If capital is footloose, why not labour?

Budget 2015 made an important announcement regarding the formation of a National Skills Mission through the ministry of skills and entrepreneurship. The mission will be given charge of consolidating the various skills initiatives across the board. At least one of the motives for doing so is in an attempt to harness the potential of India’s very often cited ‘demographic dividend’.

In the recent past, Prime Minister Narendra Modi has spoken of India being a skill supplier to the world. Both these announcements are essential and strategic.

With development as this government’s main objective, it is increasingly recognising and acknowledging the importance and benefits of the transnational mobility of human resources. We need this consensus at a global level.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has been promoting the ‘Business Case for Migration’, bringing the objective voice of industry to challenge the populist rhetoric discourse on international migration. Among advocates of the ‘Business Case for Migration’ are policymakers, academics, and experts. They acknowledge the importance of easier mobility of professionals and the portability of skills.

It is time this discussion on mobility of the workforce was made part of the agenda for the G-20 discussions in 2015, not least because it may feed into the post-2015 development agenda.

G20’s greatest strength has been described as integrating emerging economies in global economic governance and therefore in some ways challenging the membership of traditional institutions that do not reflect the realities of our new world (Kharas and Lombardi, 2012).

Global mobility of talent will be one of the most important processes, if not the only, impacting global economic growth rates and development outcomes in large parts of the world.

It could, if fostered sagaciously, constitute the basis for a more inclusive, and hence, less conflicted world.

There are several compelling reasons to mainstream the international migration discourse into the agenda of the G20, not least being the obvious impetus it would give to higher savings, investment and productivity.

Some of the reasons why the transnational mobility of professionals and portability of skills must be addressed by the G20 include:

Building a consensus: The G20 is a platform that seeks to drive a global agenda through consensus building and thereafter providing the political momentum required to ensure its implementation. This rightfully deserves the title of being step number one for the debate on the international mobility of people.

We need to reach a broad consensus that transnational mobility of people is good for and even necessary to maintain global economic growth rates. The current inherent contradiction in globalisation of everything but the workforce will not work for too long.

A shot at inclusion of migration in ‘global economic governance’: Freer transnational economic migration pre-supposes the need for global governance.

There have been calls for international migration to be addressed by a dedicated inter-governmental institution.

However, this hasn’t borne any results so far. Global economic governance is a part of the mandate of the G20. It can thus serve as the ideal platform that is democratic and inclusive for discussions on the global governance international migration. It can be an important first step towards a dedicated global forum.

Demographic dynamics and the global economy: There is an irrefutable and indeed irreversible demographic process at work in shaping countries, economies and thus global economic growth rates and development. Ageing societies in the global north and a burgeoning youth bulge in the south bring with them a set of new economic and social challenges.

There are large professionals supply gaps and consequent skill shortages that are severely constraining global growth. Global mobility of professionals and talent will be important and perhaps inevitable processes that will shape the direction and pace of development.

There is growing evidence for the considerable development benefits to all from freer mobility of professionals in the global economy.

Matching the demand for and the supply of skills: Just as a large number of countries have acknowledged the structural problems of labour supply gaps and skill shortages the world over, large source countries such as India are actively engaged in skill development programmes. It is important that the demand for professionals and the supply from countries with huge populations of young people who are able and willing to work is calibrated to their movement, facilitated to best meet the needs of the global economy. Geographic borders and artificial barriers should not constrain this movement, as is the case today.

The concerns about migrants taking away jobs and pushing down wages, as empirical evidence has demonstrated, are misplaced. In fact, the spillover effects of migration often result in the creation of jobs and many advantages to the countries of destination.

Entrepreneurship and innovation : Freer economic migration catalyses innovation, investment and entrepreneurship - the building blocks of sustainable development. There is evidence that technological innovation, startup businesses and entrepreneurship are directly co-related to the new ideas and higher productivity that migrants often bring to their work. There is also evidence to suggest that international migration catalyses higher rates of savings, investment and consumption thus helping to expand business and trade.

Linkages to development: It is true that remittances have a significant impact on some of the smaller countries of origin. However, the migration and development agenda has moved and should move beyond the limited space of remittances as development.

Migration has been accorded a rightful place as one of the important processes contributing to development. In a popular statement, it has been acknowledged that ‘migration is development’.

Challenges: Just like ‘free trade’ or a semblance to it comes with riders and caveats, it is important to acknowledge that the movement of people comes with challenges that are very real such as the lack of social security coordination, underemployment due to lack of recognition of skill sets, high costs of remittances, and migration itself and difficulties in integration. However, these challenges should not deter the G20 from acknowledging the importance of easier mobility of human resources.

We must acknowledge that the mobility of human resources is an opportunity and that the benefits far outweigh the costs.

The writer is secretary-general of FICCI

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