Latvian Ministry of Foreign Affairs and OECD/ DELSA Conference THE ECONOMIC IMPACT OF EMIGRATION IN LATVIA AND THE OTHER BALTIC COUNTRIES: CHALLENGES AND POLICY IMPLICATIONS Riga, December 17, 2012 Session 1. Recent trends and Impact of Emigration from the Baltic Region Recent Trends and Economic Impact of Emigration from Lithuania Audra Sipaviciene International Organization for Migration Vilnius office

728.7 thousand people (or approx. one fifth of total population of 1990) emigrated from Lithuania during (2011 census data) Especially high emigration after joining EU (in contrast to expectations); decreased emigration during economic growth ( ); due to crisis is again on the rise/ new emigration wave (“evacuation”)after joining EU Return migration is symbolic and was diminishing during crisis Net migration approaching half million Net migration per 1000 population – the highest in EUthe highest in EU Emigration trends

Trends in International Migration in Lithuania

Emigration mode Approximately half of emigration is not reported not declared Decleared and non-decleared emigration from Lithuania , (absol. numbers)

Who are emigrants? Age composition of migrants: over 60 % form migrants are aged ; proportion of youth is further increasingaged Emigration potential – over 58 % of youth under 30 (approx.. 30% of total population) would like to move abroad for 6+ months would like to move –Impact – aging population; increasing demographic and social burden; decreasing labour force Education : 70% of emigrants have higher than secondary education (survey data) –Impact - brain drain; brain waist; waist of resources invested in education; reducing possibilities for economic development/ innovations Occupation of emigrants prior to departure: in % (85% in 2010) were unemployed; among those employed – profession in demand in Lithuania –Impact? – unemployment is increasingunemployment is increasing Social consequences (e.g. separated families, children left behind, etc.), psychological, cultural, etc.

Age of migrants and resident population

Emigration potential

Level of unemployment

Impact of emigration on Labour market Increase in wages for stayers. During economic boom created imbalance: wages increased faster than productivityincreased faster In-balance of wages of non-qualified and qualified labour (additional push factor for highly qualified) Changes in composition of workforce: decrease in low-skilled workers (demand remains)composition of workforce Impact on unemployment? (who leaves – active, business oriented, those who can and do want to work/ do not want to live on social benefits) - Missed opportunities? Impact on social welfare system? – welfare recipiency increased in times, - both in terms of beneficiaries and expenditures

Economic Impact (cont.) Remittances: considerable support to the economy, families, lessening social tension, but...Remittances Consumption, not investment Remittance “addict” (demotivation of employment) Money flows in opposite direction (e.g. for UK – over 75 %) Impact of Returns: too small to make an impact; non- investigated

Work productivity and wages Work productivity (values added for one worked hour, LTL) 27,231,034,731,533,937,6 Changes (comparison with previous year, %) 12,913,911,9-9,227,6210,9 Average monthly wage (LTL) 1495,71802,42151,72056,01988,12045,9 Changes (comparison with previous year, %) 17,220,519,3-4,4-3,32,9

Composition of workforce

Remittances

Instead of Conclusion EU position – encourage mobility/ aim – by 2020 to reach 20% Lithuania is already there (in terms of emigration) But… –Mobility as free choice/ temporary/ returning with new expertise, etc. Consequences: win – win – win –Mobility as economic necessity/ survival strategy/ turning into de facto emigration (irreversible) Consequences: win – win? – loss The problem – how to turn –Win? -> win! –Loss -> win

16 Thank you! For contacts: Audra Sipaviciene Head, IOM Vilnius Office Jaksto 12, 4th floor, Vilnius 01105, Lithuania tel.: Fax: iom.lt

Government response No unambiguous Government statement/ position regarding emigration; Lithuania does not have one single document establishing a policy on issues related to emigration, return migration and other issues related to movement of persons. —Economic Migration strategy (implementation stopped in ) —Immigration strategic guidelines (2007) – non-binding political document; no further practical steps related to conversion of this political document into Action plan —Strategy “Global Lithuania” (main goal – maintaining ties with diaspora; introduced a new approach to emigrant citizens/ they may be useful when residing not only in Lithuania, but also abroad; limited measures to encourage return) —Little to no revision of immigration policy, priorities; Immigration policy does not reflect imminent demographic and labour market problems and needs

What should be done? Emigration is a diagnosis and needs to be addressed via its determinants, consequences, missed opportunities, etc. in Lithuania. Therefore: –Stop investing into illusions that emigrants will at some point return in any case (“just like in Ireland”); –Work with diasporas – e.g. supporting language training in emigrant communities, cultural events is very needed, but not enough (and not essential) measures to encourage return; –Clearly define to which extent and under what conditions/ how immigration could be used to compensate emigration losses and negative consequences –Immigration policy should be considered not only as the “compensation for migration losses” and “hole repair” policy, but also addressing future needs, highly qualified immigrants and investors, who could facilitate return migration. –Migration policy should be tuned with Lithuanian strategic social economic development goals (e.g. talking about knowledge society presupposes having clear position regarding attraction of highly qualified specialists and researchers, etc.) –In parallel work with Lithuanian residents is needed, - public opinion poll surveys show rather negative attitude of Lithuanian population towards immigrants.