Archive for June, 2010

Migration as Trade

June 22, 2010

Trade, migration and aid are similar phenomena in that they involve the crossborder movement of goods, services, money and people. Anything that enters a country, and some things that leave, are subject to national policies regarding imports and exports of goods and services including financial transactions, the payment and receipt of aid and the inflow and outflow of people. In Canada as in other developed countries trade inflows and the inflow of persons are subject to more detailed rules than outflows; in the case of aid, policy relates to outflows, although recently Tanzania identified an NGO-free month so that bureaucrats could get some work done.

Although trade, migration and aid are in many ways similar, they are treated differently for policy purposes. Exports and imports are subject to a fairly rigid and uniform policy regime, while the cross border movement of persons is more difficult to control, witness the number of illegal migrants in different countries around the world. This is not to deny the existence of the trade equivalent of illegals, namely smuggling and counterfeit goods and services which like illegals are largely unmeasurable. The third leg, aid, is funded by the Canadian government through CIDA and other government departments and channeled directly to foreign recipients or through intermediaries such as multilateral institutions and NGOs.

Trade transactions are subject to the WTO and a number of regional and bilateral trade agreements, many of which contain provisions for dispute resolution. Migration is managed by individual countries according to national laws especially the determination of who may enter and stay within a country, the counterpart to imports. In some cases, who may leave (exports) is also monitored and controlled.

One place where trade and migration policy overlap is in the GATS with three of the four different modes to deliver services from one country to another identified, for example where,
– buyer moves to seller, eg: a tourist travels abroad for a holiday
– seller moves to buyer, eg: a consultant travels abroad to advise a client, or
– the consultant establishes an office in a foreign country to deliver the service

Migration is a form of trade in that the crossborder movement of persons embodies skills, characteristics and features. The person will have a level of education, technical and language skills, possibly be a refugee from some hostile regime, may have a police record and may represent a security threat to the receiving nation. Screening the incoming person for the type of attributes desired and in order to avoid allowing entry to undesirables is a complex process requiring the evaluation of information, where the applicant will seek to hide details that will discourage their admission. Immigration lawyers and consultants advise applicants on meeting the terms and conditions of entry. Both have a financial incentive to manipulate information in order to facilitate entry for their clients, thus the existence of phony immigration consultants.

Goods trade is also screened but for other attributes, for example that trademarks are genuine, that copyright has not been infringed, that food and other products do not contain harmful ingredients and that illegal items are not permitted entry. In some instances, the screening is done by the buyer if it is discovered that the imported item is defective or unsafe. The importer may discipline the supplier by suing, not paying or by not making repeat purchases. But there will still be cases of illegal goods entering a country where the importer is only too happy to receive them if the price is cheaper or they are goods such as arms purchased by an insurgent group.

Migration – exports

Those leaving a country do so for various reasons – for tourism, to study abroad, for short business trips, to emigrate to another country and to join family members who have previously emigrated. Asylum seekers represent those seeking to leave a hostile environment. These are the main categories used in Canadian immigration statistics. What these people bring with them is lost to the exporting country, some form of brain drain plus any desirable or undesirable attributes that they possess. Later on these persons may send home financial and other remittances. Remittances appear as a line item in a country’s balance of payments as a flow from the sending to the receiving country. Strictly speaking remittances are not a payment for goods or services, unless it is for past services provided by the family in the migrant’s country of origin. They could be considered a form of capital transfer similar to foreign aid paid to individuals rather than to governments.

For some countries, remittances are equal to a large share of GDP, for example for Tajikistan 45%, Moldova 38% and Haiti 25% in 2007, with the amounts increasing during times of crisis and disaster. In the same year, remittances to Latin America and the Caribbean totaled $66.5bn, 75% from the US, an amount in excess of the sum of total foreign direct investment and official development aid to the region in that year. Reported amounts understate actual sums transferred which take place through informal hawala transactions where there is no official record kept, and form part of the underground economy. Informal remittances may equal the formal ones as transfer costs are lower. (

For Canada, remittances are reported in a longitudinal study of immigrants to Canada:

“A significant minority of immigrants from the 2000-to-2001 landing cohort remitted funds to family or friends. During the 25-to-48-month period after landing, 29% of them remitted funds, sending $2,900 on average over this 24-month period. On an annual basis, the average amount sent by remitters was approximately $1,450, accounting for about 6% of total personal income before taxes and for about 3% of total family income before taxes. Across countries of birth, 60% of immigrants from the Philippines and Haiti remitted from 25 to 48 months after landing, while about 40% to 50% of immigrants from Jamaica, Nigeria, Romania, Guyana and the Ukraine did so. Less than 10% of the immigrants from France, the United Kingdom and South Korea remitted during this period.
In terms of the admission categories through which immigrants are admitted to Canada, about30% of immigrants in all three categories remitted from 25 to 48 months after landing. However, among the individuals who did remit, economic immigrants sent somewhat larger amounts than refugees (at $3,000 and $1,900, respectively).”

Remittances are a form of export earnings and aid for the receiving country and a type of aid from the donor country, but aid which targets individuals rather than being processed through government departments and NGOs. Its effects are unknown. It may support families in developing countries for current consumption and to invest in human capital, it may make them increasingly dependent on outside resources, or lead to some combination of the above.

In sum, from the home country, migrant exports constitute a possible brain drain especially where the importing countries select persons with more education, language abilities and technical skills. Almost all Canadians are either first generation immigrants or descendants of immigrants. They are an export from their countries of origin embodying different educational and other skills representing more or less of a brain drain from their countries of origin. Remittances represent a return flow similar in some ways to aid payments.

Canada along with other countries also has a special category for immigrant entrepreneurs whereby individuals can buy their way into a country with a sufficient amount of money. In this case, the migrant arrives with financial as well as human capital both of which are a loss to the sending country.

Migration – imports

Exports from one country are imports to another. The same is true for migrants where what is removed from one country, both the “ goods” and the “bads” embodied in persons, are received as imports by another. In the case of regularly traded goods and services, imports are processed through customs authorities and are subject to health and safety requirements as well as to trademark, patent and copyright regulations. A country may also have a list of items for which entry is prohibited. In the case of goods that enter the country legally, these checks can be applied; for services, especially where they are traded electronically, enforcement of regulations is more difficult.

Corruption can be part of the process for those importing goods. In some countries being a customs official is a lucrative occupation and people pay to hold these positions. After the introduction of NAFTA, it was reported that such payments in Mexico dropped drastically as border controls were reduced.

The comparable screening mechanism for immigrants requires a completely different enforcement mechanism. Applicants for permanent residency in Canada fall into four main categories – family class, economic class, business class and refugees. The application procedures are outlined on the Citizenship and Immigration (CIC) website. They involve making application to a Canadian visa office abroad. Assistance may be purchased from immigration lawyers and consultants, the latter being anyone who describes themselves as such.

Worldwide there are eighty visa offices employing a mix of 320 Canadian based officers (268 from CIC and 52 from the Canadian Border Services Agency) and 1263 locally engaged staff, some with limited powers to screen applicants and others case analysts and clerical staff (information provided by CIC).

Family class – screening involves evaluating information on family relationships as well as for health and national security. Occasionally DNA testing will be required at the applicant’s expense for confirmation purposes.

Economic and business class – applicants are awarded points for education, language ability, professional and other skills, health and national security to determine eligibility. Business applicants must deposit a sum of money in Canada for a period of years. In effect they buy their way in.

Refugees (asylum seekers) – these either make claims at the Canadian border or from within the country. Those who arrive at the Canadian-US border are not accepted under a reciprocal agreement between the two countries. These persons are returned to the US in the case of those trying to enter Canada. Those applying from within Canada or at a non-US/Canada border point are processed under Canadian rules which have recently changed to identify certain countries as designated (safe) countries. For designated countries, there is one opportunity to appeal a deportation order and if this fails the person must leave the country – for these persons, a decision is expected within 120 days. For non-designated countries, there is a much lengthier review and appeals process so that a final decision may not be made for a number of years. If an applicant is already in Canada, it is often the result of overstaying entry as a tourist or with some form of temporary working or student visa.

The CIC website describes the changes to the asylum process and lists some of the reasons as follows:

“The proposed changes are important, because although there are many people who truly need Canada’s protection, many asylum claimants do not. Did you know that:
• in 2009, over 33,000 asylum claims were made, but only 42% of the claims finalized were accepted
• approximately 60,000 asylum claimants are currently waiting for a hearing
• decisions on asylum claims currently take an average of 19 months
• on average, it takes 4.5 years from the time an asylum claim is initially made until all the legal avenues have been exhausted and a failed asylum claimant is removed from Canada.”

As of June 2010, two pieces of legislation will amend the immigration process, Bill C-11, The Balanced Refugee Reform Act, and Bill C-37, Strengthening the Value of Canadian Citizenship Act. An amendment to the Immigration and Refugee Protection Act – The Cracking Down on Crooked Consultants Act is aimed at the practices of immigration consultants which can be costly to those applying.

Unlike imported cars, wheat or steel where each unit imported is identical or very similar to any other item in the same classification, although there can be extensive differentiation in goods trade, each applicant for permanent residency (in one of the four classes listed above) is unique requiring officials to collect and evaluate the information presented. Since most immigrants to Canada are seeking a better life for their families, they tend to come from less developed countries where documentation is poor and not easy to evaluate especially when translated from another language. Screening individuals and their family members is difficult with immigration consultants encouraging applicants to inflate or misrepresent their qualifications in the hope of improving their chances of approval. Recent legislative amendments are aimed at eliminating bogus consultants.

About 250,000 persons are admitted annually as permanent residents. These plus those who are rejected each year are screened by 320 officers with full powers and 1263 locally engaged staff with limited powers. That represents about 780 accepted applicants per full time officer each year (about 60 per month), who is also responsible for screening those not accepted. This task facing the immigration officer is considerably more time-consuming than that undertaken by a customs official.

How does Canada limit the number of acceptances to 250,000 per year? Legislation requires that all applications be accepted so there must be a rationing mechanism as applications exceed this total. One way is to limit the number of officers and offices for approval. Another is to use a first-come, first-served process and to apply a cut off when the desired annual total is reached.


Moving Millions – Coyote Capitalism

June 16, 2010

There is too much and there is not enough immigration are opposing dialogues that summarise the discourse on immigration in Canada. Those favouring immigration stress the humanitarian responsibilities of wealthier societies and the need in Canada’s case to address the demographic deficit of an ageing population and falling birth rate. Those opposed argue that immigration aggravates the level of unemployment and causes ethnic conflict when people from different cultures mix with each other and with the founding French, English and aboriginal communities. Similar arguments are heard in other countries especially in Europe and Asia. Turkish migrants to Western Europe face a hostile reception, while Japan has a policy of racial homogeneity which opposes immigration despite its obvious ageing population.

Immigration research is often one-sided. In developed countries, the focus is on its domestic impact with little consideration of the effect which it has on those countries supplying immigrants. When outward migration occurs, the possibility of a brain drain is mentioned but little suggested to mitigate the effects. Developing countries are far more aware of the loss to their economies and the low probability that emigrants will return, although they may send remittances home. In the case of the Philippines, remittances in 2008 were the second largest source of export revenues after electronics. Another ignored consequence is that any benefit from aid is negated when developed countries compete to attract the best and brightest from the aid recipients.

In a sense the mix of migration and economics has always been so, as documented in Jeffrey Kaye’s excellent new book Moving Millions, How Coyote Capitalism Fuels Global Immigration (Wiley 2010). He recounts how the long-time residents of Hazelton, Pennsylvania are reacting today to the arrival of Hispanics in exactly the same way that in earlier times residents of neighbouring coal mining communities responded to the arrival of Slavic, English, Scottish, Welsh, Irish, Italian, and Lithuanian miners from around 1875 to 1910. Their descendants have responded to the Hispanic invasion with the passage in 2006 of “one of the nation’s strictest anti-illegal immigration laws.”

Kaye’s book is based on extensive interviews with recent immigrants to the US and with those responsible both for attempting to integrate them into American society and for preventing them from entering in the case of illegals. Immigration is an international industry and one which works in the shadows as suggested by chapter titles such as “Recruitment Agencies and Body Shops,” “Smugglers as Migration Service Providers,” and “Servitude and Cash Flows.” It is not a pretty picture and, although commented on in the press, is seldom given the in-depth treatment that Kaye provides by looking at the economics and politics in both the source and recipient countries for migrants.

There are some delicious ironies reported where right wing opponents in the US and other developed countries, who deplore the social consequences of legal and illegal immigration are opposed by their right wing colleagues, who own businesses that would die without the immigrant workers. Their left wing opponents have in some instances exploited this division in order to gain recognition of the problems posed and lobby for changes to immigration policy.

Elsewhere Kaye details the operation of international supply chains that link supply to demand for all types of migrants and outlines the political pressures in both developed countries and the few international bodies that address migration issues. Most of the examples provided are from the US experience with recognition given to the movement of Africans across the Mediterranean into Europe, and those who migrate from Eastern to Western Europe as well as from Vietnam to Poland.

The book is a healthy reminder that we are all immigrants in North America including aboriginals if one goes back far enough, as they too came from somewhere else. Despite the past American civil war and current frictions, a large number of immigrants have integrated into North American society within a short time period.

Kaye recounts his own ancestry from continental Europe and the UK. Mine is a mix. My father’s ancestors came to England from what is now France sometime after 1066. I and my wife came to Canada in the 1950s. My children were born in Canada but one left to live in Thailand and has a Thai wife. They now live in Singapore and we have twin Thai-Canadian grandsons. I challenge anyone in North America and most other countries to research their ancestry and not find an immigrant connection. When deploring the present, remember the past.

Kaye’s final chapter surveys the weak international attempts to address the issues that arise in both source and recipient countries for immigrants. Economist Jagdish Bhagwati has proposed a global agency to regulate immigration policies, similar to the WTO for trade. In 1990 the UN General Assembly adopted an International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families. By 2009, 41 of 192 member states had ratified it, but none included a migrant-dependent industrialized nation.

I found this book a significant contribution to understanding global migration. Unlike most discussions it forces the reader to look at the circumstances of both sending and receiving countries in the migratory process as well as those countries through which migrants travel.

The term Coyote Capitalism in the book’s title refers less to the animal that roams the border area between Mexico and the US and more to coyote’s original meaning of “an illegitimate intermediary for cutting red tape,” a role economists will recognize. The immigration industry supply chain has similarities to what happened during prohibition with dubious intermediaries ensuring the flow of booze.

Corruption and Hypocrisy

June 1, 2010

Three events inform this title, The Girl With the Dragon Tattoo, The Cellist of Sarajevo, and Canadian politicians’ view of their accountability for spending taxpayers’ monies. Stieg Larsson, Mikael Blomkvist and Lisbeth Salander will become familiar names in Canada. Larsson is the late Swedish author whose main fictional characters are Blomkvist and Salander, private investigators who unearth a series of crimes. The siege of Sarajevo 1992 to 1996 and the resulting casualties are the focus of the second title, a novel by Steven Galloway, presently living in Canada, that links to an ongoing war crimes trial at The Hague. And the third is the May 2010 reaction of Canadian federal MPs to the proposal that the Auditor General reviews aspects of their government funded expenses. The last illustrates a lesser type of possible wrong-doing than the first two. All three demonstrate both hypocrisy and corruption.

Stieg Larsson (1954-2004) was an investigative journalist who wrote about right wing extremism following the murder of eight persons by neo-Nazis in Sweden in 1995. He and his companion were the recipients of death threats and some have questioned whether he died from natural causes. Larsson, as a writer, is compared by some to Dumas and Dickens for his description of characters and events. His final work was a Millennium Trilogy entitled “Men who hate women.” The first book is the Girl with the Dragon Tattoo which has been made into a film; the next two are The Girl Who Played with Fire and The Girl Who Kicked the Hornet’s Nest. Films of these two are due out later in 2010. The themes of the trilogy focus on corruption and hypocrisy at the highest levels in the public and private sectors.

The Cellist of Sarajevo deals with ethnic conflict and extreme violence following the declaration of independence by Bosnia Herzegovina in the former Yugoslavia and the siege of the city by Serbians. Sarajevo was and is populated by Muslims, Serbs and Croats. The attackers were Serbs so that this is not entirely an ethnic conflict but also involved a kind of civil war due to the loss of formerly Serbian territory in a part of the world where the three ethnic groups had once lived in uneasy harmony, at least until the death of Tito in 1980.The siege left an estimated 10,000 persons dead or missing and 56,000 people wounded. It allowed corrupt officials and gangsters to profit by gouging the inhabitants with high prices for items smuggled into the city. The response of the West, or the lack of it until the intervention by NATO forces, is an example of hypocrisy in the West regarding these events where civilians were the main object of the military assault. Two Serb generals have been sentenced to imprisonment and the former President is now being tried before the international court at The Hague.

The third case arose in 2010 when the federal Auditor General (AG) asked to examine the procedures used by Canadian MPs to manage their financial expenditures which were already audited by a private firm. The intent was not to repeat the audit but to see if there were ways in which the management of their expenses could be improved. The MPs rejected the AG’s offer through an all-party decision by the Committee of Internal Economy of the House of Commons, a committee which does not publish reports. The general public was astounded that MPs resisted transparency, and is overwhelmingly in support of the AG’s request. The public wants not only the programs examined but also details of the already audited expenditures. Reaction by the MPs does not pass the smell test and has alerted the public to the possibility of wrong-doing. This is unlikely to be corruption on a wide scale, because the sums involved are not large, but corruption of an embarrassing nature because monies may have been spent on things which MPs would prefer not to explain.

Elsewhere in provincial legislatures there have been recent cases of elected representatives misusing government allowances, while in the UK MPs of all parties have been caught spending their allowances on personal items. Possible corruption and definite hypocrisy are illustrated by the actions of these members, all of whom, and especially opposition MPs, ask for transparency of government spending.

Why bother to list these examples? It is not unknown for persons in power to act in their self-interest, for people to behave opportunistically or for this to extend to criminal behavior. History provides many examples. In the recent global crisis extreme cases have been uncovered such as the massive financial scams of Bernie Madoff and the actions of Enron as well as Hollinger in Canada. What is unsettling is that in reasonably open societies such as Sweden, the former Yugoslavia and Canada, the media and academia are so slow to uncover instances of wrongdoing that have been ongoing for a long time. It is almost by chance that cases are uncovered and acted upon.

In the Swedish case, Larsson was an investigative reporter but his findings on the actions of extreme right wing groups caused little public response. Persecution of the population of Sarjevo went on for a long time before the west took any action. And it took the AG not an investigative reporter to question the daily behavior of MPs, where there must be numerous persons who could leak information to the press that could spur a journalistic investigation and academic research.

There is now an enormous amount of public information stored in data bases that could be used to investigate events. Academics and reporters are slow to do the grunt work and prefer to look under lamp posts where the light shines. There are notable exceptions such as Glen McGregor, journalist with the Ottawa Citizen, who received a CAJ Award in 2010 for reporting using electronic records. Also journalists were instrumental in researching material that lead to the Oliphant inquiry into the actions of former Prime Minister Mulroney that was declared inappropriate. But there is likely much more that could be gleaned from public information sources now that electronic records exist and the internet permits widespread interaction between individuals. Perhaps the extent of corruption and hypocrisy is no worse than before but the means to spotlight both have increased.