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Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

Thursday, December 8, 2022

The arrival of Venezuelans seeking better lives has strained the economies—and societies—of Latin American host countries

Venezuela’s Migrants Bring Economic Opportunity to Latin America



By Marco Arena, Emilio Fernandez Corugedo, Jaime Guajardo, and Juan Francisco Yepez


By promptly integrating migrants, the economies of host countries stand to increase their GDP by as much as 4.5 percentage points by 2030


Venezuelan Migrants Instigate Latin America's largest migration episode in history
More than 7 million Venezuelans have fled the country since 2015, with 6 million settling in other Latin American countries.  The region’s largest migration episode in history is driven by the collapse of the country’s economy, which has left Venezuelans struggling to meet their basic needs.

Between 2013 and 2021, Venezuela’s gross domestic product is estimated to have declined by more than 75 percent, the most for a country not at war in the last 50 years.  The COVID-19 pandemic compounded the country’s economic and humanitarian crisis, and in 2020 more than 95 percent of Venezuelans were living below the poverty line.

The arrival of Venezuelans seeking better lives has strained the economies—and societies—of Latin American host countries that are already balancing tight budgets, especially since the pandemic.

Colombia, which has received the most Venezuelan migrants, estimated spending about $600 per migrant in 2019.  This covered humanitarian aid, healthcare, childcare, education, housing, and job-search support.  With more than 2 million arrivals, this translates into $1.3 billion in assistance.  In 2019, this cost peaked at 0.5 percent of Colombia’s GDP.

In the long term, however, this investment has the potential to increase GDP in host countries by up to 4.5 percentage points by 2030, as we find in our latest research on the spillovers from Venezuela’s migration.

To reap the benefits from migration, host countries need to integrate the new arrivals into the formal labor force—and society—by promptly offering them work permits and access to education and healthcare.

Migration flows

After a brief interruption during the pandemic, when many countries closed their borders, migration from Venezuela has resumed and is expected to continue in the coming years, although at a slower pace.

We estimate that Venezuelan migrants will number around 8.4 million by 2025—more than 25 percent of the country’s population in 2015.

 

The characteristics of migrants have evolved as the economic crisis intensified.  The first wave of migrants were mostly professionals with high levels of education.  The second consisted of middle-class young people with a university degree.  Since the economy collapsed in 2017-2018, migrants have tended to be from low-income households and with lower levels of education.

Overall, the demographic profile of Venezuela’s migrants is like that of the local population in host countries.  Almost two-thirds are of working age and almost half are female.

Most have settled in other Latin American countries, while some have migrated to North America and Europe, mainly the US and Spain.

While Colombia remains the main destination, Chile, Ecuador, and Peru have also received sizable flows, with their combined number of migrants exceeding 2 million, more than 3 percent of the local population on average.

Effect on labor markets

Our research finds that Venezuelan migrants—many of them more educated than the local populations—face higher unemployment, are more likely to initially work in the informal sector, and earn less than the local workers. 

We didn’t find evidence that migrants are displacing domestic workers, although we have seen downward pressure on wages in the informal sector.

The wage gap between domestic and migrant workers grows with the level of education, which suggests a misallocation of human capital—workers’ skills, knowledge, and expertise—as educated migrants tend to only find unskilled jobs.  On average, domestic workers earn about 30 percent more than migrants.

Cost and benefits

Our analysis finds that providing migrants with humanitarian assistance and access to public services carries a sizable fiscal cost and puts pressure on the budgets of host countries, as the Colombia example shows.

 

But the analysis also identifies large medium-term gains in productivity and growth resulting from an increase in the labor force and better alignment of migrants’ human capital with jobs.  These gains are greater for countries that receive larger and more educated migrant flows relative to the domestic population.

We estimate that, with the right support and integration policies, migration from Venezuela has the potential to increase real GDP in Peru, Colombia, Ecuador, and Chile by 2.5 to 4.5 percentage points relative to a no-migration baseline by 2030.

 

We also project that the cost of integrating migrants would narrow over time as migrants join the labor force, increasing economic activity and expanding the tax base.

Continued support

Early in the migration crisis, countries in Latin America welcomed Venezuelan migrants and provided support in the form of visa waivers, mobility cards, and access to humanitarian assistance, healthcare, education, and childcare.  Migrants also received work permits and credentials to help them integrate into the labor market.

However, in 2018 and 2019, we saw a shift in policies as migration flows intensified.  While some countries introduced new programs to facilitate the integration of migrants, others made it harder for Venezuelans to enter by requiring additional documentation.

Countries should continue supporting migrants and helping them integrate into the formal sector so they can find jobs that are in line with their human capital and increase productivity in the economy.

This will require improving transitional arrangements and asylum systems, bringing in migrants into the health and education systems, and formalizing migrant workers by giving them work permits and accelerating the accreditation of skills and education.

To cover the costs of implementing these policies, countries should seek help from donors and international institutions.  The IMF is analyzing the impact of migration and coordinating with the United Nations High Commissioner for Refugees and other relevant agencies to help countries access funding sources.

Countries in the region should also agree on a coordinated response to the migration crisis, in which each one contributes its fair share to the support and integration of migrants.

Source

Sunday, October 26, 2014

“Economic Genocide” in Latin America: The Unspoken Legacy of Wall Street and the IMF. President Cristina Fernandez

United Nations General Assembly, September 24, 2014: Argentina's President Fernandez de Kirchner Denounces Economic Terrorism

By Carla Stea


Argentina-New-York-Court-Bankruptcy

Dazzling and supremely erudite, Argentina’s President Cristina Fernandez Kirchner denounced as terrorism the economic policies that have been strangling the developing world during the past century, and are continuing these criminal actions today, the legacy of Milton Friedman’s Chicago Boys’ gangster economic policies. These policies, implemented by the infliction of “shock therapy,” institutionalizing torture, murder and disappearances of individuals, groups, and often heads of state who defy these barbaric economic models, are policies which are more accurately described as global economic theft, sanctioned by the theory that “might makes right.”

The IMF’s “conditionalities” were described, in sanitized language, as “structural adjustment programs,” demanding the obliteration of free national education and health care programs, causing the destitution of majorities of citizens in the developing countries, and resulting in the gross indebtedness of collaborating governments to parasitic interests of multinational corporations, banks, hedge funds, vulture funds and their ilk. The Milton Friedman Chicago Boys policies were described by one of Friedman’s most brilliant students, the German born economist Andre Gunder Frank, as “economic genocide.”

President Kirchner described her late husband, President Nestor Kirchner’s success in rebuilding Argentina, despite the total bankruptcy into which decades of the Chicago Boys policies had plunged a devastated Argentina. She described the earlier chaotic situation, in which Argentina had five presidents in one week during 2001, a disaster rivaled, perhaps, only by Bolivia, which, similarly hostage of the Chicago Boys, had three revolutions in one afternoon, finally resulting Bolivia’s progressive presidency of Juan Jose Torres in 1970. President Torres was overthrown, ten months later, by fascist General Hugo Banzer, with the blessing of Washington, and was then murdered in Argentina in 1975.

The earlier history of Argentina described by President Kirchner, a history common to almost all Latin America Southern Cone governments hostage to the Chicago Boys’ policy of economic genocide, is succinctly summed up by Professor John Dinges in his work “The Condor Years,” (Pages 154-155).

[By 1975], “Inside the U.S. embassy Legal Attache Robert Scherrer quickly developed information that the Torres murder was part of the new security forces cooperation among the military governments…the bloody reality of mounting repression and the assassination of three prominent figures – the Uruguayan Senators Michelini, Gutierrez and Bolivian President Torres who had sought protection in Argentina… .Slowly, among those reading the most secret intelligence traffic about Latin America – in the embassies, in the CIA, in the Defense Intelligence Agency, the FBI and the State Department there was an awakening to a flow of hard evidence that was soon to become a flood: that by 1975 the government of Argentina was committing human rights violations on a massive scale never before seen in Latin America, and the six military governments of the Southern Cone were cooperating to assassinate one another’s opponents.”

This was the Argentina in which Presidents Cristina and Nestor Kirchner spent their earliest years. This was the environment in which the Chicago Boys’ murderous economic policies were forced down the throats of the majority of Argentina’s citizens, utilizing torture, murder and “disappearances” to facilitate the “privatization” of the country’s resources in the organized theft of the nation’s patrimony. This theft was engineered by one of history’s most deadly mobs of criminals, the Chicago Boys, trained by the sociopath Milton Friedman, who was awarded the Nobel Prize for economics in a decision grossly discrediting the legitimacy of the Nobel Committee.

President Kirchner described the economic and social recovery steered by her husband, President Nestor Kirchner, a program of social and economic inclusiveness which made education widely available to Argentina’s majority, which decreased unemployment while establishing social safety nets, a program in which Argentina’s economy began to thrive, as Nestor Kirchner weaned Argentina’s economy from the IMF ‘debt trap’ (the title of the superb book by economist Cheryl Payer), and made arrangements to pay off the astronomical debts amassed during the previous period of economic domination by the Chicago Boys, (debts for which Nestor Kirchner’s government was in no way responsible). President Cristina Fernandez Kirchner spoke with legitimate pride of Argentina’s success in reducing widespread poverty, despite the financial disaster engineered by the thugs of the international financial system who are currently still attempting to hold Argentina hostage.

President Kirchner voiced the concerns of the greater part of the developing world, which voted on September 9, 2014, for the United Nations General Assembly resolution: “Toward the Establishment of a Multilateral Legal Framework for Sovereign Debt Restructuring Process.” Argentina’s Foreign Minister, Hector Timerman (whose father, the great journalist and human rights advocate, Jacobo Timerman, had been imprisoned and tortured for two years in Argentina during that same “dirty war” of 1976 described earlier) introduced that resolution, “establishing an ethical political and legal pathway to end unbridled speculation.” The resolution was adopted, with 124 nations supporting it, eleven nations opposing it, and forty one abstentions…The scandalous profits made by parasitic “vulture funds” are funneled into campaign and lobbying to prevent change in the current viciously unjust economic architecture. The Cuban delegate stated the appalling fact that “Developing countries had paid many times the amounts originally received as loans and that devoured resources essential for development.” The distinguished American economist Joseph Stiglitz has repeatedly emphasized precisely this same fact.

President Kirchner denounced U.S. Federal Judge Thomas Griesa, whose currently strangling injunctions, prohibiting Argentina’s repayment of 92.4 percent of the debt until the “vulture funds” are paid in full, would force the return of Argentina’s economy to destitution, totally destroying the new economic and social programs which are empowering Argentina’s majority, and would quickly restore the earlier squalor of the economically colonized Argentina into which Milton Friedman’s thugs and the IMF had forced Argentina to subsist for decades of Kirchner’s earlier life.

In her masterpiece, “The Shock Doctrine,” exposing the criminal thuggery of Friedman’s Chicago Boys, Naomi Klein states:

“In the early nineties, the Argentine state sold off the riches of the country so rapidly and so completely that the project far surpassed what had taken place in Chile a decade earlier. By 1994, 90 percent of all state enterprises had been sold to private companies, including Citibank, Bank Boston, France’s Suez and Vivendi, Spain’s Repsol and Telefonica. Before making the sales, (former President) Menem and (former Finance Minister) Cavallo had generously performed a valuable service for the new owners: they had fired roughly 700,000 of their workers, according to Cavallo’s own estimates; some put the number much higher. The oil company alone lost 27,000 workers during the Menem years, An admirer of Jeffrey Sachs, Cavallo called this process “shock Therapy.” Menem had an even more brutal phrase for it: in a country still traumatized by mass torture, he called it “major surgery without anesthetic.”*

“* In January 2006, long after Cavallo and Menem were out of office, Argentines received some surprising news. It turned out that the Cavallo Plan wasn’t Cavallo’s at all, nor was it the IMF’s: Argentina’s entire early-nineties shock therapy program was written in secret by JP Morgan and Citibank, two of Argentina’s largest private creditors. In the course of a lawsuit against the Argentine government, the noted historian Alejandro Olmos Gaona uncovered a jaw-dropping 1,400 page document written by the two U.S. banks for Cavallo in which “the policies carried out by the government from ’92 on are drawn up…the privatization of utilities, the labour law reform, the privatization of the pension system. It is all laid out with great attention to detail

….Everyone believes that the economic plan pursued since 1992 was Domingo Cavallos’s creation, but that’s not the way it is.” In the long term, Cavallo’s program in its entirety would prove disastrous for Argentina.

…So many jobs were lost that well over half the country would eventually be pushed below the poverty line.”

As President Fernandez Kirchner charges, today it is obvious that U.S. Federal Judge Griesa’s ruling is an attempt to destabilize Argentina, using a new imperialist tactic devised by the current gangsters of international capitalism who thrive by devouring the lives and patrimony of the majority of citizens of the developing world, and, indeed, impose these tactics upon the “99%” percent of citizens within the countries of the developed world.

President Fernandez Kirchner explicitly denounced as economic terrorists the “vulture funds” which, supported by the United States’ judicial system, are attempting to destabilize and ultimately overthrow her government. She stated: “Not only those who place bombs are terrorists, but also those who destabilize the economy of countries, and cause hunger, misery and poverty from the sin of speculation.”

Judge Griesa is attempting, in fact, to fine Argentina $50,000 per day for not complying with his ruling, and declaring Argentina in contempt of court.” In response to his brutal arrogance, President Kirchner cited a quote from former UK Prime Minister Gordon Brown, who described such “creditors” as immoral, preventing countries from tackling problems of education, health and poverty.

Argentina’s president spoke fiercely of such engineered poverty and destitution as creating fertile breeding ground for terrorist leaders recruiting among those who have lost all hope of lives affording them options for fulfillment and dignity, and her voice echoed, 35 years later, the speech delivered on August 27, 1980 at the United Nations Eleventh Special Session on Economic Development: “Toward a New International Economic Order”: Joaquim Chissano, then Foreign Minister of Mozambique addressed the General Assembly, decades ago, and stated:

“The existing economic order is profoundly unjust. It runs counter to the basic interests of the developing countries…we see the perpetuation of underdevelopment in Africa, Asia and Latin America. The peoples of those continents are forced to face hunger, starvation, poverty, nakedness, disease and illiteracy increasingly. We denounce any kind of economic prosperity or independence for part of mankind built on the dependence, domination and exploitation of the rest of mankind…the developing countries have warned the world about the need to take measures to eliminate the main obstacles to emancipation and progress of the peoples struggling for a proper standard of living which would meet the basic needs of life.

…During the colonial period we were branded as rebels and insurgents when we demanded the restitution of our status as human beings. When we demanded independence we tried to talk peaceably with our masters, but no one would listen. The dialogue of force was imposed upon us. We took up arms. Much blood was spilt. But only in that way were we able to win.”

Twenty-nine years later, at the 64 Session of the United Nations General Assembly, on September 24, 2008, Stjepan Mesic, President of the Republic of Croatia, and the last President of Yugoslavia stated:

“Our world is finally still dominated by an economic model which is self-evidently exhausted and has now reached a stage where it is itself generating crises, causing hardship to thousands and hundreds of thousands of people. If one attempts to save this already obsolete model at any cost, if one stubbornly defends a system based on greed and devoid of any social note worthy of mention, the result can be only one: social unrest harboring the potential to erupt into social insurgence on a global scale.”

Cristina Fernandez Kirchner, President of Argentina today raises her powerful voice in, once again, the noble call for economic and social justice. Those who are guilty of perpetuating the injustices she and so many other world leaders abhor walked out of the hall as she spoke. And those are the ones who may ultimately pay the fatal price for ignoring her warning.

October 25, 2014

The Centre for Research on Globalization