Anti migrant feelings on the rise

There is one more development we have to start thinking about. Possibly because of the worsening economic situation in developed western countries, anti migrant feelings are on the rise. This is an important matter that should concern a country like ours because we are highly dependent on remittances of our migrant workers.

Last week, German Chancellor Angela Merkel declared that multiculturalism in Germany had “utterly failed.” Merkel told a gathering of the conservative youth organization of her Christian Democratic Union that the concept of multiculturalism had been discredited. Merkel said the idea of people from different cultural backgrounds living happily “side by side” did not work.

Up until last week, the German Chancellor tried to stay moderate on the increasingly acrimonious debate about immigration. The latest debate began in August after the publication of a book by Bundesbank official Thilo Sarrazin in which he warned against the growing Islamization of Germany. The book quickly became a best-seller even as Sarrazin himself lost his job with the German Central Bank. 

Public debate over foreigners in Germany has intensified as Germany’s anemic birthrate fueled fears that ethnic Germans will eventually be outnumbered by other groups, the Wall Street Journal reported. This, the Journal observed, adds “a sense of existential angst to the public discourse.”

Germany has 80 million citizens and is Europe’s largest country. But its birthrate is among the lowest in Europe. It is also a country some four million Muslims, mostly Turks, call home. Germany has done relatively little to integrate its immigrant population over the years.

The Journal reports that critics decry the inability of foreign migrants to speak adequate German, often lack basic skills and have become a drag on the country’s welfare system. “Instead of multiculturalism, German conservatives have called for integration through policies such as mandatory language courses and other measures that force immigrants to assimilate.”

Ms. Merkel says the onus was on immigrants to do more to integrate into German society. A large number of Germans seem to agree with the Chancellor. One recent poll showed one-third of Germans believed the country was “overrun by foreigners”, according to the Guardian. It also found 55 percent of Germans believed that Arabs are “unpleasant people”, compared with the 44 percent who held the opinion seven years ago.

But Germany has a problem with this anti immigrant attitude. It desperately needs workers to fuel its economy. The German Chamber of Industry and Commerce (DIHK) estimate Germany lacks 400,000 skilled workers.

Merkel’s own labor minister, Ursula von der Leyen (CDU), told the Frankfurter Allgemeine Sonntagszeitung that “for a few years, more people have been leaving our country than entering it.” She wants Germany to “lower the entry hurdles for some foreign workers in order to fight the lack of skilled workers in Europe’s largest economy.”

But Ms. Merkel is not having any of that. In her speech over the weekend, Merkel said the education of unemployed Germans should take priority over recruiting workers from abroad, even as she noted that Germany could not get by without skilled foreign workers.

Similar anti-immigration feelings were noted in recent weeks in France and Italy. Other European countries, Britain, Ireland, Netherlands, Spain and even Sweden also have rising anti-immigrant sentiments as the unemployment rate soared and economies soured. The sentiments are mostly directed at Islamic migrants and the so called Roma people or gypsies who insist on carving out their own distinct communities and imposing their own social rules.

Migrations to rich Western countries have largely been economic in nature, similar to the rural-urban migrations we see in many emerging economies. Perhaps, the rate of migration will decline with the economic crisis in the western economies and even cause a reverse migration as what had been observed with Latino migrants to the US. The much talked about Polish plumbers and dentists who migrated to Ireland during its boom years are now returning to Poland where the economy is more promising.

There are also those who say that the problems of Islamic migrants are not applicable to Filipino migrant workers overseas because we are more ready and willing to assimilate. The professional levels of our migrants are also higher and they are thus not a strain on the social safety nets of host countries. But the rising number of abused runaway OFWs as well as those victimized by human traffickers living subhuman conditions is now an urgent concern.

Nevertheless, there is no denying the very visual difference in the color of our skins makes it easy for anti migrant feelings to easily spill over to Pinoys abroad. Tougher immigration laws will affect the ability of future Pinoy migrants to work abroad. No less than the ILO has warned our government not to be too dependent on OFW remittances in the future for these and other reasons.

It is eerie how the gains made in the past decades of globalization seem to be going down the drain as economies falter. Then again, even in globalization’s glory days, free movement of workers across national boundaries had not been achieved. Now, it promises to be a lot tougher still.

Strong peso

 I got this e-mail from A. Reyes, a Pinoy expat working in New York’s financial sector in reaction to our column last Wednesday on the exchange rate.

I think allowing market forces to determine the Philippine currency’s value makes more sense for the Philippines than it does for Brazil and Thailand. Both countries export cheap commodity-like products and/or consumer goods and sell them to buyers who are price sensitive. The Philippines, on the other hand, exports products and services such as BPO and labor. These have a higher degree of differentiation.

The reason why the Philippines shouldn’t artificially devalue the Peso is because it still carries a substantial amount of foreign debt relative to its GDP. Now, more than ever, would be an excellent time to pay down that debt and give the country the kind of financial flexibility to invest in better infrastructure that it has not enjoyed since the 1960s. However, it remains unclear what President Aquino’s financial priorities are.

UP Economist Ben Diokno, explains in a recent column for Business World that “the impact of the peso appreciation on the overall economy is much more serious than originally thought.” Diokno insists it can’t be business as usual. “The monetary authorities have to be more aggressive in stemming the peso appreciation. If government statistics are to be believed, the peso rise has adversely affected more than half of the Filipino people.”

Diokno’s suggestions: “First, BSP should change its strategy by becoming more aggressive in its dollar buying operations. For sure, it is has intervened in the “dirty floating” forex market in the past. But its level of intervention is apparently not strong enough. It has to be bolder.

“Second, finance authorities should minimize borrowing in foreign currencies. Every time new foreign loans — official and commercial — enter Philippine shores, the peso appreciates. Borrow in pesos, convert them into dollars, and use them to pay our dollar debt. For lack of investment options, the economy is awash with liquidity. The government should float more peso-denominated bonds and use the proceeds to finance public infrastructure or pay the dollar-denominated public debt.

“Third, monetary and fiscal authorities have to confront more aggressively the inflow of ‘hot money.’ The Philippines has become a recipient of large inflows of ‘hot money’ in search of profit — estimated at a monthly inflow of one billion US dollars. The country doesn’t need these speculative dollars. They are here to suck the blood of the Philippine financial system. They could be destabilizing. Currency speculators come in when they see some large, short-term profits to be made, and exit at a little sign of instability or bad news.”

The next move is government’s.

Marooned

Then again, what to do about the exchange rate depends on the economist you ask and what the assumptions are. A joke I saw on an Internet blog site (Lara’s Musings) illustrates:

A physicist, a chemist and an economist are trapped on a deserted island, and they have a large crate of canned food without an obvious way to open the cans.

The physicist suggests, “Let’s tie vines together, throw them over the branch of the coconut tree and use coconuts to force open the cans by bouncing the coconuts off the cans at the correct angle.”

The chemist responded, “That’s absurd. Let’s use the sea water, some sea weed and the sun to corrode the tops of the cans off.”

The economist averred, “You’re both wrong. Assume you have a can opener.”

Boo Chanco’s e-mail address is [email protected] <mailto:[email protected]> . Past columns may be accessed at www.boochanco.net <http://www.boochanco.net/>