Private humanitarian sponsorship

The government recently released a discussion paper, “Community Support Program“, outlining options for private sponsorship of humanitarian migrants. This has been trialed over the last two years and there was sufficient demand in the community to indicate a permanent program of over 500 people per year.

I was surprised at this given the cost, approximately $30,000 for a family of five. Yet over 650 visas were granted from July 2013 to March 2015. Interesting, Syria and Iraq were the top two countries of origin, showing the program responds to current humanitarian crises.

Migrants can only be sponsored by Approved Proposing Organisations who have to:

  • ensure the visa application charge (VAC), which is approximately $30,000 for a family of five ($19,124 for the primary application and $2,680 for each secondary applicant), is paid;
  • provide the cost of airfares and medical checks;
  • provide initial practical support to assist humanitarian entrants settle successfully; and
  • provide services which are broadly similar to those currently provided to humanitarian entrants under the Humanitarian Settlement Services programme.

This is no small undertaking in both upfront costs and ongoing support.

However I have two main points of contention with this proposal.

The main criticism is the limitations placed on sponsorship. Organisations basically need to already be providing government funded support to become eligible to privately sponsor migrants. This automatically shrinks the potential of the program. Instead of something radical, this becomes a quaint addition to the humanitarian program.

I understand why the government create eligibility barriers. They don’t want to be on the hook for when dodgy private sponsors do not provide support. This is the standard, risk-averse position any government would take. But it also shows why this idea will not thrive until there is more willingness to fail. Private sponsorship has the potential to unlock tens of thousands of new placements for humanitarian migrants but only if a new community can be galvanised to sponsor them. Restricting sponsorship to well established settlement service providers cuts this option off at the very start of the journey.

 

Lastly, if there are going to be heavy restrictions, the visa fee should be reduced. $30,000 for a family of five stinks of ‘cost recovery’ from the government. This will keep program numbers artificially low and privilege certain communities over others.

If the government really believed in a system that tilted towards private sponsorship, they would either greatly expand the number of sponsorship options with a high upfront bond to dissuade cheating or lower the visa fee to encourage more private sponsorship funneled through a small number of select providers.

Personally, I think there is merit in exploring these ideas. Yes, the government might use private sponsorship to shirk greater responsibility. But the humanitarian program has hardly shifted in decades and it took the unhinging of our asylum policy to up the number. I can at least imagine a humanitarian program of 40-50,000 in two decades time where a substantial minority is provided by private sponsorship. And that would be a good thing.

Migration and Development in an Australian Context

The development blog Devpolicy have kindly published a piece of mine, titled ‘Migration and Development in an Australian Context‘. Full text below. Devpolicy are one of the very few Australian outlets who have an active interest in how migration to Australia can stimulate development in the Pacific. I’d encourage you to read their blog whenever you get the chance.

Would you rather be rich in a poor country or poor in a rich country? Dani Rodrik asks this question in his keynote presentation [pdf] to a recent World Bank conference on migration and development.

Yet this isn’t a question at all if you only focus on income.

Rodrik shows a rich person from Niger has a representative income of $2,918 while a poor person from Norway has a representative income of $13,049. This disparity reflects the fact that “the bulk of global inequality is generated by income gaps between countries, not within countries” (for an excellent breakdown of between and within country inequality, see Branko Milanovic’s article ‘Global inequality of opportunity: how much of our income is determined by where we live’).

There is a loud public debate about inequality in Australia and only muffled whispers about the role migration might play in addressing inequality. ‘Between country inequality’ is the poor cousin of ‘within country inequality’ notwithstanding the fact that a person moving from the Solomon Islands to Australia would rank amongst the most powerful mitigating forces of global inequality.

Yet Rodrik does not propose radical solutions. He values the role of the nation-state. His conclusion – there is more opportunity for labour mobility from poor to rich countries but limits are important – points in part to a policy solution of iterative expansion and regularisation of migration pathways, carefully managed by migrant-receiving countries.

If you accept this argument, Australia is well positioned to further the migration and development agenda. Our geography allows for highly effective management of our borders. Our economy and existing migrant community stimulate demand from people across the world to migrate to Australia.

The Center for Global Development ranks Australian highly on migration as a development tool due to both a “large share of foreign students from developing countries” and a “large number of immigrants from developing countries entering Australia”.

This status quo is positive but has occurred almost completely by accident. Australia has a generous immigration framework not because it fosters development for other countries but because both major political parties in government see it as beneficial for Australia. As far as I’m aware, no Immigration Minister has set out to boost Australia’s development effectiveness by tinkering with the standard migration programs that do the heavy lifting of immigration to Australia.

The one program with an explicit mandate to boost development is the Seasonal Worker Program. The introduction of the program was recognition that there is a place for migration in Australia’s development arsenal. However as readers of this blog are all too aware, the SWP is a program lacking success to date. This is in part because it is not a standard migration program. Whatever the rhetoric about the benefits for regional Australia, the program settings erred towards a development-centric approach instead of one focused on domestic employers.

Stephen Howes has written extensively (here and here) on the changes announced last week to the Seasonal Worker Program (SWP). Taken as a whole, these changes point to a shift in how the SWP is considered by government.

For a start, the Northern Australia White Paper is not the place you would immediately think of for a detailed discussion on Pacific labour. Yet by linking Pacific labour mobility explicitly to domestic policy concerns, such as labour demand in Northern Australia, the government has reinforced a central theme of Australian immigration policy: first and foremost, success will be judged by the benefit provided to Australia and Australians. If the SWP is to succeed in Northern Australia, it will be because Northern Australia needs the SWP, not because the SWP will help Pacific development.

Some might protest that we can surely accept more migrants from poor countries because it is the right thing to do, not because it is good for Australia. Unfortunately for people who advocate from this position, the last six years of Seasonal Worker Program highlight some of the problems inherent in this approach.

While the recent changes are promising, the government still has some serious legwork to do. Advocacy and promotion to potential employers should be priority number one following the liberalisation of the regulations. The biggest risk is inaction and bureaucratic drift across multiple agencies. With working holiday visa holders likely running to exit the horticultural sector and heading straight into the tourism sector, employers will need assistance to ensure a smooth transition as possible.

As nothing catalyses action like a target, I would like to propose one: 10,000 visas granted for the Seasonal Worker Program in 2017-18, with 50 per cent going to Northern Australia. We know labour demand exists for migrants to do this work but it is backpackers who predominantly undertake it. A target of 10,000 visas for seasonal workers would not undermine opportunities for Australians and it would show a public commitment to the program, from the government directly to employers.

However not all of the changes announced in the White Paper were positive. Other changes to the working holiday visa program – to allow participants to come to Australia for two years full-time work – push the program further away from its original intention. ‘Cultural exchange’ is being replaced as the primary consideration by labour concerns. The fact this program overwhelmingly facilitates migration from developed countries should give us pause. A low-skilled labour migration program that mostly excludes developing countries is not something to expand.

Finally, it is never too early to think about what should be next. What are other potential migration pathways to encourage Pacific development while meeting the standard of net benefit to Australia? Will the government’s proposed two-year microstate visa lead to more permanent migration opportunities? Can a visa lotto program – such as the U.S. diversity lotto or the New Zealand Pacific Quota – emerge in Australia? Can migration provide effective short- and medium-term relief from natural disasters like Tropical Cyclone Pam in Vanuatu? What are the major barriers to working holiday agreements with Pacific island countries? Working through how ideas like these can be incorporated into Australia’s immigration framework should be higher on the agenda for those with an interest in Pacific development.

Would you rather be rich in a poor country or poor in a rich country?

“Would you rather be rich in a poor country, or poor in a rich country?”

Dani Rodrik asks this provocative question to set up his thesis on whether nation-states are the enemy of global equality.

By taking a top 10 GDP per capita country (Norway) and bottom 10 GDP per capita country (Niger), he demonstrates this isn’t really a question at all: In Niger, the richest five percent of the population have a representative income of $2,918 compared to a representative income of $13,049 for the poorest five percent of Norwegians.

Rodrik argues that the nation-state is central to growth and is not the enemy of global equality. However at the same time, there are good arguments for both “expanding labour mobility, at the margin” and “placing limits that would leave us far short of full mobility”. You’ve got to love economists. Yet even if you advocate for completely open borders, it strikes me you could get behind this as an incremental measure towards a more open global environment.

The point that struck me the most was: “It would be a pyrrhic victory to remove restrictions on labor mobility to the point where it weakens the capacity of nation states to provide the public goods needed for high productivity.”

If you take this as true, then perhaps the most important question in development economics and political economy is where that point is, closely followed by how we can get there. The events of 2015 appear to show that we are a long way from answering this and the risk of going backwards is firmer today than the same time last year.

H/t Chris Blattman (and read the full slide-show, it is excellent).

An Ode to the Pacific Update Conference

Fair warning, this is not a lyrical poem as the title suggests.

I wasn’t in Canberra to attend the Pacific Update conference hosted by ANU this past June. Having just discovered the website, I thought I’d share a few presentation slides I thought were interesting from the labour mobility session.

Migration and Education: The kids are doing alright

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This slide comes from a presentation called ‘Migration in Micronesia‘ by Michael Levin of the EWC Pacific Islands Program. What we see is the potential to radically and rapidly improve education outcomes via migration. In this case, Micronesians who live in Guam are more than twice as likely to have finished high school than those who live in the Federated States of Micronesia. This holds across gender. Remittances are important but over the long term, I bet education is more important for improving the lives of people.

A Growing Population: Pacific Islanders in Australia

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Australia has a growing population, driven by strong migration. Nowhere is this more evident than the movement of those in the Pacific. While Jonathan Pryke uses Ancestry (and not birthplace) for his excellent analysis of Pacific Islanders in Australia, we clearly see massive growth between the 2006 census and the 2011 census. Much of this is migration, particularly a Polynesian population who benefit from a more open immigration framework via New Zealand.

As Jonathan points out, if this growth is maintained over the coming decades, people with Pacific Island ancestry will account for up to three per cent of the population by 2040, compared to just one per cent today. This type of analysis is too rare in Australian migration research so props to the Development Policy Centre for crunching the census data.

“I don’t think much of your program and therefore I will not use it”: The Australian Seasonal Worker Program

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The reputation of the SWP is in the trash. Jesse Doyle outlines perhaps the major issue with Australia’s attempt at merging migration and development. In his presentation, ‘Australia’s Seasonal Work Program: Demand-side constraints and suggested reforms‘, he shows that 25 per cent of employers who do not use the program consider it poor or below average, with a large plurality – 42 per cent – considering it average.

How can you get employers to use a program where initial costs are slightly higher if most of them think its average or worse? The Australian horticultural industry may be shooting itself in the foot by ignoring this program given the potential productivity benefits, but the government doesn’t have to hand them the gun. Some targeted propaganda combined with a little bit of streamlining would have the SWP humming into the future.

Well done to the Development Policy Centre for putting together this conference and their ongoing commitment to researching migration and development in the Pacific.

Generating skilled migration? The Australian Pacific Technical College and labour mobility

Michael Clemens, Stephen Howes and Colum Graham have a new paper out, titled “Skill development and regional mobility: Lessons from the Australia-Pacific Technical College”.

The Australia-Pacific Technical College (APTC) was thought up by the Howard government as an alternative to an immigration pathway for Pacific labour. The authors do an admirable job of highlighting how the dual purpose of the APTC was both skill development and regional mobility yet only the first objective has been met. Does this mean the $300m spent over the past eight years has been wasted? Probably not. But this does speak to how we should judge success in development policy.

The scale of failure on fostering labour mobility under the APTC is alarming. Just 1.2 per cent of graduates from the APTC have migrated to Australia or New Zealand. Between July 2012 and March 2013, “the APTC recorded 988 new graduations but only 4 newly migrating graduates (all to Australia)—that is, 0.4% of new graduates” (p.7).

There are many parts of this excellent article but I’ll limit myself to those touching on immigration.

The paper does a public service by highlighting the cost of migration. It’s not cheap. Complying with regulatory requirements and transaction costs such as flights and visa fees runs into the thousands of dollars.

When discussing immigration policy in Australia, we often underestimate this cost as a factor in shaping migration flows.

When working at the Department of Immigration, I remember sitting in on a working group about a new fee structure for visas. A consulting firm had drawn up a framework which would raise visa fees across the board, purportedly to bring Australia into line with other similar countries (actually, it was a cash grab which raised ~$250m for a government searching for a fiscal surplus). At one point, the only trained economist in the room asked if the consultants had factored any demand elasticity into their modelling. They hadn’t. We were talking about increasing visa fees, in some cases, by 300-400 per cent and the possible impact on the movement of people was ignored. Needless to say, the economist was rather unimpressed and this highlights how the cost of migration is largely ignored, even in the Department of Immigration.

Another useful contribution in the paper is outlining how the lack of labour mobility is no mystery. The authors clearly establish there is demand to emigrate. Previous surveys and other immigration programs, such as the Pacific Access Category to New Zealand which are currently over subscribed by 900 per cent (p.9) means the lack of labour mobility is mostly falls under the headline of “supply of migration opportunities”.

When the discussion turns to the supply of migration opportunities, I think the authors get a bit off track. For instance, I’m not sure why so many words were devoted to discussing the points-tested visa. Pacific migrants with APTC certificates III and IV are highly unlikely to qualify for a points-test visa. I’ll go out on a limb and say not a single person would qualify, from over 4000 graduates. In addition, none of the graduates would meet the obligations for the Skilled Occupation List (SOL), which is not mentioned in the article. This visa pathway was never intended to facilitate labour mobility. It is for long-term, highly specialised skill shortages.

The authors discussion of sponsored visas, primarily the 457 visa, is a more appropriate avenue for APTC graduates to immigrate to Australia. That said, they get caught up almost exclusively on recognising skills. Under the 457 visa program, citizens from some countries in some occupations have to pass in-person tests, assessing their technical skills.* This is an expensive and resource intensive process. However the authors state all APTC graduates would have to undertake this test. Under policy, the only graduates of the APTC required to take the test would be citizens of Fiji and PNG. As these two countries produce about two thirds of all APTC graduates, this isn’t something to dismiss lightly but the authors should note other citizens are exempt from a formal skills recognition.

The 457 visa is the right pathway for APTC graduates. Instead of focusing exclusively on recognising skills, another factor that could have been analysed in detail include the lack of employer linkages in the Pacific. This could have been shown via existing 457 visa statistics. Despite citizens of Fiji and PNG being forced to sit technical assessments, these two countries are the only Pacific nations with a substantial presence in the 457 visa program. In March 2014, out of the 1389 visa holders in Australia from eligible APTC countries, 1289 were from Fiji and PNG, a full 92 per cent. Vanuatu, the Solomons, Tonga and Samoa each have a very small footprint of 457 visas, at less about 100 in march 2014. Exploring this seeming inconsistency might have helped draw out how to better integrate the 457 visa and APTC to foster more labour mobility. Perhaps the recognition of skills isn’t the major issue? I’m unsure but an analysis of the occupations of these visa holders might have shed more light on where exactly the barriers to labour mobility are.

Lastly, I was struck by a couple of remarks in the paper.

When talking about Global Skill Partnerships (immigrant countries subsidising emigration countries training costs), the authors state, “In such a setting, migration has the potential to become an engine of human capital creation rather than depletion.” (p.3)

By framing the argument in this way, one immediately thinks about ‘brain-drain’. “Human capital depletion” is a strong charge to level at immigration programs, even in the abstract. This seemingly undermines the argument that the movement of people is a positive, regardless of the contextual environment. The reason I raise this is that Michael Clemens is the foremost critic of the ‘brain-drain’ concept, arguing persuasively that any potential negative effects of skilled migration from developing countries are heavily outweighed by other positive factors.

Finally, the authors say, “The gains to migrants from Pacific Island states to Australia are in the hundreds of percent (McKenzie, Stillman, and Gibson 2010; Gibson and McKenzie 2012), but low-skill immigration is a political battlezone in Australia, and many Pacific Island states fear that skilled migration drains away skilled workers they need.” (p.1).

Low-skill immigration is not a political battle zone in Australia, its a political dead zone with few major supporters or prominent advocates. Some might argue the Foreign Minister, the Hon. Julie Bishop is an advocate or the ALP is an advocate as they introduced the SWP. I would argue both of these would be flawed arguments. Bishop has only said platitudes about low-skilled migration to date and any policy evidence is to be determined. The ALP introduced the SWP seemingly against its own wishes, which is why the program has ended up such as a regulatory mess.

This isn’t semantics. Without strong advocates, it is very difficult to progress unique and promising policy ideas. It’s hard to even reform existing policies, such as the APTC. The APTC was created by a dying government, bequeathed to a new government who moved towards a Seasonal Worker Program to ‘solve’ the issue of labour mobility. The authors note this in the paper but I think its a major issue of first-order of concern. A battle zone would be infinitely better than a dead zone.

Despite this, I’m optimistic. The APTC is established and producing graduates. This is the hardest part of the journey. Linking employers, in comparison, is substantially easier. There is a visa pathway which can facilitate labour mobility. While there are a few other barriers also, such as the cost to migrate and language ability, the foundations of increasing Pacific labour mobility are stronger because the APTC exists. The authors are to be congratulated to this helpful analysis and history.

* If you were thinking, that sounds odd, you’re right. The list of countries required to take a test; Brazil, China (including Hong Kong and Macau), Fiji, India, Papua New Guinea, Philippines, South Africa, Thailand, Vietnam, Zimbabwe. Note the lack of white people on this list. But that discussion is for another day.

An early celebration: 20 Timor Leste citizens head to work in Australia

The press release is title, “Timor-Leste Seasonal Workers depart for the Northern Territory”.

20 citizens from Timor Leste are departing to work in the Northern Territory under the Seasonal Work Program. Since 2012, “more than 80” Timorese have made the same journey.

Good luck to these people and it is heartening to see at least some people migrating under the Seasonal Work Program.

But this media release perfectly sums up what is wrong with the program. 80 people in two years from one of the poorest countries in the region is a terrible outcome. We should be celebrating hundreds, not handfuls, of people.

Hopefully the Chief Minister of the NT, the Australian Ambassador and the head of the Timor-Leste Employer department, each who attended the ceremony, have also advocated to the federal government about the flaws of the program and are thinking about ways they can each improve it.

Instead of success, this type of media release highlights how far is still to go regarding Pacific seasonal migration in Australia and a reminder about how public policy that does not have a political champion will often fail to meet expectations. The contrast with New Zealand’s seasonal worker program continues to be stark.

I would have penned a media release beginning with,

“While we managed to provide 20 citizens the opportunity to earn 8-10 times the local wage, we have not done enough for those who remain unable to migrate.”

Perhaps the next time we can be a little more honest.

For those interested, I broadly agree with most of the stuff on Devpolicy regarding the seasonal work program.

The role of the government for emigration and development: Timor-Leste

Typically, the migration and development agenda is stifled by governments and public opinion in OECD countries. Wary of the impact on economies, labour markets, society and culture, the rich developed world has rather entrenched values about mass immigration from poor countries. However, there are more limited examples of where developing country governments have not put in place the right set of decisions to exploit emigration opportunities.

Starting in 2008, Timor-Leste and South Korea have maintained a bilateral relationship for Timorese citizens to work in South Korea. This paper from March 2014 outlines progress and roadblocks encountered since.

The most disappointing part is this:

In the first phase, the Government of Timor-Leste through SEPFOPE sent 50 workers to South Korea. In 2011 the South Korean Government was asking for 2,500 workers, but Timor Leste was only offering 400 workers; in 2012, South Korea raised the number of employees reached to 2750 people, Timor Leste once again releasing only 500 workers. In 2013 the South Korean government demanded workers jumped up to 3,500 people, but the number which derived from the Government of Timor-Leste only reach to 280 workers.

7570 positions left unfilled in just three years. If each additional emigrant sent home $5,000 per year for their work, this is equivalent to $37,500,000 in lost remittance income. For a country of just over a million people with a GDP per capita of just US$1,068, this is a lot of money, equivalent to over 3 per cent of GDP.

Of course, there are some explanations.

To participate in the program, you must pass a Korean language test. At first, I thought this must have been Korean government policy. Except:

“SEPFOPE (a Timor-Leste government agency) has its own criterias that should be met by prospective workers to South Korea such as attending Korean language course in a few months: in fact, many workers did not pass the final exam” (Alves.P 2014).

The language test appears to be Timor government policy, not Korean. Given the potential lost income, this seems a high barrier to entry in terms of emigration. Of course many workers do not pass the final exam, presumably because its extremely difficulty to learn Korean in Timor-Leste. I’m pretty sure I couldn’t pass the test, even with an enormous amount of time invested in learning Korean.

Further, the fact the program numbers have been going backwards is a poor sign for future outcomes.

The Timor government and SEPFOPE need to do more to ensure these opportunities are not wasted in the coming years. It is pleasing to see the problems identified in this report (the lack attendance to classes, the difficultly of Korean instruction in local dialects and the lack of priority the program receives from the government). Hopefully this has set in train a process where the number of Timor emigrants can increase. Perhaps the standard of Korean could be revised downwards for some participants and monitored for any adverse consequences.

The total remittance flow to Timor was just under $3m for 2013. For a country of over a million people, this is not a large amount relative to many of developing countries. Remittances will not solve development in Timor, yet they will assist the overall trend towards better economic growth and living standards.

One of the major issues is the lack of emigration to Australia. While over a thousand workers were in South Korea in 2012 (the work visas appear to be longer a year, with overlap of annual placements), a paltry 29 made it to Australia last year under the Seasonal Work Program. This is frankly embarrassing for both governments. Timor-Leste is one of the poorest countries in the world and Australia one of the richest. The lack of built in support and facilitation of the Seasonal Work Program is something which should be rectified as soon as possible, otherwise it will simply remain an under-subscribed immigration program, useless to regional employers and potential emigrants, angering Pacific governments and an excuse for the Australian government to point to something and say, ‘see, look!’.

English language should be easier than Korean given the residual level of English knowledge in the country . Further, the existing links between Australia and Timor, while seriously frayed at the current time, should make for a more smooth facilitation of emigrants over time. What is really required are a handful of major employers to participate in the program. The Accommodation trial in the seasonal worker program, with eligibility for the entire state of Western Australia and Northern Territory, would be a good place to start.

Timor-Leste should push harder on this. Lobby the Australian government. Contact large hospitality employers in Perth. Harass DFAT about the red-tape inherent in the program. The cold politics of the current relationship should see Australia looking for avenues in which to be more amenable. While this is small fry compared to oil and gas revenue, it is an example of where a small amount of support could transform the flow of people from a rounding error to something more substantial.