World Bank: Migration can be a good thing
By Doris Dumlao
Philippine Daily Inquirer
 
Posted date: January 14, 2008
 

MANILA, Philippines — The phenomenon of global migration is becoming an important channel for the transfer of new technology and knowledge that could benefit developing countries like the Philippines, a new World Bank study said.
In its publication, “Global Economic Prospects: Technology Diffusion in the Developing World,” released last week, the bank noted that overseas remittances can promote technology transfer by making investments more affordable.

The study also noted that “more moderate” migration rates may be beneficial, especially when domestic opportunities were limited, because of technological transfers from the diaspora and also because most migration was not a one-way flow.

“On the one hand, the brain drain associated with better educated citizens of developing countries working in high-income countries is a serious problem for many developing countries,” the study said.

But it said that the contribution that these individuals would have made had they stayed home was uncertain given the lack of opportunities in some countries.

The bank said developing countries can benefit from: the immigration, albeit often temporary, of managers and engineers that often accompanies foreign direct investment; the return of well-educated developing country emigrants, and the contacts with a technologically sophisticated diaspora.

Source of entrepreneurship

The study noted that majority of foreign students from many developing countries who earned their doctorates in the United States tended to return home, bringing with them a great deal of technological and market knowledge.

In the case of the Philippines’ “brain gain” network, the study noted that 35 percent had a master’s degree and 23 percent held a doctorate.

“Returning migrants can be a major source of entrepreneurship, technology, marketing knowledge and investment capital,” it said.

Technology diffusion

Citing examples from Mexico and the Philippines, the study said that remittances could support the diffusion of technology by reducing the credit constraints of receiving households as well as by encouraging investment and entrepreneurship.

The study cited a survey of self-employed workers and small firms in Mexico which found that remittances were responsible for one-fifth of the capital invested in microenterprises.

In the Philippines, it said, households work more hours in self-employment and become more likely to start relatively capital-intensive household enterprises in response to an increase in remittances.

The bank said remittance flows were also contributing to the extension of banking services to previously unserved, often rural, sectors.
 

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