Dangerous Imports

In twitterese, it was a classic *facepalm* moment when I read Fixing the migration ‘problem’ on Business Standard yesterday. I was drawn to it thanks to the (by now common) histrionics of B. Raman against the author being retweeted by folks who seemed to be enjoying not a little bit of skadefryd. While I frown upon Raman’s impromptu tamasha, I must confess that I agree with his rejection of Pai’s argument. Unfortunately (and I suppose, typically), that – the argument – was the least-discussed matter in the twitter free-for-all.

The basic argument made was that the migration problem in Assam can be better solved by implementing a system of work visas to Bangladeshi migrants who come to Assam. Such a travel document would allow them to go back and forth between their home (Bangladesh) and their place of work (India) easily, reducing the number of people forced to stay behind for fear of not being able to make it back across a border which, however porous, can be dangerous. Such legalisation would also allow Bangladeshi migrants to travel across the country and labour pool would not cause unnatural strains on local economies by being concentrated in a few districts.

This proposal sounds quite similar to those being floated in the United States regarding illegal Mexican migrants. While there may be some merit to it in the US, such a scheme would be nothing short of a catastrophic failure in India. In principle, Pai’s economic theory is absolutely correct – legalise and disperse labour for maximum utility. However, as tweeter Yogini commented, suggesting solutions without “comprehending ground reality is like an engineer attempting to [construct a building] without investigating the ground for foundation.” The historical, political, and ethnic dimensions of this conflict have been covered well by writers at the Centre Right India blog, and I will not repeat their analyses here. The focus here is on the economic aspect, but the proposal fails to “investigate the foundation” for that too.

The reason a scheme of work permits works in the US is because the migrants coming from Mexico do the most menial, thankless, or strenuous jobs in the US – janitorial work, picking produce, construction, etc. Such jobs, despite Republican rhetoric, go largely unfilled without the Mexican labour force. Another example is post-war West Germany – depopulated by twelve years of Nazi rule and six years of war, Bonn issued work permits to foreigners, primarily from Turkey, to come and work in West Germany as Gastarbeiter. In the immediate aftermath of war, the German reconstruction efforts absorbed large pools of immigrants. The Wirtschaftswunder from 1948 – 1960 kept the economy growing at around 10% or more, and the erection of the Berlin Wall in 1961 kept the demand for foreign workers from collapsing. However, since the early 1970s, the policy had to be abandoned (the government even instituted a Rückkehrprämie programme to repatriate those willing to go back home – few did) due to deceleration of economic growth, equilibrium, and contraction.

Looking at the reasons for support in the US for a work permit programme for Mexicans and the West German trajectory (not only for the reasons for a work permit system but also the problems it causes now), it is not clear why such a system would be recommended for India. It is hard to get credible data for India, but official unemployment figures (which no one accepts) stand at 3.8% for 2010-2011, significantly lower than the 9.4% reported in 2009-2010; some even put it as low as 2%. However, non-government experts have put the figure in the range of 15-19%. Whatever the actual figure, it was clearly high enough that the UPA decided to initiate a rural employment guarantee scheme a few years ago(which has been yet another catastrophic failure). The question then becomes, if unemployment is so rampant that the GoI is spending Rs. 40,000 crore annually on NREGA, why would anyone advocate bringing in even more labourers from Bangladesh? In essence, it would seem that NREGA has become a scheme to subsidise Bangladeshi workers! Thankfully, it is not argued that Bangladeshi manual labourers are somehow superior to Indian manual labourers.

India’s labour woes are not merely restricted to unemployment – the number of people underemployed stay off the books and make government statistics look good while still remaining unable to feed themselves or their families. Underemployment is a widely acknowledged problem, which will not be solved by adding more labourers to the workforce. The National Sample Survey Office’s (NSSO) figure of 51% self-unemployment is an omnibus category that includes everyone from shoe-shiners to doctors, and hides huge underemployment. Rajiv Kumar, secretary-general of the Federation of Indian Chambers of Commerce and Industry (FICCI), points out that the official figures of 2% unemployment and 32% poverty simply do not tally. “The majority of the [self-employed] section comprises street vendors, hawkers or people who don’t have jobs and can’t afford to sit unemployed,” notes Kumar. According to the India Labour Market Report of 2008, the underemployment figure stood between 15.8 and 26.5%. It is unlikely that these figures would have plummeted significantly – even NREGA guarantees only 100 days of employment per year.

There should be no opposition to skilled labour coming to India (if it can be attracted!) – the United States is a great example of how to profit from attracting skilled labour from around the world – but the class of workers coming across the border from Bangladesh, illegally, is the unskilled manual labour class. There is an abundance of that in India, with no help from the dear neighbours. Pai’s argument is also that it is time to try new ideas such as the work permit scheme because the pretense that border patrols and fences succeed in keeping undesirables out cannot be sustained (“Work permits can do better than pretending that border fencing and patrolling are keeping the migrants out”) . That much is true – the border is indeed far more porous than it should be. However, there are two points that need to be made: 1. the failure to implement does not necessarily discredit the scheme itself, or we might as well disband the police force, the army, and the government(!), and 2. the reason for the failure to implement is not structural but political, and in this, we are going into a realm already covered by CRI’s bloggers in their posts.

The illegal immigration from Bangladesh is a serious issue which cannot be plastered over by ill-conceived ideas imported from situations that are dissimilar to India. While fully acknowledging the treason of the concerned political players in allowing the situation to become so serious, I respond to the economic dimension that was raised in isolation. It needs also be stated that solutions rarely work in isolation from other factors, and even were there compelling reasons for a work permit scheme, those other factors must also be resolved.