The Role of State Initiatives in Outward Migration and Remittances

Migration, defined as the movement of individuals from one location to another, can be driven by various factors including security, environmental changes, political instability, economic opportunities, and the availability of services. This movement can be voluntary or involuntary and is a significant phenomenon in the era of globalization. This article examines whether state initiatives that encourage outward migration and remittance-sending can be effective tools for development, focusing on economic and political implications, and exploring migrational theories to provide a comprehensive understanding.

Understanding Migration through Theories

Migration theories provide insights into the motivations and consequences of migration. The world systems theory posits that international migration is driven not by the bifurcation of the labor market within national economies, but by the evolution of the global economic structure. Capitalist economies impact peripheral non-capitalist economies, creating a mobile population prone to migration in search of better opportunities and wealth, popularly symbolized by concepts similar to “The American Dream”.

Secondly, the network theory suggests that once initial migration occurs, the likelihood of subsequent migrations increases, creating a self-sustaining cycle. Meanwhile, the theory of cumulative causation indicates that migration induces further migration over time due to social and economic changes, often influenced by government policies. These theories collectively highlight the complex dynamics of migration and its potential for both positive and negative impacts on the origin and host countries.

The Economic Impact of Outward Migration and Remittances

Outward migration and remittance-sending can offer temporary economic relief to the origin country. Remittances create an economic link between the host and origin countries, providing financial support to families and contributing to the local economy. For example, in 2005, remittances to the Philippines amounted to $8.8 billion, illustrating the significant economic impact of this financial flow.

However, relying solely on remittances as a long-term development strategy is not sustainable. Remittances can alleviate immediate financial needs, but they do not address the underlying issues that drive migration, such as lack of economic opportunities and inadequate infrastructure. Therefore, while remittances can provide short-term benefits, comprehensive development policies are necessary to create an environment conducive to sustainable growth and development.

The Role of Returnees in Development

Encouraging return migration can be a viable alternative to promoting outward migration. Returnees bring new skills, financial resources, and social capital back to their home countries, contributing to economic development and social change. Policies that facilitate return migration can help reverse the impact of brain drain, turning it into brain gain.

Countries like India and China have implemented policies to attract returnees, such as tax reforms and investment incentives. These policies create opportunities for returnees to invest their savings and skills in their home countries, fostering economic growth and innovation. By providing a supportive environment for return migration, countries can leverage the benefits of migration while mitigating its negative impacts. Finding a balance between outward and inward migration policies - maximising and leveraging the strength of both strategies.

The Philippines provides a case study of how a country can strategically use migration to its advantage. The government has actively promoted labor export at all skill levels, particularly in the health industry. Filipino nurses, for example, are trained with the intention of working overseas, and their remittances play a crucial role in the national economy. This policy has created a culture of migration, where individuals see overseas work as a pathway to better economic opportunities and a means to support their families back home - contributing to 9.41% of its GDP.

In 2023, the top five recipient countries for remittances inflows among LMICs in current USD were India (120 billion), Mexico (66 billion), China (50 billion), the Philippines(39 billion).

Challenges and Considerations

Despite the benefits of migration and remittances, there are challenges that need to be addressed. Migration can lead to a depletion of human capital in the origin country, hindering its development. Additionally, remittances can create dependency, reducing the incentive for structural reforms and economic diversification. Remittances account for more than double the Foreign Direct Investment (FDI) aid received by LMICs.

From a political perspective, managing migration requires a delicate balance. Restricting free movement can have negative consequences, such as encouraging informal migration and exacerbating social inequalities. Therefore, migration policies must be carefully designed to support economic development while respecting individuals' rights to seek better opportunities.

A Balanced Approach for Sustainable Development

Migration and remittances can be effective tools for development when integrated into a broader strategy that includes policies to attract returnees and foster economic growth. Remittances provide essential financial support to families and communities, but they should not be seen as a permanent solution to development challenges. By creating a supportive environment for return migration and investing in infrastructure and education, countries can leverage the benefits of migration while building a sustainable and resilient economy.

State initiatives promoting out-migration and remittance-sending can be beneficial, but they must be part of a comprehensive development strategy that addresses the root causes of migration. Through balanced policies that support both outward and inward migration, countries can create opportunities for their citizens, enhance economic growth, and achieve long-term development goals.

Sources 

Debnath, Priyanka. “Leveraging Return Migration for Development: The Role of Countries of Origin A Literature Review.” KNOMAD - Global Knowledge Partnership on Migration and Development, vol. Working Paper 17, 2016, pp. 1-24. 

Hollifield, James F. Migration Theory - Talking across disciplines. Edited by Caroline B. Brettel, Third ed., New York, Routledge, 2015, https://ebookcentral.proquest.com/lib/kcl/reader.action?docID=1766907&ppg=50.

Massey, Douglas S., et al. “Theories of International Migration: A Review and Appraisal.” Population and Development Review, vol. 19, no. 3, 1993, pp. 431-466. https://www.jstor.org/stable/2938462.

Skeldon, Ronald. “Of Skilled Migration, Brain Drains and Policy Responses.” The Author Journal Compilation, 2008, pp. 2-27. http://ssrn.com/abstract=1831101. 

Stark, Oded. “Rethinking the Brain Drain.” World Development, vol. 32, no. 1, 2004, pp. 15–22. doi:10.1016/j.worlddev.2003.06.013.