Monday, October 10, 2005

Globalisation's missing link

"Labour is globalisation's missing link. The flow of workers across borders is heavily impeded, leaving the global market for labour far more distorted than those for capital and commodities. The world price of capital may be set in America, and that of oil set in Saudi Arabia. But there is no such thing as a world price of labour. Wages can differ by a factor of ten or more depending only on the passport of the wage-earner, according to Dani Rodrik".

- from Be my guest, a useful piece in The Economist (6 Oct), which says the most consequential of 33 recommendations from Kofi Annan's Global Commission on International Migration is a call for more temporary migration from poor countries to rich ones.

Can it work? Reportedly, the Commission argues that the interests of rich and poor countries can be aligned. Rich countries want migrants' labour, but do not want to look after these newcomers when they grow old, never mind other political issues. 'Temporary and circular migration' is also better for poor countries because it brings more in remittances. "The longer an immigrant stays away from home, the smaller the share of his wages he sends back".

It sounds promising, in theory. Would Dani Rodrik's proposed limit - up to 3% of host country workforce - be about right? And would even the very best temporary migration schemes - assuming they're truly feasible - make sufficient or any difference to the pressures bringing people across the Sahara towards Europe?

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