Immigration Laws: October, 2003 - Number #23

The Swiss government is pushing for a new dialogue between developing and developed countries, the Berne Initiative, which is based on viewing migration as generally beneficial, encouraging respect for the human rights of migrants, and sharing best practices in migration management.

At the end of his September 2003 UN speech, President Bush said that the world must confront sex trafficking- an estimated 800,000 women and girls are trafficked every year. Bush said: "Nearly two centuries after the abolition of the transatlantic slave trade, and more than a century after slavery was officially ended in its last strongholds, the trade in human beings for any purpose must not be allowed to thrive in our time."

The US enacted the Victims of Trafficking and Violence Prevention Act in 2000, which established sanctions for countries that the State Department determines are making too little progress toward the goals of reducing human slavery; Burma, Cuba and North Korea are being sanctioned. The State Department publishes an annual "Trafficking in Persons" report.

The United Nations lowered its world population projection for 2050 from 9.3 to 8.9 billion due to AIDS deaths and declining fertility in many developing countries; there are currently 6.3 billion people. In 2050, India is expected to have 1.6 billion people and China 1.4 billion, so that a third of the world's residents would be Indian or Chinese. The world's population is growing by 1.2 percent a year, down sharply from over two percent a year in the mid-1960s, but the disruption of family planning programs by wars in Africa more than offsets AIDS deaths. The US population is expected to rise by 45 percent to 422 million.

UNFPA issued its State of the World Population report, urging governments to do more to educated women- 31 percent of adult women are illiterate.

The UN's International Convention on the Protection of the Rights of all Migrant Workers and Members of their Families entered into force on July 1, 2003, with 22 countries having ratified the Convention, and another 10 having signed but not yet ratified it.

Remittances. Remittances to developing countries were $72 billion in 2001, more than Official Development Assistance of $55 billion, and have the advantages going directly to people in developing countries. Remittances are workers' remittances (Item 2391), compensation of employees, 2310, and migrants' transfers, 2431.

The leading recipients of remittances in 2001 were India and Mexico, $10 billion each; Philippines, $6 billion; and Morocco, Egypt and Turkey, $3 billion each- these six countries received almost half of the remittances sent to developing countries in 2001. The major sources of remittances are the US, $28 billion (with two-thirds going to developing countries); Saudi Arabia, $15 billion; and Germany, Belgium, and Switzerland, $8 billion each.

Remittances were the highest percentage of GDP in Tonga, 37 percent; followed by Lesotho, 26 percent; Jordan, 23 percent; and Albania, Yemen, and Moldova, 16-17 percent.

Migrants send remittances to their families to meet basic living costs as well as to invest, and sending country governments can increase remittances with sound economic and exchange rate policies and by taking steps to reduce what the World Bank estimated are 20 percent transactions costs. Remittances tend to rise and fall with private capital flows, but not as much, for instance, as private capital flows in Turkey and the Philippines when there were economic difficulties.

WTO. The 146 members of the World Trade Organization met in Cancun in September 2003 to liberalize trade in agriculture and services, so that the Doha round of trade negotiations ensures that "world trade works for developing countries."

Agricultural subsidies of $300 billion a year in the developed countries were the major target of developing countries. They argued that subsidized agricultural production in rich countries: (1) depressed world prices, as rich countries dumped excess production on world markets; and (2) prompted rich countries to restrict imports to protect their farmers. South African officials said: "We would give up foreign aid if the farm subsidies were eliminated."

Four West African countries targeted cotton subsidies, whose production is heavily subsidized in industrial countries and exported, keeping world prices low. US cotton producers received $3 billion in subsidies in 2002, about $200 an acre, and the EU provided $1 billion in 2002 to cotton producers, mostly in Greece and Spain.

Within the developed countries, the largest farms receive the most subsidies: in 2002, the largest 10 percent of US farms received 65 percent of farm subsidies, and the 10-year, $180 billion in subsidies farm bill signed in 2002 was widely seen as an obstacle to farm trade liberalization in Cancun. The EU spends $46 billion a year, reserves 15 percent for environmental activities, and argues that, unlike the US, its farm subsidies aim to preserve a way of life in the countryside.

It is often thought that developing countries have an absolute advantage in producing farm commodities, and the developed countries have an absolute advantage in producing manufactured goods, so that developing countries trade commodities for goods. Even if developed countries can produce both commodities and goods more cheaply than developing countries, developing countries may still have a comparative advantage in producing farm commodities because, by importing farm commodities, developed countries can export more goods. In the case of Mexico and the US, for example, the US can be better off importing strawberries from Mexico even if they can be produced more cheaply in the US, instead producing more airplanes, some of which can be exported to Mexico.

The argument in Cancun was that developed countries subsidize their farmers so much that, even if farm commodities are the comparative advantage of developing countries, they cannot earn enough to benefit from trade.

Cancun has become the largest tourist destination in the Caribbean; half of the tourists arrive on packages. In 2002, international tourism and related activities generated an estimated 200 million jobs. Europe was the top tourist destination, capturing 58 percent of arrivals in 2002; its share of the world's tourists reached a peak 75 percent in 1964.

Growth/Debt. During the 1990s, the "Washington consensus" advice for developing countries was fiscal discipline, reining in government deficits and allowing markets to set prices and allocate resources. This is being replaced by a "get growth going" mentality, so that countries such as China, Malaysia and Thailand defied standard IMF advice and grew rapidly, but often by going into debt.

The industrial countries have public debt that averages 40 percent of their GDP, but developing Asian countries have public debt that is 70 percent of GDP, and developing Latin American economies have public debt that is 60 percent of their GDP. The IMF recommends that developing countries have public debt that is less than a third of GDP.

The Chicago Climate Exchange, a market for member companies and governments to trade rights to emit gases associated with global warming, is to begin trading in November 2003. The first trades for carbon dioxide emissions averaged less than $1 a metric ton, a tenth of the levels in Europe. There is already a market for sulfur dioxide emissions in which polluters that have trouble meeting regulatory limits on emissions buy allowances from other companies that can reduce pollution, thus helping to find the cheapest way to reduce overall emissions.