Showing posts with label migration. Show all posts
Showing posts with label migration. Show all posts
Thursday, 28 December 2023
Sunday, 13 August 2023
A Level Economics: Why do the Elites in Fast Growing Countries encourage their Children to migrate away to other countries?
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A scenario where a fast-growing country's prosperous elite encourages their children to migrate to other poorly performing countries can be driven by various factors, each with its own set of motivations and consequences. While the specifics would depend on the context, here are some potential reasons for this phenomenon:
Education Opportunities: The fast-growing country might lack high-quality education systems or prestigious institutions that are available in more established nations. The elite could be sending their children abroad to access better education and academic prospects. For instance, countries like India and China have witnessed this trend, with affluent families sending their children to study in universities in the United States and Europe.
Economic Diversification: The prosperous elite might recognize that their country's economy is overly reliant on a particular industry or sector, making it vulnerable to economic shocks. By encouraging their children to migrate to countries with more diversified economies, they are aiming to provide them with opportunities in industries that might not be well-developed in their home country.
Social Mobility and Exposure: Moving to a different country can provide these children with exposure to different cultures, ideas, and networks. This exposure can broaden their horizons and potentially lead to more opportunities and innovative thinking. The elite may believe that such experiences could equip their children to contribute more effectively to their home country upon returning.
Wealth Preservation and Security: Political instability, legal uncertainties, or concerns about potential future upheavals in the fast-growing country might motivate the elite to send their children abroad. By establishing a presence in other countries, they can safeguard their family's assets and provide a secure fallback option if circumstances at home deteriorate.
Dissatisfaction with Domestic Systems: Despite the country's rapid growth, there might be deep-seated issues such as corruption, lack of basic infrastructure, or inadequate healthcare services. The elite may perceive these problems as fundamental and prefer to ensure their children's future by placing them in countries with more robust systems.
Global Connections and Networking: Migrating to other countries can help the elite's children build international networks and establish connections that could be beneficial for business and personal growth. These networks could later be leveraged to foster partnerships, investments, and collaborations that benefit the fast-growing country.
Political Considerations: In some cases, the elite might have close ties with the governments of poorly performing countries. This could lead to investment opportunities, special privileges, or favorable business conditions for their children, which might not be readily available in their home country.
For instance, consider a scenario where the elite of Country A, experiencing remarkable economic growth but lacking advanced education systems, encourage their children to study in Country B, which boasts top-tier universities and educational resources. The children might later establish connections, acquire skills, and develop a global perspective that could potentially be applied to benefit Country A's development.
In summary, the decision by a fast-growing country's prosperous elite to encourage their children to migrate to other poorly performing countries can be driven by a combination of factors such as education, economic diversification, exposure, wealth preservation, dissatisfaction with domestic systems, global networking, and political considerations. The ultimate goal is often to secure a better future for their children while potentially creating avenues for positive impact on their home country's development in the long run.
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Let's delve into real-world examples to illustrate each point more vividly:
Quality of Life Disparities: In India, despite its rapid economic growth and burgeoning tech industry, there is a stark contrast between the living conditions of the urban elite and the majority of the population. Many affluent families from India send their children to study or settle abroad, often citing concerns about air pollution, lack of reliable healthcare, and an underdeveloped public infrastructure. They believe that countries like Canada or Australia offer a healthier and more secure environment for their families.
Education Opportunities: Consider the case of South Korea, a country known for its high-pressure education system. Even though South Korea has a strong economy and technological advancements, many Korean parents send their children to countries like the United States for higher education. They view the American education system as more conducive to nurturing creativity, critical thinking, and a broader skill set beyond rote memorization.
Business Expansion and Global Networks: Chinese entrepreneurs and business magnates often encourage their children to study in the United Kingdom or the United States. By doing so, they aim to facilitate international connections that can be leveraged for business expansion. These students become part of global networks, gaining exposure to diverse markets and potential partnerships that might not be as readily available within China's domestic business environment.
Political Stability: Wealthy families in countries like Venezuela face ongoing political and economic instability. Amid hyperinflation and political uncertainty, many of these families have sent their children abroad to countries like Spain or the United States. They fear that sudden policy changes or government interventions could jeopardize their wealth and stability, prompting them to seek safer havens.
Tax and Regulatory Environment: Russian oligarchs have been known to invest heavily in Western countries, including the United Kingdom. While Russia has seen economic growth driven by its vast natural resources, some of its affluent citizens invest abroad to take advantage of more favorable tax regimes and business-friendly regulations in the West.
Opportunities for Social Mobility: The Gulf Cooperation Council (GCC) countries, like the United Arab Emirates, have experienced substantial economic growth due to oil reserves. However, in these countries, social mobility can be limited by factors such as a reliance on expatriate labor and a heavily regulated job market. As a result, some wealthy families send their children to Western countries for education and career opportunities that offer greater mobility and personal growth.
Environmental Concerns: In parts of Southeast Asia, rapid economic development has often come at the cost of environmental degradation. Wealthy families in countries like Indonesia might send their children to countries with stronger environmental regulations, like Sweden or Norway, to ensure they grow up in a cleaner, more sustainable environment.
Cultural and Lifestyle Preferences: In countries like Saudi Arabia, despite its economic advancements, some wealthy families encourage their children to study or invest in Western countries due to a desire for more liberal lifestyles and access to cultural amenities that might not be as readily available at home.
These real-world examples emphasize how the decision for prosperous elites to encourage their children to migrate to other countries is shaped by a complex interplay of economic, social, political, and personal factors. It underscores the intricacies of globalization, mobility, and the pursuit of improved opportunities and lifestyles.
Tuesday, 18 July 2023
A Level Economics 24: Migration and Labour Markets
Migration can have significant impacts on labor markets, both in the origin and destination countries. Here are some key effects of migration on labor markets:
Labor Supply:
- Increase in Available Workers: Migration can increase the overall labor supply in destination countries. Migrant workers bring additional skills, qualifications, and labor resources that can fill gaps in specific sectors or occupations facing labor shortages.
- Impact on Wages: The increase in labor supply due to migration can affect wages, particularly in sectors with a high concentration of migrant workers. If the labor supply increases more rapidly than the demand for labor, it can put downward pressure on wages in those sectors.
- Complementarity and Substitutability: Migrant workers may possess skills and qualifications that complement the existing workforce, leading to improved productivity and specialization. Conversely, they may also be seen as substitutes for native workers in certain occupations, leading to increased competition for jobs.
Labor Demand:
- Fill Skill and Labor Gaps: Migration can help address skill and labor shortages in certain industries or occupations. Migrant workers can contribute to meeting the demand for labor in sectors where there is a lack of local workers with the required skills or willingness to work in those roles.
- Sectoral Effects: Migration patterns can influence the composition of labor demand in different sectors. For example, sectors such as construction, agriculture, and healthcare often rely on migrant labor to meet seasonal or specific industry demands.
- Entrepreneurship and Innovation: Migrant workers may bring entrepreneurial skills, innovative ideas, and cultural diversity to the labor market, contributing to economic growth and fostering business development.
Wage Differentials and Remittances:
- Wage Differentials: Migration can contribute to reducing wage differentials between origin and destination countries. Migrant workers often earn higher wages in destination countries compared to what they would have earned in their home countries, which can help bridge income gaps and improve living standards.
- Remittances: Migrant workers frequently send remittances, which are monetary transfers sent back to their home countries. Remittances can have positive effects on the labor markets of origin countries by increasing household incomes, stimulating local consumption, and potentially supporting investment in education, housing, or small businesses.
Skill Drain and Brain Gain:
- Skill Drain: The emigration of highly skilled workers from origin countries, often referred to as brain drain, can lead to skill shortages and loss of human capital in those countries. This can negatively impact labor markets and hinder economic development in the origin countries.
- Brain Gain: On the other hand, migration can also result in brain gain for destination countries. Highly skilled migrants can contribute their expertise, knowledge, and innovation to local industries, research institutions, and the overall economy, leading to positive labor market outcomes.
It's important to note that the impacts of migration on labor markets can vary depending on factors such as the scale and composition of migration, labor market institutions, policy frameworks, and the social and economic context of both origin and destination countries. Careful management and policies that consider the needs and challenges of both native and migrant workers are essential to harness the potential benefits of migration while addressing any associated concerns or disruptions in labor markets.
Tuesday, 13 December 2022
Friday, 28 October 2022
Friday, 22 July 2022
Rich Indians turn secessionist, giving up citizenship. ‘Nationalism’ poor man’s burden
There are some obvious explanations for the rich and endowed Indians, who benefit the most from Indian democracy, leaving their own country writes Dilip Mondal in The Print
Successful Indians are giving up their Indian passport. What started as a trickle, now involves a much bigger volume. In 2020-21, 1.63 lakh Indians renounced their citizenship to take up foreign citizenship. This number is double compared to where it stood five years ago. The US was the preferred destination in 2021. Over 78,000 Indians acquired the American citizenship. Other preferred destinations are also mostly western countries — Australia (23,533), Canada (21,597), UK (14,637), Italy (5,986) and so on.
The question is why are these people giving up the Indian passport at a time when we are entering the ‘Amrit Kaal’, the nomenclature Narendra Modi government is using to define the period between India’s 75th Independence Day and the 100th in 2047? Don’t they love India and the Indian flag? Why are they opting to be adopted sons and daughters?
The obvious reasons
One thing is for sure: this is not a push migration. Barring exceptions, the people who decided to move are highly educated, rich and privileged. They are not making this choice because they are persecuted, or there is famine or civil war in India.
According to a report of by the London-based global citizenship and residence advisory Henley & Partners (H&P), around 8,000 High Networth Individuals or HNIs will leave India this year. And this is the exodus of the rich and educated.
There are some obvious explanations for the rich and endowed Indians, who benefited most from the Indian democracy, to be giving up citizenship. The most common explanation is that the grass is greener on the other side. Pursuit of economic gains can be a big reason for such decisions. Quality of life is also better in the West and pollution is less menacing.
Another possible reason is that, in countries like the UAE and Singapore, individual tax rates are lower than India.
When the Modi government decided to crack down on black money and tax evaders, many Indians had applied this trick — let family members remain abroad for 182 or more days. This, by rule, made them “non-residents” with foreign accounts and businesses, which could be used by family members to stash money.
Affirmative action policies in India are also blamed for the exodus of Indians and that gives a hint that which social group is mostly migrating. The Economist has written in one of its commentaries that the Brahmins are forced to leave the country because of affirmative-action policies in India. Though this argument doesn’t hold good because affirmative action is only for the government jobs, which constitutes a miniscule percentage of the entire job market. In high-paying jobs, that percentage is further reduced.
Many may also be converting their H1B visas because India doesn’t allow dual citizenship.
Having the ‘means’ to an ‘end’
My explanation for this exodus from the status of being an Indian citizen is twofold. One, successful Indians already have strong secessionist tendencies and two, they leave because only such people have means to leave.
If we check the urban elite spaces, we can easily see those secessionist tendencies of the rich. Their colonies or apartments have their own security systems, reverse osmosis water supply, private power generator sets, and even private recreational spaces. These colonies, in a way, function as separate micro nations. Their interaction with the State is manifested only when some crime or calamity happens. Most of these colonies are gated communities and RWAs are like a government there. In many metropolitan towns, RWAs in elite colonies erect gates at public roads and limit access to public parks and other government facilities.
In this case, there is a class in India that has actually become “independent” or “autonomous.” This class almost never uses government hospitals or educational facilities. It’s a big problem that they have to breathe the same air, but air purifiers have solved this problem also. Covid-19 proved to be a leveller when the elites were forced to share these spaces with the underclass, but that is one of exceptions. Under normal circumstances, there is a separate private infrastructure to cater to their requirements. This class goes abroad to spend holidays. This class sends their kids to the schools affiliated to international boards. Global citizenship and global village is not some distant idea or concept for them. There are people in India who live these concepts and migrate at the first opportunity.
Being part of this group is not at all bad. The fact is that the underclass aspires to enter these spaces not as trespassers but as legitimate members. Rich people are their role models. I am of the view that this aspiration is good and brings hope. ‘Satisfaction’ or ‘contentment’ is the word I hate. Only problem is that the Nehruvian Model of socialism never facilitated such transitions for the masses. Because of the extremely slow growth of the Indian economy in the formative decades of the nation, socialism became a model to distribute poverty. There was, in fact, not much to trickle down. The entrepreneurial potential of the nation was curbed.
I am not blaming any person for that economic catastrophe. Early years after Independence were tumultuous and the decision makers must be keeping many factors while making economic decisions. But we must admit that the State socialism model failed to produce a big middle class. Rather, large masses remained poor and lacked capacity to uplift their life. In rural India, by and large, the feudal structure continued. As contribution of agriculture in the GDP declined and population load on the agrarian economy did not reduce substantially, rural prosperity remained elusive for a large swath of masses. Despite change in course in economic policy in the 1990s, the size of Indian middle class continued to remain small. This should be a matter of utmost concern for the present policy makers. Increase in the size of the middle class is important as this will democratise the process of migration. This is an opportunity which should be available to one and all.
This brings us to the second question.
As granting citizenship in the western world, especially in the top-5 destinations for Indians, has been tightened over the years, one must have a certain financial and educational threshold to migrate to these countries. That threshold itself will put this group in the top one per cent of the Indian population. Especially, in the US, which accounts for almost 50 per cent of Indians migrating, H1B visa or other modes of long-term and permanent residency is mostly given to the highly skilled and highly paid individuals. This restriction acts as a barrier for most Indians to even think of migrating to that country.
In any case, as rich Indians are picking foreign passports and others are probably dreaming to renounce their Indian citizenship at the first opportunity, the sanctimoniousness of discourses like ‘national pride’ and ‘love for one’s own nation’ should be reframed.
With India integrating with the global economies, the national boundaries may blur more and more. Till then, the poor and underclass in India has to carry the burden of flag-waving nationalistic pride. Their role models are leaving.
Successful Indians are giving up their Indian passport. What started as a trickle, now involves a much bigger volume. In 2020-21, 1.63 lakh Indians renounced their citizenship to take up foreign citizenship. This number is double compared to where it stood five years ago. The US was the preferred destination in 2021. Over 78,000 Indians acquired the American citizenship. Other preferred destinations are also mostly western countries — Australia (23,533), Canada (21,597), UK (14,637), Italy (5,986) and so on.
The question is why are these people giving up the Indian passport at a time when we are entering the ‘Amrit Kaal’, the nomenclature Narendra Modi government is using to define the period between India’s 75th Independence Day and the 100th in 2047? Don’t they love India and the Indian flag? Why are they opting to be adopted sons and daughters?
The obvious reasons
One thing is for sure: this is not a push migration. Barring exceptions, the people who decided to move are highly educated, rich and privileged. They are not making this choice because they are persecuted, or there is famine or civil war in India.
According to a report of by the London-based global citizenship and residence advisory Henley & Partners (H&P), around 8,000 High Networth Individuals or HNIs will leave India this year. And this is the exodus of the rich and educated.
There are some obvious explanations for the rich and endowed Indians, who benefited most from the Indian democracy, to be giving up citizenship. The most common explanation is that the grass is greener on the other side. Pursuit of economic gains can be a big reason for such decisions. Quality of life is also better in the West and pollution is less menacing.
Another possible reason is that, in countries like the UAE and Singapore, individual tax rates are lower than India.
When the Modi government decided to crack down on black money and tax evaders, many Indians had applied this trick — let family members remain abroad for 182 or more days. This, by rule, made them “non-residents” with foreign accounts and businesses, which could be used by family members to stash money.
Affirmative action policies in India are also blamed for the exodus of Indians and that gives a hint that which social group is mostly migrating. The Economist has written in one of its commentaries that the Brahmins are forced to leave the country because of affirmative-action policies in India. Though this argument doesn’t hold good because affirmative action is only for the government jobs, which constitutes a miniscule percentage of the entire job market. In high-paying jobs, that percentage is further reduced.
Many may also be converting their H1B visas because India doesn’t allow dual citizenship.
Having the ‘means’ to an ‘end’
My explanation for this exodus from the status of being an Indian citizen is twofold. One, successful Indians already have strong secessionist tendencies and two, they leave because only such people have means to leave.
If we check the urban elite spaces, we can easily see those secessionist tendencies of the rich. Their colonies or apartments have their own security systems, reverse osmosis water supply, private power generator sets, and even private recreational spaces. These colonies, in a way, function as separate micro nations. Their interaction with the State is manifested only when some crime or calamity happens. Most of these colonies are gated communities and RWAs are like a government there. In many metropolitan towns, RWAs in elite colonies erect gates at public roads and limit access to public parks and other government facilities.
In this case, there is a class in India that has actually become “independent” or “autonomous.” This class almost never uses government hospitals or educational facilities. It’s a big problem that they have to breathe the same air, but air purifiers have solved this problem also. Covid-19 proved to be a leveller when the elites were forced to share these spaces with the underclass, but that is one of exceptions. Under normal circumstances, there is a separate private infrastructure to cater to their requirements. This class goes abroad to spend holidays. This class sends their kids to the schools affiliated to international boards. Global citizenship and global village is not some distant idea or concept for them. There are people in India who live these concepts and migrate at the first opportunity.
Being part of this group is not at all bad. The fact is that the underclass aspires to enter these spaces not as trespassers but as legitimate members. Rich people are their role models. I am of the view that this aspiration is good and brings hope. ‘Satisfaction’ or ‘contentment’ is the word I hate. Only problem is that the Nehruvian Model of socialism never facilitated such transitions for the masses. Because of the extremely slow growth of the Indian economy in the formative decades of the nation, socialism became a model to distribute poverty. There was, in fact, not much to trickle down. The entrepreneurial potential of the nation was curbed.
I am not blaming any person for that economic catastrophe. Early years after Independence were tumultuous and the decision makers must be keeping many factors while making economic decisions. But we must admit that the State socialism model failed to produce a big middle class. Rather, large masses remained poor and lacked capacity to uplift their life. In rural India, by and large, the feudal structure continued. As contribution of agriculture in the GDP declined and population load on the agrarian economy did not reduce substantially, rural prosperity remained elusive for a large swath of masses. Despite change in course in economic policy in the 1990s, the size of Indian middle class continued to remain small. This should be a matter of utmost concern for the present policy makers. Increase in the size of the middle class is important as this will democratise the process of migration. This is an opportunity which should be available to one and all.
This brings us to the second question.
As granting citizenship in the western world, especially in the top-5 destinations for Indians, has been tightened over the years, one must have a certain financial and educational threshold to migrate to these countries. That threshold itself will put this group in the top one per cent of the Indian population. Especially, in the US, which accounts for almost 50 per cent of Indians migrating, H1B visa or other modes of long-term and permanent residency is mostly given to the highly skilled and highly paid individuals. This restriction acts as a barrier for most Indians to even think of migrating to that country.
In any case, as rich Indians are picking foreign passports and others are probably dreaming to renounce their Indian citizenship at the first opportunity, the sanctimoniousness of discourses like ‘national pride’ and ‘love for one’s own nation’ should be reframed.
With India integrating with the global economies, the national boundaries may blur more and more. Till then, the poor and underclass in India has to carry the burden of flag-waving nationalistic pride. Their role models are leaving.
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