Immigration's Contribution to South Africa's Development: Is it a Good Thing?

By Saliem Fakir · 1 Apr 2009

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Picture credit: secretlondon123 & Dr. John2005
Picture credit: secretlondon123 & Dr. John2005

The issue of immigrants and expatriates came up as a topic in a recent election speech given by ANC president Jacob Zuma at a meeting hosted by the labour union, Solidarity. Zuma spoke to concerns about South Africa's brain drain and the need for South Africa either to attract skills back into the country or encourage immigration.

The topic is unlikely to disappear for elections to come. If ever there was a need for a good immigration policy, it is now. But controlled immigration needs to be spurred by something.

Without good industrial policy as the backbone, immigration policy can produce mixed results. It can, at best, be ad hoc -- the beneficiary of unintended consequences and perhaps sheer luck. Sound measures and clear development targets must support a country's trajectory and its attitude towards immigration.

Industrial policy and other development targets provide the framework and platform for skills demand. They also become constellations of focused activity for investment, knowledge, and technology flow. Immigration can have a number of positives.

Immigration can stimulate local skills development and the transfer of experience. Immigration can enhance integration in a globalised economy. Cross-immigration between emerging economies can strengthen the role of emerging economies in an increasingly multi-polar world. It can also foster other benefits such as cultural understanding and the development of foreign relations.

Immigration, in this country, has always been treated like a hot potato. Rarely has the debate been punctuated with the proper measure of soberness that is needed. More importantly, in the absence of a clear government policy immigration issues have been left to citizens and civil society to resolve.

This will not lead to efficient outcomes because of the absence of a bigger picture. Nor is it conducive for the long-term interests of the country. A national approach that brings in key players such as labour, business and government is needed.

Measures should also be established to ensure there is attrition in skills flight as well as attraction of South African expatriates who have a genuine interest in the country’s future and development. Talent developed, which takes flight later, because such talent doesn’t feel it is needed, is wasted talent.

Temporary and even permanent migration does not, in the majority of cases, involve permanent de-linking between nationals and the Diaspora.

The value of a Diasporas' overseas presence to the local economy is dependent on the domestic economy’s overall performance and the extent to which knowledge and expertise flows freely.

Countries that maintain domestic innovation and international business ties often benefit a great deal from its expatriate community either through the transfer of knowledge, innovation or new business opportunities. All is not lost. There may be opportunity for better policy design to encourage more of this.

Managing immigration and debates about immigration policy, requires a good handle on the economy, leadership and putting clear masts out about where South Africa needs to go in the future. Immigration needs to be more directed if we are to benefit from foreign skills.

However, policy intent can also be undermined by leaks elsewhere, such as corruption in the Department of Home Affairs, lax border control and ad hoc policies.

Recognition must be also given that our skills shortage emanates from a deeper underlying problem: our education system is failing and betraying the future of our country. We are not generating the requisite quality of skills needed to run a modern economy. Immigration can only fill the gap temporarily.

Immigration, in truth, will not supply all our needs and after a certain point, it is not politically conducive to increase immigration numbers where these numbers lead to conflict with the indigenous population and their needs.

There are good reasons why immigration can be conflictual. South Africa has a high unemployment rate, even at international levels and we have a history of racialised labour preference that needs to be corrected through affirmative action and other empowerment instruments.

Therefore, immigration policy needs to be worked out carefully and at the same time, policies aimed at the deracialisation of the labour force should not lead to unintended consequences where there are high rates of skills flight.

However, mobility in the world is not a unique feature. We live with the myth that emigration only happens to our country.

As much as South Africans emigrate to England, Canada and Australia, so a similar number of English and Australians emigrate elsewhere or temporarily migrate. It is also happening in other developing countries. A study by the US’s National Bureau of Economic Research (Working Paper No. 14592) points out that 41% of Caribbean’s, who have a tertiary education, live in an OECD country.

At the same time, there is a considerable flow of remittances, new ideas, business networks and innovation. Their remittances, in turn, support higher investment in education in their countries of origin.

People leave physically but not emotionally. Cultural and national loyalties usually triumph. This is a positive asset often undervalued.

The world’s economies have become much more interconnected and the educated elites are more prone to cosmopolitan tastes and attitudes than before. People travel either because their skills are in demand or because they want to experience the world.

Good industrial policy helps identify skills shortages, what type of knowledge and expertise is required and how foreign nationals can help develop local knowledge and expertise, while at the same time, help us develop our economy until we are on own two-feet, so to speak.

Immigrants need not replace local labour if drawn on wisely or if immigration is managed properly. However, when it comes to low-end foreign labour, this segment of labour tends to get exploited.

There is a clear case of profiteering when there is a surge in unskilled labour in the market. Foreign labour poses little risk of labour liability or conflict with unions and this labour is preferred because their wage costs tend to be lower than the prescribed average wage for local labour. 

We have several types of immigration: immigrants who come under the pretext of political refugees; economic immigrants have been coming steadily for a long time from Europe and Asia and more recently from Africa and other developing countries; and then, finally, immigrants who are brought in for their skills – like doctors from Cuba to work in rural areas to provide primary health care.

The latter is a consequence of either a brain drain, as many South Africans have emigrated and their skills required replacement and/or the fact of economic growth that has necessitated the surge in skills.

Most immigrants come to seek a better future. This is certainly the case for African immigrants from up north who want to take advantage of the strength of our economy and infrastructure.

Some come with skills for which there is not much demand in their local economy and others come with their entrepreneurial zeal and passion for trade to seek new markets or open new vistas of economic opportunity.

Reasons vary. But in general, economic migrants and skilled immigrants can expand the tax base and provide much needed knowledge and expertise.

Their presence here, in any case, has ensured a healthy counter-trade. More goods from South Africa now flow to the rest of the continent as a result of this counter-trade and the presence of other African nationals.

Immigration is a delicate issue. But it can produce considerable benefits for the country's development, if managed well. There should be concern about foreign unskilled labour being exploited and used to displace local labour, but skilled labour and passionate entrepreneurs can add the intellectual and physical juice to an already sluggish economy.

This should be more important, as we have to move from economic growth built on infrastructure spend to growth built from knowledge, manufacturing and the energy of entrepreneurship.

Fakir is an independent writer based in Cape Town.

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