GLOBALISATION AND LABOUR MIGRATION FROM INDIA: SOME ECONOMIC AND SOCIAL IMPLICATIONS

Transcription

1 Journal of Economic and Social Development, Vol. VIII, No. 1, 2012 ISSN X GLOBALISATION AND LABOUR MIGRATION FROM INDIA: SOME ECONOMIC AND SOCIAL IMPLICATIONS Giribabu. M* Manking and migration have been linked to each other since the beginning of time; life without migration could not be thought of. Migration from one country to another country has become a common phenomenon and it has a critiecal role in the employment generation and poverty reduction strategies and impinges upon diverse sections of the people in many ways. In recent years, international migration has been receiving major attention of policy makers both at national and international levels. Responding to the repidly transforming globalizing world, the nature, type, volume and direction of flows of migrants have also marked significant changes both the sending and receiving countries. Indian emigration has bbeen taking place since centuries but never before in history India witnessed such massive movements of people from India to other parts of the world as in the 20th century and in recent years. Though no firm estimates are available on international migration from India, it has been quite small relative to the India s billion plus population. Government of India, minister of labour maintains records of individuals who obtain emigration clearance to work in abroad. Keyword: Emigration, Globalisation, Brain Drain introduction Human migration is one of the most challenging issues facing the world today and migration has been receiving major attention of policy makers both at national and international levels in recent years. Responding to the rapidly transforming globalizing world, the nature, type, volume and direction of flows of international migrants have also marked significant changes. All these have thrown new challenges to the stakeholders, migrants themselves, the source, destination and transit communities and countries; and the civil society institutions including the trade unions. During the past few decades international migration has taken new strides in India. Hundreds of thousands of Indians are emigrating every year to the developed countries in search of better quality of life and higher income. Many are quitting their regular jobs for the greener pastures abroad (Subramanian, 2001). In most of the countries official route is either through the close family links or work permit. The lure of foreign jobs is so strong that many of the aspiring emigrants who do not have close family ties or work permit adopt illegal means to go abroad. In India, complete information on migration is not available even on the legal outmigration from the country. Data on international migration in the country are almost non-existent and hardly any attempt is being made to obtain data on a regular basis and in a systematic manner (Premi and Mathur, 1995). Some researchers have tried to analyse data obtained from Census and other sources to estimate the number of Indians overseas (Davis, 1951; Desai, 1963; Jain, 1982; Madhvan, 1985). It is true that globalization process has both been a cause and an effect of exponential growth in productive capacities and led to a more integrated and interdependent world. It is also equally true that the process has led to uneven growth and distribution. While the globalization process has facilitated movements of capital, goods, services and information in a significant way, movement of labour, a factor over which many developing countries enjoy comparative advantage, continues to remain highly restricted. (There has also been a growing appreciation of economic, social and cultural impacts of international migration. While migration has increasingly become a livelihood option for many, there has also been an increased * Associate Professor, Department of Economics, Nagaland University, Lumami, girihcu@gmail.com

2 98 M Giribabu recognition that appropriate policy measures are to be in place to reduce the negative consequences and increase the gains from migration). From the above background, this paper has made an attempt to analyse the economic and social implications on International migration from India. This paper is divided into four sections. The first section discusses the historical perspective and trends of international migrations from India. Section two elucidates the social and economic impacts of emigration, Section three examines the global policies and labour migration with related to recent crisis and final section contains policy strategies followed by summary and concluding remarks. Patterns of Emigration from India in Historical Perspective Emigration from India is not a new phenomenon. Indian emigration has been taking place since centuries but never before in history India witnessed such massive movement of people from India to other parts of the world as in the 19th century and 20th centuries. The composition of flows has evolved over time from mainly indentured labour in far-flung colonies to post war labour for British industry to highskilled professionals in North America and low skilled workers in the Middle East. In ancient times, Indian traders established bases around the Indian and the Pacific oceans, especially in East Africa and Western and Southeast Asia. However, those flows were not the basis for Indian migration in the 19th century or the global dispersion seen today. The British had strategic portions of India under their control by the end of the 18th century and gained control over more territory in the 19th century. Following the abolition of slavery, first by the British in 1833 and subsequently by other colonial powers such as France, the Netherlands, and Portugal, the colonies urgently needed manpower, particularly on sugar and rubber plantations. To meet this demand, the British established an organized system of temporary labour migration from the Indian subcontinent. On the labour-supply side of the equation, poverty among the South Asian peasantry accounted for the principal reason to leave the subcontinent. Labourers, mostly from rural areas, would initially sign up for a five-year contract. Many renewed their contracts, and a significant portion chose to stay permanently, deciding to accept a piece of land or a certain payment in lieu of their right to be shipped home. In response to severe criticism, the British Imperial Legislative Council abolished the indenture system in Tapping the labor surplus of South India, mostly in Tamil Nadu and Kerala the managers of tea and coffee are authorized Indian headmen, to recruit entire families and ship them to plantations. India played an important role in this system by licensing the recruiters and partly by subsidizing transportation to the plantations. In Post-Independence India, until a decision by the Supreme Court in 1966, the issuance of passports was considered a discretionary instrument of the Indian government to conduct its foreign relations. The Supreme Court established the right to travel as a fundamental right under the Indian constitution, following which the Indian parliament enacted the Passports Act of However, the act contains several provisions to refuse the issuance of a passport if the government thinks this would not be in public interest. In the first decades after independence, unskilled, skilled, and professional workers migrated from India to the United Kingdom. This is commonly attributed to Britain s post-war demand for low-skilled labour, postcolonial ties, and the United Kingdom s commonwealth immigration policy, which allowed any citizen of a Commonwealth country to live, work, vote, and hold public office in the United Kingdom. Before the British Commonwealth Immigration Acts of 1962 and 1968, Indian nationals, as Commonwealth citizens, had an unrestricted right to enter the United Kingdom. Many settled in London as well as industrial cities like Leicester and Birmingham. By the mid-1960s, most Indians coming to the United Kingdom were dependents.between 1970 and 1996, an average of 5,800 Indian immigrants landed every year in the United Kingdom (Daniel Naujoks, 2009).

3 Journal of Economic and Social Development Estimates of International Migration Migration of workers is a universal phenomenon. The origin of migration can be traced to the origin of human kind. Each year millions of women and men leave their homes and cross national boarders in search of greater security for themselves and their families. Throughout human history, migration has been a courageous expression of the individuals will to overcome adversely and to live a better life. International labour migration in developing countries has increasingly become a livelihood strategy for both men and women because of the lack of opportunities and decent work but in the face of numerous immigration barriers in destination countries, an increasing proportion choose to, or are forced to migrate under irregular situation, which has been a cause of concern for the international community. A large number of migrants are motivated by the quest for higher wages and better opportunities, responding to the demand for their skills abroad, but many are forced to move because of lack of decent work, natural disasters, violent conflict, persecution and financial or economic slowdown in the nations. The trends in the labour migration from India is shown in Table 1 and it indicates that international migration from India to other country destinations has increased from 0.16 million in 1985 to 0.85 million in 2008 and then a slow decline in the year of Government of India, Ministry of labour maintains records of individuals who obtain emigration clearance to work in abroad. The destination of Indian workers was mainly to the United States of America, United Kingdom, Middle East, Canada, South Asian countries and other developing countries. Indian migration to the Gulf countries has a history of several centuries but it received a fillip only with the discovery of oil fields and the commencement of oil drilling on a commercial basis in this region. Table 1 : Trends in Workers Emigrated from India, Year No. of Workers (in Millions) Year No. of Workers (in Millions) Source: Compiled from various annual reports of the Ministry of labour, Govt. of. India Note: Figures given above do not include persons who run business in partnership with foreigners, those who emigrated on visit visa and stayed on for job and those skilled workers and professional such as doctors and engineers who do not require emigration clearance. A vast majority of migrants to the Middle East, including Gulf countries, are semi-skilled and unskilled workers and most of them are temporary migrants who return to India after expiry of their contractual employment. There had been a consistent and steady increase in the number of persons emigrating for employment abroad from the year 2004 onwards till The year 2009 has however registered a downtrend in the number of emigrants by about 28% as compared to the previous year i.e The massive demand for labour was accounted growth in the construction industry as the Gulf countries, which became immensely wealthy overnight, embarked on a frenzy of building a new infrastructure of roads, ports 99

4 100 M Giribabu and airports, as well as schools, colleges and administrative blocks, symbols of the new wealth. The number is very small to the total emigrants reported earlier because many emigrants do not require emigration clearance from the government of India. As per the Emigration act 1983, 17 categories of persons have been exempted from emigration clearance and it has reduced to 14 categories in Figure 1 : Trends in Workers Emigrated from India, Labour Migration (Million) Similarly, the country wise distribution of labour migration from India is shown in Table.2. There are about five million overseas Indian workers all over the world. Major outflow of emigrant workers in the last few years from India has been to the Middle East, and Gulf countries where about four million workers are estimated to be employed. More than 90% of these workers are in the Gulf countries and Southeast Asia. During 2009 about 6.10 lakh workers emigrated from India with emigration clearance. Out of this, about 1.30 lakh workers went to UAE, about 2.81 lakh to Saudi Arabia, about 46,000 to Qatar and about 11,000 to Malaysia. The table reveals that the outflow to the Gulf countries is an important destination for Indian. The United Nations Publications reveals that most of the countries listed above in the Gulf region felt that the immigration levels are too high and they would like the policy of lowering the migration flow in the future. State-wise breakdown of the number of workers granted emigration clearance is available for the year between 1993 and 2009 (See Table 3.) there has been a continuous vary in the emigration of workers in almost all States during the study. Among the workers Kerala accounts for the largest number of workers, followed by Tamil Nadu, Andhra Pradesh and Rajasthan. Some of the other states having sizeable number of total labour emigrants are Karnataka, Maharashtra, Punjab, and Uttar Pradesh. One of the reason for the low labour migration southern states is that persons holding Graduate degree are exempted from emigration clearance and it has shown in the table at all India level the emigration trend has increased until 2008, followed by a slow dip with the effect of global crisis in Economic and Social Impacts on Labour Migration Migration affects, first and foremost, individuals who have chosen to live abroad. Because their decisions are fundamentally personal, they involve many elements that are outside the realm of government intervention. Despite the fact that immigrants frequently face prejudice and may be working below their capacities owing to the lack of recognition in the receiving country for their qualifications and job experiences, they seek to improve their material well-being and to gain better opportunities for their families.

5 Journal of Economic and Social Development Table 2 : Labour Outflows from India by Destination Countries Year Bahrain Kuwait Malaysia Oman Saudi Arabia UAE Others Total Year Source: Compiled from various annual reports of the Ministry of labour, Govt. of. India Table 3 : Workers Granted Emigration Clearance by Major States, Andhra Karnataka Kerala Maharashtra Punjab Rajasthan Tamil Pradesh Nadu Others Total Source: Compiled from various annual reports of the Ministry of labour, Govt. of. India

6 102 M Giribabu Migration flows exhibit both long-term shifts and short-term fluctuations in terms of volume and pattern. The root causes of these shifts and fluctuations can most generally be linked to the development. For example, the expansion of education increases aspirations among people that cannot always be met locally. The increasing access to income-earning opportunities provides the capital that allows people to move. Most importantly, the demand for labour at certain points in the global system draws migrants towards particular destinations. Also, shifts in the demographic structure of populations, which are associated with development, reinforce patterns of unequal economic growth. Remittances Table 4 : Flow of Remittances and Stock and Flow of NRI Deposits in India Year Private Transfer Receipts to India (Remittances) Outstanding NRI Deposits in India Net Inflows (Total in various NRI Deposit Schemes) US $ Billion US $ Billion INR (000Crores) US $ Billion I N R (000Crores) Source: Compiled from various annual reports of RBI and Ministry of Overseas Indian Affairs The economic effects of labour migration vary widely. Sending countries may experience both gains and losses in the short term but may stand to gain over the long term. Labour migration has the potential to serve as an engine of growth and development for all parties involved host and source countries and the migrant workers themselves. In destination countries, it has rejuvenated workforces, rendered economically viable many traditional sectors like agriculture and services, promoted entrepreneurship, supported social security and welfare schemes, and met the demand for skills for emerging high technology industries. In the developing regions where most migrants come from, positive contributions of migration are reflected in high remittance flows 1, and transfer of investments, technology and critical skills through return migration and transnational communities The employment of Indian workers abroad helps to earn foreign exchange and thereby adds to the foreign exchange reserves of the country. The private transfer of foreign exchange from the year onwards is given in Table.4. It may be observed that there has been a steady increase in the remittances from US$ 12.3 billion in to US$ 46.9 billion in It is assessed that a significant proportion of this is contributed by the increasing number of unskilled and semi-skilled Indian workers employed in

7 Journal of Economic and Social Development the Gulf countries and Malaysia. India thus continues to retain its 1st position as the leading recipient of remittances in the world. Yet India s dominant position in remittances receipts is a relatively recent one. The impact of remittances is more pronounced in parts of the country that have experienced higher volume of emigration. Fig. 2 : Flow of Remittances and Stock and flow of NRI Deposits in India Private remittances outstanding NRI Deposits Net Inflows (NRI Deposit Schemes) The other source of remittances is withdrawals from Non-Resident Indians 2 (NRI) deposit accounts. The term NRI popularly refer to members of the Indian Diaspora, including Indian citizens living abroad and people of Indian origin. Inward remittances are direct transfer of funds from one person abroad to another in India, typically through a bank or wire transfer agency. Such transfers are generally understood to provide family support. Indian banks created NRI deposit accounts exclusively for NRIs. These deposit schemes, which the government of India authorised in the 1970s, have been used to attract foreign capital when the Indian government felt the need to shore up foreign exchange reserves. For the last 10 years the local withdrawals from NRI deposit accounts have exceeded the amount of inward remittances by a ratio of 1.23:1 in Undoubtedly, India s extensive reforms of the early 1990s of economic liberalisation, globalisation allowed foreign capital in most sectors and lowered taxes and tariffs and other currency controls accelerated India s integration in to world economy and represented a larger change in the Indian mindset. Brain Drain The impact of the migration of workers on growth in the home country depends on the skills of the emigrants and labour-market conditions. If the emigrants are low-skilled, the impact on output in the home country is likely to be insignificant. On the other hand, if migrants are highly skilled 3 employed workers whose contributions to output are significant, the direct effects of migration may be negative, at least in the short term. An analysis of the magnitude of the impact of the brain drain indicates a potential negative effect on economic growth when the migration rate of the highly educated is above 20 per cent and/or the proportion of highly educated in the total population exceeds 5 per cent. Emigration of the most highly skilled is probably the most costly for sending countries in terms of the loss in innovation and creativity, which goes beyond the losses in economic productivity. Fiscal Effects Fiscal losses arise in terms of lower returns on public investments in education, as it is Governments who have funded the education of those workers who leave (the cost of training replacement workers).

8 104 M Giribabu Migration may also translate into a loss in current and future income tax revenues. For example, the migration of highly skilled Indian workers to the United States showed that, their absence had led to a potential tax revenue loss to India of $700 million, or 12 per cent of the country s personal income tax revenue in (Desai, Kapur and McHale, 2000). Table 5 : Indian Students Abroad, 1999 to % total students ( ) USA 34,504 39,084 47,411 66,836 74,603 79,736 84,044 79,219 85, % Australia 3,697 4, ,539 12,384 15,742 20,515 22,357 24, % UK 3,922 3,962 4,302 6,016 10,422 14,625 16,685 19,204 23, % Germany 1,004 1,282 1,412 2,196 3,429 4,237 4,339 3,585 3, % New Zealand ,205 1,698 1, , % Others % Total 50,870 57,612 69,193 94, , , , , , % Source: UNESCO Institute for Statistics, online database Cases of discrimination, violence and xenophobia against migrant workers In times of crisis, slack demand for labour creates the conditions of perceived competition for scarce jobs. The perception may be right or mistaken as in the case of migrant workers. Migrant workers and their families thus become victims of discrimination and fall prey to violence and xenophobia. In reality, the interests of the host societies and populations to promote social stability and the integration of migrants also become victims of such heinous acts. Human right groups feared that racist attacks might intensify and become more brutal as the economy went deeper through the slowdown. According to news reports in December 2008, a group of teenage skinheads killed 20 migrants in Moscow. The Moscow Human-Rights Bureau, a Russian NGO, reported 113 migrants murdered between January and October 2008, double the number of the previous year. Discrimination, violence and xenophobia, coupled with reduced demand for labour in times of crisis, result in migrant workers carrying out jobs at poor terms and conditions of employment. Unfortunately, information does not exist that provides evidence of such a situation. The importance of equality, non-discrimination, labour and human rights of migrant workers makes it necessary to point out examples of discrimination, violence and xenophobia to which migrant workers are subjected Global Policies and Labour Migration Under contemporary globalization, Indian international labour mobility has increased, while levels of exploitation and deregulation have accelerated. Lack of legal protection for migrant workers heightens their attractiveness as instruments of maintaining competitiveness because they are obliged to work in situations where decent work conditions are not enforced. Irregular migrants are especially vulnerable because the threat of apprehension and deportation thwarts unionizing and exposure of dangerous working conditions. Growing economic interdependence of states has been a widely acknowledged component of

9 Journal of Economic and Social Development globalization. The immediate effects on global population movements have been less easy to determine. Last year ( ) saw a downturn in the world economy resulting in recessionary pressure or severe slowdown in the economy of the major developed countries. As a result of this millions of jobs were lost across the world and downward pressure on wages. Companies in the IT and financial sectors continue to downsize and cut costs and will not likely hire more people. Migrant workers were also adversely affected. Many States have placed increasingly strict barriers on legal entry of labour migrants, yet appear to tolerate the presence of large numbers of irregular migrants, especially those working in low-paid sectors lacking offer of national workers. Many developing countries face serious social and economic dislocation associated with persistent poverty, growing unemployment, loss of traditional trading patterns, and what has been termed a growing crisis of economic security. Current practices regarding labour migration represent fundamental policy dilemmas for States, social partners, and civil society. Sectors employing irregular workers are usually those where little or no regulatory activity upholds minimum safety, health and working conditions that should ensure decent work. The absence of regulation reinforces employment of irregular migrant workers in substandard conditions, and provides incentive for shifting capital and employment from formal to informal economic activity. In one of the enduring ironies of the present times, we live in a world in which the free movement of capital, goods, and technology is seen as a virtue, but also one in which the movement of people across borders is more difficult than ever in the past. Ironically, in a rapidly globalising world, legal migration is being rendered increasingly difficult. It is in this backdrop that we must see the growing problem of illegal migration and people smuggling. 105 Policy implications Migration today is about work and it is being acknowledged as a major concern for employers, workers and labour ministries. Addressing migration means promoting employment and social protection; it especially requires (i) anti-discrimination and integration initiatives. (ii) Solidarity with migrant workers is fundamental; exclusion and disassociation from foreign workers simply facilitates situations in which migrants are exploited to the detriment of upholding decent work condition. (iii) Assuring decent treatment for migrant workers, and resolving tensions between national and foreign workers. (iv) Good migration management to transform it into an efficient, orderly and humane process is required for growing mobility of labour in a globalizing economy, emerging population and demographic dynamics, as well as enhanced security concerns and equally, there is an urgent need to address the problem of illegal migration for both social and security ramifications in the nations. (v) An informed and transparent labour migration admission system designed to respond to measured, legitimate labour needs, taking into account domestic concerns as well to reducing exploitation, trafficking and smuggling of international migrants. (vi) A Plan of action against discrimination and xenophobia to sustain social cohesion through elaborate administrative measures and procedures to ensure full implementation of legislation, and accountability of all government officials. (vii) Establishment of independent national human rights/anti-discrimination monitoring bodies, Promote respect for diversity and multicultural interaction, incorporate multi-cultural and diversity training in educational curricula and mobilize civil society cooperation. (viii) Institutional mechanisms for consultation and coordination with social partners in policy elaboration and practical implementation, to ensure coordination within governments and consultation with social partners and concerned civil society bodies on all main areas of policy concern. (ix) Adherence to basic international human rights standards, elaboration of anti-discrimination legislation and implementation of appropriate practices are shared responsibilities among government, social partners, civil society and migrants themselves

10 106 Conclusion M Giribabu International labour markets are an important part of the process of globalization and economic interdependence across countries and regions. The study on Labour migration was selected mainly because in recent years it has been increasingly provided by developing countries. In India, Migration is an important human activity and Indians have been migrating to various parts of the world voluntarily or due to some compulsions. Migrant workers have participated in promoting economic growth and prosperity and the creation of wealth in countries of destination. In the analysis of the economic and social implications from the developing countries, brain drain and remittances are the most important factors. The major shifts in the migration trends and the remittances from foreign countries have changed the economic conditions of few regions in India. However, some extent to which remittances may offset of the output losses from migrated workers, especially through high skilled labour migration in which depends upon the matrix of other variables in the development process and the country s stage of economic evolution. Recent progress is encouraging, but the challenges are huge. Only active engagement by governments as well as social partners and civil society will assure long term viability, credibility and sustainability to national and international measures to protect and assure decent working conditions for foreign and national workers alike. Notes 1. Remittances defined as monetary fund s sent by individuals working outside of their home countries to recipients in the country that they came from. 2. Non-Resident Indians (NRIs) are Indian citizens holding Indian passports and residing abroad for an indefinite period, whether for employment or for carrying on any business or vacation or for any other purpose. 3. Skilled migrants defined as those in possession of a tertiary degree or extensive specialized work experience include architects, accountants and financial experts, engineers, technicians, researchers, scientists, chefs, teachers, health professionals, and IT professionals etc. References GOI (2001), Census, Registrar General of India, Government of India, New Delhi. OIA, ( ), Annual Report, Ministry of Overseas Indian Affairs, Government of India, New Delhi. Khadria, B., (1990), Patents, Brain Drain and Higher Education: International segundo semestremigraci ón y desaro lloindia: skilled migration to developed countries Khadria, Binod. (2002). Skilled Labour Migration from Developing Countries: Study on India. International Migration Papers 49. Geneva: International Labour Office. Naujoks, Daniel. (2009). India and its Diaspora. Changing Research and Policy Paradigms. In National Paradigms of Migration Research. Dietrich Thränhardt and Michael Bommes, eds. Göttingen: V&R unipress. Desai, M.A., D. Kapur, and J. McHale. (2001). The Fiscal Impact of the Brain Drain: Indian Emigration to the U.S. Weekly Political Economy Discussion Paper. Harvard University,Massachusetts. Skeldon, Ronald (2010) The Current Global Economic Crisis and Migration: Policies and Practice in Origin and Destination Working Paper,T-32, University of Sussex. Davis, K. (1951). Population of India and Pakistan, Princeton University, Press, Princeton, New Jersey. Desai, R. (1963). Indian Immigrants in Britain, Oxford University Press, London. Jagat, K. Motwani. (1994). Twenty Million Global Indians: An Overview. Manorama Year Book Kottayam, Kerala. Jain, P.C. (1982). Indians Abroad: A Current Population Estimate, Economic and Political Weekly, Feb. 20: Madhvan, M.C. (1985). Indian Emigrants: Numbers, Characteristics, and Economic Impact, Population and Development Review, 11(3), September, Premi, M.K. and M.D. Mathur. (1995). Emigration Dynamics: The Indian Context. International Migration. 33(1): Subramanian, Rachna. (2001). Relocation Blues, The Sunday Times of India, January 14.