In our December 19, 2013 article entitled “Explaining the Ethiopian outmigration: incentives or constrains” we alerted readers and policy makers in Ethiopia about the push, pull and mediating factors of outmigration in general and outlined the factors as they relate to Ethiopia. In this short article we aim to discuss further the incompatibility between macroeconomic growth and outmigration and close the piece by outlining potential mitigation strategies.
By the end of 2013 and early 2014 the world witnessed yet another shame of Ethiopians. Voices of men, women and children in Saudi Arabia, Lebanon, Libya, Southern Europe and Southern Africa are instantly being transmitted across the globe through the use of advanced information technology. Saudi Arabia alone deported at least 165,000 Ethiopians within the span of few weeks. Demonstrations were held in Kuwait and Israel against African immigrants. The European Union has erected various forms of fences against immigrants from Africa. As Emnet Assefa of Addis Standard, a journalist in one of the local newspaper noted, “[o]ver the last few years, news of young Ethiopian men and women found dead inside jam-packed containers loaded on heavy duty trucks has become a routine media exercise both locally and in many parts of the continent.” Abuses, abductions, disappearances and killings of Ethiopians in the Middle East, North Africa, and Gulf States has become common. On Thursday March 20, 2014 the (U.S. based) National Public Radio (NPR) run a heart-wrenching story of an Ethiopian young woman who took unbelievable levels of risks and investments to reach the shores of the United States. While outmigration is the history of mankind, as indicated in the holy books, for example, modern day migration, particularly migration into the Middle East, is documented to be associated with calamities.
Detentions of Ethiopians for violating the immigration laws of other countries (such as in Kenya, Tanzania, Uganda, Zambia, Zimbabwe), deportations, refugee camps filled with Ethiopians, and sending the remains of Ethiopians who died in their search for better lives and liberty has become routine. Disturbed by the depressing news and the total failure of the Government of Ethiopia (GOE), the Ethiopian diaspora held noisy protest demonstrations in front of the Saudi Arabian and Ethiopian embassies, collected petitions, contributed and donated some funds to the International Organization for Migration (IOM) to aid returnees and painfully listened to the information provided by foreign based radios and websites. While these are normal reactions and laudable works, they are nonetheless temporary measures and will not serve as mitigation strategies unless one understands the causes, scale and depth of the problem, and consider a range of possible policy options.
The Horn of Africa has been and continues to be one of the hot spots of major human movements in the world. Civil wars, secessionist conflicts, tribal-clan warfare, famine, land scarcity and evictions, and poverty have been the causes of both internal displacements and cross border migration. At the time of writing this article, tens of thousands of Sudanese refugees are reportedly crossing the border and entering the Ethiopian territory in search of security. The civil wars in North and South Sudan, tensions and skirmishes in the Eritrean-Ethiopian borders, sectarian and secessionist movements in Somalia and the Ogaden, ethnic, religious and clan tensions, land grabs and repression have been some of the culprits of the migration.
In addition to the instability and government failures in the region, it is important to note that globalization often manifests itself in the form of increased movement of capital, freer movement of goods and services, internationalization of production and investments, and information about labor demand. Hence, outmigration must also be examined in the context of the global trends in the import and export of labor. Immigration magnet countries generally have labor shortages as in the Middle Eastern countries while exporting countries benefit from remittances. In other words, one might be tempted to ask whether the remittance that a country receives from the export of both skilled and unskilled labor drives a government’s policy towards emigration. This question is pertinent to Ethiopia as the country exports both skilled and unskilled labor and its annual earnings from remittances is estimated at about 3 billion dollars, a figure that is more than the revenue it obtains from exporting products. In addition, the government has been trying to finance mega projects through the issuance of low interest and high risk diaspora bonds.
However, consistent with theory, Ethiopians spend their remittance earnings on consumer goods and alleviating family hardships. Remittance expenditures on consumption goods, particularly imports, therefore, is believed to have played their own roles in exacerbating the high cost of living in the country and widening its trade deficit, in addition to raising the birr’s real exchange rate and escalating real estate prices. Anecdotal evidence also shows that a good number of Ethiopian diaspora members are deeply involved in the real estate sector, particularly housing. Using its monopoly power on land, the government has been engaged in evicting entire neighborhoods, including the forced removal of the remains of the dead from grounds that traditionally belonged to the churches, and building roads and auctioning the confiscated lands at artificially inflated prices that are often set through insider trading of information. This is in addition to continuously raising rental prices. The use of remittances in real estate thus could only add fuel to the fire, thereby making housing unaffordable to residents. Anecdotal evidence also shows that remittances have played their own roles in fueling corruption and heightening rural and urban land speculation.
Notwithstanding the above, the GoE has been claiming that the country has been enjoying double-digit real economic growth for about one decade. The growth statistics however has been questioned by several economists and as of late even magazines that used to be known for echoing the government’s line of story have started to question the validity of the government provided statistic. Secondly, the country is known to have achieved “stability” since 2000, while at the same time neighboring countries such as Sudan and Somalia found themselves embroiled in escalated internal conflicts and with their neighbors. These stories spark a number of important questions. First, given that the country is claimed to be at “peace” with itself and is also a peace-maker in the Horn of Africa (such as contributing troops in Somalia, Sudan and beyond), and with a “federal multi-party system” in place, why would one observe documents and criticisms against the government? Why should the residents of a land with a growing economy and “federal democracy” choose to emigrate en mass? In other words, could outmigration and economic growth move in the same direction or move in different directions or have no association between themselves at all? To answer these questions in the context of Ethiopia, one needs to review the relevant literature.
Continue reading in PDF: Some policy considerations regarding the Ethiopian outmigration