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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

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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

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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

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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

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Impacts in Countries of Origin Remittances totaled $206 billion in 2006

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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

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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

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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)

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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)

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Countries with critical health worker shortages

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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

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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

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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

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Migration Hump

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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

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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

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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

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

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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?