05/2010: Patricia Sto Tomas And Dilip Ratha


(February-June 2010)

Building on Eurasylum’s existing monthly policy interviews, the International Organization for Migration (IOM) and Eurasylum have launched a special series on ”The Future of Migration: Building Capacities for Change”. This monthly interview series runs from February to June 2010 and aims to feed into the World Migration Report 2010, which will be dedicated fully to this policy theme. This special monthly interview series is designed, in particular, to collect the views of senior public officials, social partners and reputable academics worldwide about the needs for new capacity building measures in five major policy areas:

– Climate change (February 2010);
– Integration and Rights (March 2010);
– Labour Migration (April 2010);
– Migration and Development (May 2010); and
– Migration Governance (June 2010).

These interviews will be published in full on Eurasylum’s website and excerpts will appear, as text boxes, in the next World Migration Report, to be published by IOM in September 2010.


MAY 2010

Patricia Aragon Sto Tomas
Chair of the National Development Bank of the Philippines;
Former Secretary of Labor and Employment of the Philippines;
former GCIM Commissioner


Dilip Ratha
Lead Economist, Development Prospects Group, and Manager,
Migration and Remittances, the World Bank, Washington DC


“Migration and development: recent and unfolding experiences”


Ü IOM/Eurasylum: One of the key assumptions inherent in the Migration and Development debate is that well managed, incentive-based circular mobility between countries can enhance the positive contributions of migrants to both their home and host communities. However, the experiences of governments and migrants drawn from both circular migration (including the Mauritius-France, Ukraine-Portugal, Columbia-Spain, and Costa Rica-Nicaragua circular migration pilots) and reintegration programmes have not yet been assessed. Can you comment on some of the likely benefits of such experiments, including in terms of job matching schemes, flexible admission, visa and work permit regimes, and the financial and other incentives for return and reintegration (including reduced costs of remittance transactions)? And can you identify any capacity building measures that could help origin and receiving countries (including in the case of South-South migration) to better plan and link such programmes to national development plans and aid agreements?

Ü Patricia Aragon Sto Tomas: I can only speak about the Philippine’s experience, which I once managed. While I am no longer directly involved in the temporary migration process, I remain in government and continue to participate in discussions about policies and operational issues regarding overseas employment.

When the Middle East required manpower for its development needs in the mid-seventies, we recognized the opportunities and the inherent problems which accompanied that development boom. Early on, we saw foreign and local recruiters offering intermediation services for unwitting jobseekers and asking an arm and a leg for it. It so happened that our surplus of underemployed and unemployed college and technical institution graduates coincided with the needed skills in the oil-rich economies. We began by regulating the process of temporary migration. We had to regulate in order to protect. We identified the actors and specified what they could do and under what terms and conditions. For instance, recruiters had to be licensed. Among others things, this meant that they had to comply with business registration requirements and pay the necessary fees for licensing. At the same time, they were asked to put up bonds held in escrow by government in order to respond to any problems caused by their operations. They had to show that they had job orders verified and authenticated by our foreign offices in the receiving countries. We crafted standard employment contracts that prescribed minimum salaries for specific skills categories. Legal recruitment fees were also established and asking more than what was allowed constituted illegal recruitment which could lead to imprisonment. Over time, these regulations were tweaked as we found out what worked and what didn’t. A regulatory framework made it easier for receiving countries to deal with us. Deployment was predictable and we knew who to run after when things went wrong. Our regulatory bodies had tripartite boards composed of government, workers and employers or their representatives. The regulatory framework was complemented by a welfare system. We started fielding labor attaches and welfare officers whose jobs focused on helping workers in distress. Locally, we started requiring pre-departure orientation because the cultural differences often fuelled problems or misunderstandings. In the early years, there was a mandatory remittance requirement of 70 percent of their salaries for land-based workers and 80 percent for sea-based workers. In 1986, this requirement was repealed so that workers could send back as much as they wanted to their families, if at all. The interesting thing was that remittances grew faster without the mandatory requirements. The orderly and managed Filipino migration expanded to other areas and now extends to more than a hundred countries.

My take on this is that regulation is good but regulation plus protection is even better. As the migratory movement increased, it became more than an employment issue. It became a continuing political debate and we had to engage the host countries in discussions about recurrent issues and problems. It must be stressed that while there are international conventions pertaining to the movement of people, they are rarely binding on the countries concerned. We thus organized regular official visits, even if they did not result in agreements. However, they generated new discussions and confidence-building measures which eventually led to the signing of some agreements. We now have more than a hundred agreements with various countries and for various purposes. Where no agreements were possible, we simply had minutes of meetings that we could go back to when the need arose. Just as many problems were solved that way. I am glad for the experiments that were mentioned and I hope that they provide a sounder basis for movements across national boundaries.

The third leg of our migration management approach (the first two being regulation and protection) is reintegration. Among other things, the reintegration component recognizes the fact that contract migration is temporary. Therefore, the migrant and his/her family must be prepared for the eventual return. This includes teaching them financial planning, family solidarity, the setting up of support systems and other life skills necessary when families have to be separated because of the migration experience. We have more partners now than when we started because overseas Filipino workers (OFWs) already constitute a formidable force and are wooed by politicians and business enterprises such as banks, housing developers and retail merchants, among others. They are also allowed to vote overseas. We have played host to other countries that are building or strengthening their own capabilities and we have shown them everything that they need to see or know about our processes. There are no secrets here. My sense is that labor migration is the new face of globalization. It is a small world and perhaps world peace and understanding may be better achieved if labor and capital can move with equal ease across boundaries. And, beneath our skin, we are all the same. There will have to be rules, of course. I do not see that our migration programs are actively linked to development assistance. The developed world is not our main market. The US hosts most of our Filipino expatriates but most of them are permanent migrants who chose to acquire residency or immigrant status in much earlier times. Outside of the US, the countries that receive our workers the most are regularly visited for worker welfare and protection purposes. For instance, in some places where drinking liquor is prohibited for religious reasons or where unmarried men and women are not expected to associate publicly, many of our gregarious countrymen get into trouble for cultural crimes. We have sought and received pardon for them. And formal training and media campaigns continue in my country for orienting workers about being sensitive to differentials in laws and cultural practices. I have no doubt that in places where our workers are, there is a better appreciation for the Philippines and Filipinos and I am certain that for other countries involved in this movement, the experience cannot be significantly different.

Ü Dilip Ratha: Policy making in the area of migration is full of presumptions such as this one. Truth is, there is more circularity in migration when there is more legal permanence, and vice versa. Migrant workers with temporary visas tend to overstay their visas; and migrants with permanent residency status tend to go back and forth.

All the benefits to circular migration you mention apply to the governments in the destination countries, but they are not necessarily applicable to either the migrant workers or even their employers. Take the example of job matching: Employers like cheap workers, but they also do not like to lose workers they have trained and hire inexperienced new workers every year. Also governments do not always make accurate forecasts of labor market needs – what sectors have skills gaps; what kind of workers are needed; how many, from where, and when exactly are they needed? Employers and migrants, therefore, have a tendency to bypass government regulations and visa restrictions.

On financial returns, it is true that workers who have only temporary visas and must return after their contract will return with their savings. But how do they know whether they “must” return? On the contrary, migrants who have permanent residency or flexible entry-exit permits earn more and contribute more to their employers in the host country. They may remit a smaller portion of their income, but their incomes, and remittances, tend to be significant.

Financial incentives offered by governments to encourage return migration tend to be too small relative to the life-cycle earnings of migrants in the destination country. Incentives for re-integration, for example, small business loans or grants, also tend to be small, besides being insensitive to the weakness of the business environment in the country of origin.

The majority – nine out of ten or more – of international migrants tend to be economic migrants who go abroad to earn an income in exchange for work. Migration policies, therefore, must recognize the realities of the labor market. Policies that violate this simple guideline often result in high costs, to the governments, the employers and the migrants.

A key area of policy intervention would be gathering information, in a forward-looking manner, about skill gaps. Educating migrants and their employers about the costs and benefits of migration would help. Small investments in simple language, cultural and financial training for migrants can facilitate their integration in the destination country. Such investments can be co-financed by sending and receiving countries, or even entirely financed by receiving countries for some professions that are in high demand. Finally, to the extent that migration often results from economic disparities, a more coherent approach where migration policies are coordinated with those relating to aid, trade and security would work better than otherwise.

Ü IOM/Eurasylum: One of the on-going challenges in the design of new migration and development schemes is the persistent lack of information about the costs of such schemes and the effectiveness of anticipated outcomes such as the return and reintegration strategies. The lack of such information is clearly a major obstacle to policy reform, particularly in the origin countries. In your view, what are the key measures that could be supported to help design effective indicators to measure the development relevance of such policies?

Ü Patricia Aragon Sto Tomas: Statistical indicators would be difficult to generate unless a regulatory framework exists. In the Philippines, we know how many of our people leave, and where they are going because there is a special lane for them at the airports. They are also not charged travel taxes, for which privilege they must be processed through the Philippine Overseas Employment Administration and follow standard requirements. In the past, for instance, when one of our workers was taken by Iraqi rebels, we took the TV picture and compared it with records of the Department of Foreign Affairs and the Department of Labor. When the contract and the passport coincided, and within hours, we knew who the victim was and proceeded with the negotiations. We were also able to get to the family left behind almost immediately. On the ground, we have established family circles to keep the family intact and conserve the earnings of those who left.

Because of their earning capacity and political clout, local government units as well as national government work systematically, and in a coordinated way, at helping the families of overseas Filipino workers. Such services include setting up internet connections so that families can talk to each other regularly, assistance in paying bills etc. Filipino workers are also covered by social security and are insured against death, disability and medical emergencies for the duration of their overseas stint. What are the key measures to help design indicators to measure relevance of policies? Remittance is one. Family surveys are also welcome on top of the census data which specifically identifies OFWs as a distinct subset of data. Longitudinal tracking of random families would be helpful. Many of these are being done by academic and professional survey agencies, also as data for business plans and models that target OFWS. Administrative data sets such as migration cards, applications for tax exemptions (OFWS are income-tax exempt) are also valuable sources of indicators for testing policy relevance and success.

Ü Dilip Ratha: I suppose you are referring to the so-called “co-development” policies. The costs of such schemes should be easy to estimate. But you are right about the lack of information about the effectiveness of such schemes. As I said earlier, to succeed, such schemes must be consistent with the labor market realities, but often they are not. Lack of data and relevant information is a pervasive problem in the entire field of migration and I can think of more urgent data gathering priorities than in the area of return migration or reintegration. That said, it is true that the latter area remains under-explored. I am yet to see a good economic explanation of return decisions and how they are affected by barriers (for example, re-admission rules) or incentives to mobility. We should conduct a rigorous analysis of return decisions including some large scale surveys complemented by extensive conversations with policy makers in both sending and receiving countries.

Another fundamental question worth a serious investigation is how economic growth affects emigration and return migration. Migration trends often reverse in times of economic prosperity. Such reversals can occur at low levels of incomes. If incomes do not have to rise very high for emigration to turn into immigration, then a concerted effort to generate income and employment growth can yield large dividends in terms of migration outcomes.

Ü IOM/Eurasylum: According to a report by the OECD of November 2009, the world economic and financial crisis has had a major impact on key international labour migration patterns. The report shows, in particular, that several OECD countries have recently taken action to curb migration flows; numerical limits for temporary migration have been lowered in countries such as Korea, Italy and Spain; shortage occupation lists have been reduced and labour market tests reinforced in the UK, Spain, Canada and Australia; and there is little evidence of return migration. To what extent do you consider that such trends are likely to affect the positive effects of international migration in the coming months and years?

Ü Patricia Aragon Sto Tomas: We recognize the right of countries to restrict movements of particular categories and at specific points in time if this is contrary to their national interest. People may have the right to move but the right to enter another territory is never absolute. We have other nationals who come to the Philippines to work or open small businesses. They are welcome but they have to qualify under our requirements and they must register in order to get alien employment permits. We have to respect the laws of both receiving and sending countries relative to migration. We have our own lists too of countries which we do not allow our workers to visit or work in. We prohibit our people from working in other countries if it will expose them to danger such as war or disease or if they are being asked to perform duties inimical to health or public morals. We have in fact set up contingency plans in all countries where there are Filipinos for rescue during times of war or epidemics. All these plans are subject to revisions and dry runs to ensure that they continue to be valid for the purpose they were set up. There are cycles to migratory flows and we must be prepared for reintegration programs whenever and wherever they are necessary.

Ü Dilip Ratha: The curbs and quotas on migration flows have dampened the flow of new migrants, in some corridors by 40 or 60 percent, but they have not completely stopped new migration. On the other hand, these same curbs had a perverse effect on existing migrants’ decision to return (fearing that they won’t be able to come back if they went home). As a result, the stock of migrants has continued to grow despite the economic crisis. The persistence of migration is also a result of the fact that migrant workers tend to be flexible, hard working and cheap compared to native workers, and therefore, more attractive to employers facing pressures to cut costs. The crisis has brought this tension to the fore: should we protect native workers from competition from migrant workers, or should we protect the employers who in the end will have to be the engine of recovery?

Except for cases involving terrorism or trafficking of drugs and people, it is difficult for me to imagine a situation under which curbs on migration can have positive affects on development. Not even in the case of the so-called “ethical recruitment policies” that aim to limit the loss of skill due to migration of health professionals. Migration is primarily an economic phenomenon. Mobility helps the migrants, their families, and the employers in the destination countries. Conversely, curbs on mobility hurt every one.