Time to buy Western Union (NYSE: FDC). The World Bank’s Global Economic Prospects for 2006 has just appeared (a 2.8mb pdf file, but ‘lighter’ versions are available here). It analyzes the huge flows of worker’s remittances, showing that even the recorded flows to developing countries are bigger than the development assistance budgets of developed countries. But, for WTO, migration may be the next ‘agriculture’.
“International remittance flows to developing countries are expected to rise to $167bn (€143bn, £97bn) this year, twice the amount of official aid paid by governments, the bank said in its Global Development Prospects report.
Unreported flows mean that remittances are probably 50 per cent greater than the recorded number, at a conservative guess, the bank said. Up to 45 per cent of total remittances are paid by migrant workers in other poor countries, it said.”(Financial Times)
In the terms of the WTO’s General Agreement on Trade in Services, the temporary movement of workers—such as construction workers or nurses or ships-hands—from one customs territory to another is known as the ‘fourth mode’ of services delivery. But it’s been one of the hardest issues to deal with in WTO; in part because many developing countries are just as obstinately opposed to liberalizing this vital trade as the developed countries.
Here’s just a taste from the Overview of the report that indicates the fascination and the difficulty of this huge, but so-far largely underground issue for the multilateral trading system:
“Over the past two decades, barriers to cross-border trade and financial transactions have fallen significantly, while barriers to the cross-border movement of people remain high. Despite its economic benefits, migration remains controversial and, for some people, threatening. In part, this is because migration, like trade and capital movements, has distrib- utional consequences, whereby net gains for society may mask important losses for some individuals and groups. But migration also sparks resistance because the movement of people has economic, psychological, social, and political implications that the movement of goods or money do not.” Global Economic Prospects, 2006
If, as I still expect, the Doha round begins finally to dismantle the absurd, historical protection of industrial country agriculture, migration may be the next major challenge for the multilateral trading system.