Global migration has lifted millions out of poverty and boosted economic growth, a new World Bank report finds. But destination countries risk losing out in the global competition for talent and leaving large gaps in their labor markets by failing to implement policies that address labor market forces and manage short-run economic tensions.
Large and persistent differences in wages across the globe are the main drivers of economic migration from low- to high-income countries, according to Moving for Prosperity: Global Migration and Labor Markets. Migrants often triple their wages after moving to a new country, helping millions of migrants and their relatives at home escape poverty. Destination countries often benefit as migrants fill critical roles, from advancing the technological frontier in Silicon Valley to building skyscrapers in the Middle East.
Despite the lure of higher wages, rates of migrants as a share of the global population have remained mostly unchanged for more than five decades, even as global trade and investment flows have expanded exponentially during this time. Between 1960 and 2015, the share of migrants in the global population has fluctuated narrowly between 2.5 and 3.5 percent, with national borders, distance, culture, and language acting as strong deterrents.
Highlights of key findings from the report include:
-Migration flows are highly concentrated by location and occupation. Currently, the top 10 destination countries account for 60 percent of around 250 million international migrants in the world.
-Surprisingly, concentration levels increase with skill levels. The United States, the United Kingdom, Canada and Australia are home to almost two-thirds of migrants with tertiary education. At the very peak of talent, an astonishing 85 percent of all immigrant Nobel Science Prize winners are in the United States.
-Education levels of women are rapidly increasing, especially in developing countries, but opportunities for career growth remain limited. As a result, college educated women from low and middle-income countries are the fastest growing group among immigrants to high-income countries.
“The number of international migrants continues to remain fairly modest, but migrants often arrive in waves and cluster around the same locations and types of jobs,” said Shantayanan Devarajan, World Bank Senior Director for Development Economics and acting Chief Economist. “Better policies can manage these transitions in a way that guarantees long-term benefits for both citizens and migrants.”
The report recommends various policy measures to ensure the benefits of migration are shared by host and immigrant communities for generations to come. Key among them:
-Effective migration policies must work with rather than against labor market forces. For example, where there is large unmet demand for seasonal work, temporary migration programs, like those in Canada or Australia, could address labor market shortages while discouraging permanent undocumented migration.
-Quotas should be replaced with market based mechanisms to manage migration flows. Such tools can pay for the cost of government assistance to support dislocated workers. In addition, the most pressing needs of the labor market can be met by matching migrant workers with employers that need them the most.
-Creating a pathway to permanent residency for migrants with higher-skills and permanent jobs creates incentives for them to fully integrate in the labor markets and make economic and social contributions to the destination country.
“We have to implement policies to address the short term distributional impact of migration flows in order to prevent draconian migration restrictions that would end up hurting everyone,” said Asli Demirguc-Kunt, Director of Research at the World Bank.
The report argues that migration will be a fundamental feature of the world for the foreseeable future due to continued income and opportunity gaps, differences in demographic profiles, and the rising aspirations of the world’s poor and vulnerable.
“The public debate over migration would benefit from recognizing data and research,” said Caglar Ozden, Lead Economist and the lead author of the report. “What this report tries to bring to the debate is rigorous, relevant analysis to support informed policy making.”
Moving for Prosperity: Global Migration and Labor Markets is the latest in a series of Policy Research Reports that comprehensively review the latest research and data on current development issues. The new report presents the key facts, research, and data on global migration gathered from the World Bank, U.N., academia, and many other partners.
You can read the full report and accompanying datasets, based on extensive existing literature.
Commitment to ESG Reporting is Driving Change within Global Corporations
New case studies from the World Economic Forum show how comprehensive environmental, social and corporate governance (ESG) reporting has started to drive corporate transformation around the world, particularly in sustainability efforts and company culture.
Based on case studies from companies reporting on the Stakeholder Capitalism Metrics, the white paper found examples of specific strategy and operations changes as a result. These include initiatives such as new approaches to water management in real estate and implementing biodiversity strategies and targets.
The case studies also indicate that despite some progress, companies are still struggling with competing and disparate ESG frameworks around the world. As regulators begin to roll out mandatory ESG reporting across regions, alignment will be key to ensuring that the clarity and efficacy of ESG reporting continues to improve globally.
We’re happy that support continues to grow for this set of metrics even in the face of geopolitical challenges, the lingering global pandemic and economic disruptions of the past two years,” said Emily Bayley, Head of Private Sector Engagement, ESG, World Economic Forum. “As this growth continues and jurisdictions transition from voluntary to mandatory sustainability reporting standards, we hope these learnings can provide valuable insights for companies that are just getting started on sustainability reporting and those that have been doing it for years.”
ESG-Driven Corporate Impacts
The Stakeholder Capitalism Metrics Initiative case studies engaged a global set of companies to gather how, and if, their ESG reporting has informed corporate transformation both internally and externally.
Examples of these transformations include:
Stakeholders told Ecopetrol their report was too long – the Forum’s core metrics helped the company focus on reporting topics that are most material and will generate value.
The metrics go beyond ESG to capture commercial metrics on employment, economic contribution, investment and tax. This delivers “an annual dashboard of comparable data on both sustainability and prosperity that will provide us with a snapshot of how healthy our company is”.
The core metric on water consumption and withdrawal in water-stressed areas led the company to encourage its teams and clients to agree water management plans and targets. It may even influence where the company rents office space in the future.
Accurate reporting on the environmental and social impacts of its operations. For example, the metric on resource circularity points customers towards the most impactful products on the market and drives the company’s innovation agenda to design more sustainable solutions.
Reporting on the Forum’s metrics has increased the value of transparency within the company, leading to conversations and progress on difficult issues.
The metric on land use and ecological sensitivity contributed to Schneider’s new approach to biodiversity, as it adapted its reporting and asked all sites to set specific biodiversity action plans.
ESG Regulatory Landscape
While progress has been made on the creation and implementation of meaningful and effective ESG disclosures globally, concerns remain about the disparate nature of the competing and complex ESG reporting mechanisms that exist today.
There are also concerns that as reporting becomes mandated there could be less transparency because people will not want to disclose more than they have to. As mandated ESG reporting becomes more widespread, both regulators and internal advocates should ensure corporations understand the full value of transparency on sustainability and other ESG issues.
Addressing this issue is particularly important as regulators in different regions begin to roll out their mandatory reporting requirements. Focus on a common set of comprehensive and material metrics will be important for both the efficacy and feasibility of ESG reporting in the coming months. As much as possible, the European Union, the US Securities and Exchange Commission (SEC) and the International Financial Reporting Standards (IFRS) Foundation should align their metrics to ensure companies are able to implement effective ESG reporting globally.
Stakeholder Capitalism Metrics Initiative
The World Economic Forum and the coalition of companies adopting the Stakeholder Capitalism Metrics, engaged with the preparatory working group and are continuing the dialogue with the International Sustainability Standards Board (ISSB) technical teams under the IFRS Foundation as they go through the standard-setting process. The metrics are expected to form part of the ISSB “exposure draft” next year on cross-thematic disclosures and metrics.
Announced at the World Economic Forum Sustainable Development Impact Meetings 2022, these case studies build on the earlier report to showcase progress on the commitment made by companies at the Annual Meeting in 2020. Since then, 186 global companies, with a combined market capitalization of over $6.5 trillion, have adopted the Stakeholder Capitalism Metrics. Of these, 126 companies have disclosed against the metrics in their mainstream reports for either one or two years.
Trade in 25 Technologies Can Help Climate Action
Based on 30 interviews with industry and academia, the Accelerating Decarbonization through Trade in Climate Goods and Services report highlights technologies with high, immediate emissions-cutting potential, in five categories – refrigerants, energy supply, buildings, transport and carbon capture and storage (CCS). The list of technologies can guide trade ministers looking to support climate action.
“Climate change is a global concern,” says Sean Doherty, Head of International Trade at the World Economic Forum. “Our response must draw upon the innovation and capacities of the whole world, not be held back by protectionism.”
Trade collaboration on climate has been limited to date with trade and climate practitioners working in separate silos. New efforts are emerging now, however, to address the linkages between these two areas.
“There is no time to waste to limit global warming to 1.5°C,” adds Jean-Pascal Tricoire, Chairman and Chief Executive Officer, Schneider Electric. “We need to decarbonize three times more, three times faster. The good news is that we have the technologies to do it. Solutions are not limited to renewable energy. It actually starts with energy efficiency, electrification and digitization. If deployed at full potential, we can eliminate 70% of what we’re emitting today.”
The report also highlights non-tariff barriers that affect trade in climate technologies. Regulatory cooperation around product testing or labelling requirements, for example, could reduce friction in getting emissions-cutting goods to market. Interviewees also noted that climate action is held back by trade barriers to the services needed to operate climate technologies. The report suggests a way to identify these climate services for priority trade cooperation.
“Our transition to a low-carbon economy will hinge on the deployment of a number of key technologies that are both mature and widely available, as detailed in this important report on the nexus of decarbonization and international trade, including energy efficiency, electric vehicles, green hydrogen, smart buildings and more,” says Björn Rosengren, Chief Executive Officer of ABB. “ABB’s contributions to this new report from the Alliance of CEO Climate Leaders underscore our support for removing and reducing barriers to trade in climate goods and services to speed the drawdown of global emissions.”
More efforts are needed to engage developing countries in trade efforts on climate. Over 750 million people worldwide lack reliable electricity access, mainly in sub-Saharan Africa. Developing economy industries must decarbonize and leapfrog the latest technologies to remain competitive in global value chains moving towards net zero. Some developing economies will need support in creating a climate-friendly trade and technology strategy. Global and local industries can help policymakers understand the criss-crossing of value chains that drive economic activity and how to align these flows to the climate agenda.
“Climate change knows no borders and encouraging better trade between countries can ensure the transfer of valuable knowledge, new technologies and skills to improve energy efficiency in homes around the world,” says Hakan Bulgurlu, Chief Executive Officer of Arcelik. “It is critical to our ultimate goal of achieving net-zero targets.”
To support an increased understanding of trade, value chains and climate action, the Climate Trade Zero community will host dialogues and support countries with actionable analysis.
East Asia and Pacific Sustaining Growth, Restraining Inflation, but Facing Risks Ahead
Growth in most of developing East Asia and the Pacific rebounded in 2022 from the effects of COVID-19, while China has lost momentum because of continued measures to contain the virus, a World Bank report said on Monday.
Looking ahead, economic performance across the region could be compromised by slowing global demand, rising debt, and a reliance on short-term economic fixes to cushion against food and fuel price increases.
Growth in developing East Asia and the Pacific outside of China is forecast to accelerate to 5.3% in 2022 from 2.6% in 2021, according to the World Bank’s East Asia and Pacific October 2022 Economic Update. China, which previously led recovery in the region, is projected to grow by 2.8% in 2022, a sharp deceleration from 8.1% in 2021. For the region as a whole, growth is projected to slow to 3.2% this year from 7.2% in 2021, before accelerating to 4.6% next year, the report says.
“Economic recovery is under way in most countries of East Asia and the Pacific,” said World Bank East Asia and Pacific Vice President Manuela V. Ferro. “As they prepare for slowing global growth, countries should address domestic policy distortions that are an impediment to longer term development.”
Growth in much of East Asia and the Pacific has been driven by recovery in domestic demand, enabled by a relaxation of COVID-related restrictions, and growth in exports. China, which constitutes around 86% of the region’s output, uses targeted public health measures to contain outbreaks of the virus, inhibiting economic activity.
The global economic slowdown is beginning to dampen demand for the region’s exports of commodities and manufactured goods. Rising inflation abroad has provoked interest rate increases, which in turn have caused capital outflows and currency depreciations in some East Asia and Pacific countries. These developments have increased the burden of servicing debt and shrunk fiscal space, hurting countries that entered the pandemic with a high debt burden.
As countries of the region seek to shield households and firms from higher food and energy prices, current policy measures provide much-needed relief, but add to existing policy distortions. Controls on food prices and energy subsidies benefit the wealthy and draw government spending away from infrastructure, health and education. Lingering regulatory forbearance, aimed to ease lending through the pandemic, can trap resources in failing firms and divert capital from the most dynamic sectors or businesses.
“Policymakers face a tough tradeoff between tackling inflation and supporting economic recovery,” said World Bank East Asia and Pacific Chief Economist Aaditya Mattoo. “Controls and subsidies muddy price signals and hurt productivity. Better policies for food, fuel, and finance would spur growth and insure against inflation.”
China’s economic slowdown and its implications for the rest of Asia
China’s economy has slowed down considerably since the past year. The key reasons for China’s slow growth are its stringent...
Revolutionary Russia and the Formation of Political Consciousness in Modern Kerala
20th century marks an important epoch in the history of mankind. The century saw multiple revolutions, two devastating world wars,...
Factors Influencing the World Order’s Structure
“Study the historian before you begin to study the facts” – Edward H. Carr International relations are unfolding against the...
35 years of Cultural Routes: Safeguarding European Values, Heritage, and Dialogue
A Europe rich in history, heritage, dialogue and values: the Council of Europe Cultural Routes’ programme celebrates its 35th anniversary,...
The New World Order
Faith can move mountains or quite literally push you over the edge. Everyone’s brain function and cognition is tested at...
Little progress combating systemic racism against people of African descent
More than two years since the murder of George Floyd by a police officer in the United States sparked the...
Saudi crown prince shifts into high gear on multiple fronts
Saudi Crown Prince Mohammed bin Salman is simultaneously speed dating and playing on multiple diplomatic, religious, and economic chessboards. The...
Science & Technology4 days ago
The Development of Artificial Intelligence in China: Talent creation and comparison with U.S.
Middle East4 days ago
The end of political Islam in Iran
International Law3 days ago
Do we still live in a multipolar world?
Americas3 days ago
The latest Kissinger: Leadership and the eavesdropping on history
Eastern Europe3 days ago
Latvia is inundated with NATO
Russia3 days ago
Russia’s Great Game: Donetsk, Lugansk, Zaporozhye and Kherson are now Part of the Russian Federation
South Asia3 days ago
The South Asian Triangle
Intelligence2 days ago
Ethnic War a Newfangled Pakistani Forward-policy for Afghanistan