and development within and between countries  Inter-governmental and civil society meetings to exchange information and best practices  Non-binding  Governments establish focal points within Ministries  Next Forum in Manila October 2008

Policy Recommendations  Governments should:  Establish focal points or departments in Ministries  Develop formal consultations between Ministries/agencies  Developing national policies/plans for coherence  Incorporate migration and trade in Poverty Reduction Strategy Papers (PRSPs)  Improve international coordination  Many challenges remain:  Political commitment  Policy goals often unclear  Effective government institutions and administration  Financial and human resources  Private sector can complement or work against coherence

Conclusion  Better coordinated policies on aid, migration and trade can be complementary, creating synergies for development  Challenges to implementation

Discussion Questions  What are examples of policy incoherence in your country?  Has policy coherence improved in any areas?  Is policy coherence primarily an issue for developed countries?  What lessons can be drawn from the cases discussed?  How should development be defined and measured? By the well being of individuals from a country, regardless of residence? Or by per capita income of those remaining in- country?  Should individuals have the right to migrate?

INTEGRATED APPROACHES TO SUSTAINABLE DEVELOPMENT PRACTICE Policy Coherence: Migration, Trade, Aid and Development Lecture Milena Novy-Marx