In the days of global protectionism

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Increased restrictions on international migration by the host countries may exacerbate food security in high-migrant source countries like Bangladesh, an international food policy think tank IFPRI alerted last week. The Washington-based food policy think tank’s alert came in a week when more than 1100 economists in the United States signed a letter sent to President Donald Trump and to US Congress urging them to avoid repeating the mistakes that worsened the Depression in the 1930s.The economic advisors to two Republican and two Democratic presidents and 15 Nobel laureates were among those urging the administration to fend off “a host of new protectionist activity, including threats to withdraw from trade agreements, misguided calls for new tariffs in response to trade imbalances, and the imposition of tariffs.”

Launching its flagship annual publication – 2018 Global Food Policy Report – in Dhaka, the International Food Policy Research Institute (IFPRI) said, “Rise of isolationism and protectionism, visible in the US withdrawal from multilateral trade and climate agreements, the UK’s ‘Brexit’ from the EU, and growing anti-immigration rhetoric in developed countries, threatens to slow progress toward the Sustainable Development Goals and improved food security and nutrition.” IFPRI surveyed over 1,000 individuals in 105 countries to know public perception about food security and globalization – 76 percent of them said tighter borders and migration restrictions will impact food security. Sixty-six percent of the respondents think recent antiglobalisation policies and rhetoric will harm the hungry and impoverished.

But IFPRI found antiglobalism is on the rise. Major events in 2017 pointed to a rise in antiglobalization sentiment in the international community. The United States announced its withdrawal from the Trans-Pacific Partnership trade agreement early in the year and later from the Paris Agreement on climate change, marking a shift away from multilateral and international agreements. In Europe, the United Kingdom continued its “Brexit” process, introducing the “Great Repeal Bill” and beginning negotiations for withdrawal from the European Union in 2019. Further, the failure to reach an agreement on a joint Ministerial Declaration at the Eleventh WTO Ministerial Conference in Buenos Aires highlighted critical setbacks, including for agriculture in terms of addressing domestic subsidies, public food stocks, and special safeguard mechanisms, which may presage a new era of isolationism and protectionist policies.

Antiglobalism and the changing global landscape may create further political and economic uncertainties, and continue to impact trade, investment, and migration. In particular, the IFPRI referred to the threatened retreat of the United States from international agreements and institutions, including the United Nations, to note that these may add to global uncertainties. As many emerging challenges faced by the international community transcend national borders, global governance will be evermore crucial to guide global norms and galvanize collective commitment and action. Whether European countries and emerging economies will step up to lead global governance efforts is an important question for the years ahead, noted IFPRI.

When borders are tightened, food and nutrition security are potentially threatened in several ways. First, it is well established that migrants who leave voluntarily enjoy higher living standards after they migrate. Migrants who were food insecure prior to leaving therefore have a better chance of being food secure postmigration; restrictions on migration would leave them food insecure. Second, households that migrants leave—source households— also tend to become better off on a per capita basis as a consequence of migration. This improvement occurs either because of remittances sent home by migrants or because the gain in consumption on a per capita basis outweighs the loss in household production. If family members cannot migrate, such households are more likely to be food insecure. Third, in the context of forced migration, reduced opportunities for permanent resettlement can expose refugees to prolonged food or nutrition insecurity and strain donor resources used to support IDP and refugee camps in protracted crises.

In the same week another UN special body IFAD released a global remittance report that comes handy to well explain why protectionism and antiglobalisation rhetoric can pose danger for economies like Bangladesh that hugely depend on remittance earned through migrant population.

Last year Bangladesh received remittance worth US$ 13.5 billion, equivalent to 6.1 percent of the country’s gross domestic product (GDP). Over the past one decade the country posted a steady remittance growth rate of 4.2 percent, though much lower than some of its South Asian neighbours – Pakistan (10.8), Nepal (9.8) and Sri Lanka (9.4) yet higher than India (3.3 percent). In Bangladesh, 65 percent of the total value of remittances goes to rural areas, according to – RemitSCOPE – the report released on May 7 by the International Fund for Agricultural Development (IFAD). It pointed out that “Rural remittances are particularly important in Asia and the Pacific because remittances ‘count’ more in small towns and villages where living expenses are lower, and typically the cost of sending remittances to rural areas is higher than to corridors linking high-volume urban markets.” Worldwide, an estimated 40 percent of the total value of remittances goes to rural areas. In Sri Lanka this percentage is as high as 82, in Nepal 81 percent, India 67 percent, Viet Nam 66 percent, Pakistan 61 percent and in the Philippines 56 percent.

If the Western protectionism and antiglobalisation give rise to a climate where voluntary migration, seeking employments abroad and sending remittance back home are not welcome then countries like Bangladesh are surely to suffer. IFPRI Country Representative for Bangladesh, Akhter Ahmed, said, “Foreign remittances from migrant Bangladeshi workers play a key role in the domestic economy and help in ensuring food security for migrant source families. Any drastic changes in international migration policies in host countries with large Bangladeshi population may pose a challenge to food security of those families.”

Remittance sent by foreign wage earners constitute over six percent of Bangladesh’s GDP with prospect of further growth in the sector provided world doesn’t move further towards the directions of protectionism, isolationism and antiglobalism. But if things do not change in right direction then Bangladesh and many of its South Asian neighbours have to work for increasing trade and commerce among the nations within the region for the collective good of the South Asian community. IFPRI’s 2018 Global Food Policy Report noted that South Asia region is one of the least integrated and suggested for better intraregional linkages and increased intraregional trade to help the region to grow. South Asia region is one of the least integrated internally – here intraregional trade accounts for only 5 percent of South Asia’s total trade, whereas it accounts for 25 percent in Southeast Asia. Similarly, intraregional investment makes up less than one percent of overall investment.

Proponents of increased restrictions on immigration and refugee resettlement make three main arguments that – increasing immigration and refugee populations will reduce the wages of native workers; immigrants and refugees commit more crimes; and last but not the least, proponents of restricting immigration and refugee resettlement point to the fiscal costs of immigration. But IFPRI debunked the hollowness of such fear-mongering. It said, evidence suggests that the size of the migration flow matters – only quite large refugee flows appear to negatively affect outcomes in labor markets among natives. For example, the Mariel boatlift in 1980, an influx of Cuban refugees into Miami that increased the labor market by about 7 percent, did not affect natives’ wages, even among high school dropouts. Substantially larger refugee flows, however, can affect employment outcomes among natives. Preliminary research demonstrates that the influx of Syrian refugees into Turkey, numbering 1.7 million by mid-2015, displaced natives from the informal sector, while increasing formal-sector opportunities among less-educated native men. Similarly, in Colombia, the displacement of rural residents from conflict-affected areas to urban areas led to lower wages among unskilled workers in cities unaffected by violence, as the share of internally displaced workers in the urban labor force rose as high as 12 percent. However, IFPRI noted, immigration can have positive effects on wages among subgroups of the population; for example, the notable increase in women’s participation in the US labor force over the past 50 years might not have been possible without immigrants available to provide labor for domestic tasks.

On the second argument that immigrants are more prone to crimes, IFPRI said the fear that refugees and other immigrants may be linked to terrorist organizations has exacerbated this concern. Studies in both the United States and the United Kingdom suggest small increases in property crime but no differences in other crime rates as a result of immigration. In the United States, perhaps the best available study uses a policy change in Arizona to examine the impact on crime of a reduction in the presence of Mexican immigrants. Immigrants were found to be associated with increased property crime, but this effect can be almost fully explained by the gender and age composition of Mexican immigrants in Arizona, who are predominantly young and male. Similarly, a study of two immigration waves into the United Kingdom from Eastern Europe found only a small increase in property crime after the first wave and a decline following the second wave. Moreover, there is no evidence to substantiate the notion that immigrants have a greater proclivity to engage in terrorist attacks than other citizens.

In response to the concern relating to the fiscal costs of immigration, IFPRI observed that often the tax contributions made by immigrants are overlooked. Since 1995, immigrants as a group have made a positive fiscal contribution to the United Kingdom, while natives, on net, cost the government more than they pay in taxes. In the United States, a 2017 report prepared by the Department of Health and Human Services, but not released by the current administration, estimated the 10-year net benefit of refugees to the US economy at US$63 billion; much of that benefit is attributable to long-term refugees who come from countries such as Viet Nam and Cambodia and earn on par with natives. Finally, a consensus report from the US National Academies of Sciences, Engineering, and Medicine concludes that immigrants not only add to fiscal revenues but also help to grow the overall economy. Clearly migrants and refugees can be positive contributors to their destination countries over time.

Reaz Ahmad is Executive Editor, United News of Bangladesh

  • DhakaCourier
  • Vol 34
  • Issue 44

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