Migration can boost South Asia’s recovery and support long-term development

As South Asia reels from the impacts of unprecedented economic shocks, migration can boost its recovery and support long-term development, says the World Bank in its latest regional economic update.

‘Coping with Shocks: Migration and the Road to Resilience’ is the subject of a two-day conference that opened today in Kathmandu, organised by the Institute for Integrated Development Studies (IIDS) and the World Bank (WB), according to the multilateral development partner. The conference provides academics and researchers a platform to discuss the current situation, challenges and advancements related to migration in South Asia.

Migration drives economic growth as it allows people to move to where they are more productive. International migrants from Bangladesh, Nepal, Pakistan, and Sri Lanka, who work in the Gulf states, for example, earn up to five times what they would at home and help generate some of the largest remittance inflows in the world. Nepal derives an estimated 20 per cent of its income from remittance inflows, and in Bangladesh and Pakistan, remittance revenue accounts for 6 per cent and 8 per cent equivalent of their GDP, respectively. Migration also allows people to adjust to local economic shocks, such as extreme-weather disasters, to which South Asia’s rural poor are highly vulnerable, the report adds.

“While migration has numerous economic benefits, the costs of moving such as credit constraints, lack of information, and labor market frictions prevent them from being fully realized,” said secretary at the Ministry of Labour, Employment, and Social Security Eaknarayan Aryal, addressing the conference. “Nepal and countries across South Asia must work to facilitate labour mobility as doing so is vital to the region’s recovery and resilience to future shocks,” he added.

Poor South Asian migrants, many of whom hold temporary jobs in the informal sector, face several challenges such as precarious labour market conditions, visas tied to employment, and limited access to social protection. The Covid-19 pandemic exposed their long-standing vulnerabilities as they were disproportionately affected by restrictions to movement. However, the later phase of the pandemic has highlighted the crucial role migration can play in facilitating recovery. Survey data from the report suggests that in late 2021 and early 2022, migration flows are associated with movement from areas hit hard by the pandemic to those that were not, thus helping equilibrate demand and supply of labor in the aftermath of the Covid-19 shock. In Nepal, by late 2021, migrants were 13 percentage points more likely to be employed than those who did not migrate after facing job loss during the early months of the pandemic.

“Migration is picking up again in South Asia, but remains slow and uneven, raising concerns that the pandemic shock has had long-term impacts on the costs and frictions associated with it,” said World Bank chief economist for South Asia Hans Timmer, on the occasion. “Policymakers must address these often-prohibitive costs and frictions and incorporate measures to de-risk migration.”

The report offers several recommendations on cutting the high costs of migration, including drawing bilateral and multilateral agreements, strengthening the remittance infrastructure, and offering information and training programmes to help potential migrants make better decisions about moving. It also offers recommendations on de-risking migration through means such as more flexible visa policies, mechanisms to support migrant workers during shocks, and social protection programmes.

“South Asia is the largest beneficiary of remittance in the world,” IIDS executive chair Dr. Biswash Gauchan said, adding that remittance has played a central role in alleviating poverty, coping with economic shocks, and making substantial progress toward sustainable development goals in Nepal. “However, the socioeconomic and political cost of migration is also very high in the country where a substantial number of the working-age population has gone abroad in search of employment.”