The migrant crisis and ‘Europe’

First Published: 2016-01-28

The flood of refugees has in effect killed the Schengen agreement, and yet another pillar of European integration has fallen

In my earlier columns ("The Travails of ‘Europe’", June… and July… 2015), I had argued that "Europe" – the idea of a United States of Europe – was in trouble because of the tensions created by its absorbing the east European countries of the former Soviet Union and the design defaults of the euro. These troubles have multiplied with the opening of European borders by German Chancellor Angela Merkel to refugees from war-torn Syria, Iraq, Afghanistan and North Africa.

Ms Merkel’s motivation was in large part humanitarian, after the picture of the drowned Syrian boy washed up on the Turkish beach trying to get to Lesbos went viral. But, she was also motivated by economic considerations. Given Germany’s aging and declining population, it faces a declining economic growth rate. By allowing immigration of the able-bodied, both the means to provide resources (including human) to care for its growing number of pensioners, and boost German growth seemed attractive. But without any border controls, the numbers and quality of migrants were no longer under German control with Ms Merkel’s "open door" policy.

Students of economic development honed on the so-called Harris-Todaro model of rural-urban migration could have predicted the consequences. In these models, rural-urban migration is fueled by the gap between the rural wage and the expected urban wage, which depends on the probability of getting a higher-wage urban job. This probability in turn depends upon the urban unemployment rate, denoting the number of urban jobseekers. As the Kenyan government found in the late 1960s, if the number of high-paying urban public sector jobs is increased to deal with urban unemployment, given the large rural-urban wage differential, all that happens is that the urban unemployment rate rises-as the initial fall in urban unemployment raises the expected urban wage inducing more rural-urban migrants, until rising unemployment reduces the expected urban wage back to its initial level.

When Ms Merkel opened German borders to West Asian migrants, given the large income differences between their own countries and Germany – and exacerbated by the trauma of war – there was a flood of asylum seekers. The 1951 Geneva Convention states that someone is entitled to refugee status in a particular country only if they enter the country and apply for asylum. Thus, those seeking a new life as refugees in Germany can only do so by crossing the continent, most often by foot, and not co-operating with European Union member states they pass through-as that would mean they would have to apply for refugee status in that country and forsake getting it in Germany. The risks involved in the dangerous sea crossing to Greece from Turkey and the long trudge to Germany do reduce the relative expected gains of the migrants. But, that nearly a million reached Germany last year shows that these gains are still large and the current risks involved will not stem the migration. It was hoped that the bad winter weather would stem the number coming by sea from Turkey. But there is no sign of that happening.

Meanwhile, the countries en route to Germany from the Mediterranean, where the migrants land, are finding it difficult to cope with the large numbers waiting in their countries to move on to Germany. This has led a large number of these countries closing their borders with the Mediterranean routes of passage. This is making Greece a de facto large refugee camp. The economic costs – given Greece’s fiscal woes – are becoming unbearable.

Much worse, as there is no sifting of those who choose to make the journey from West Asia, most consist of ‘bare branches’ – single males under 35 (see my column, "A demographic time bomb", March 2013). On New Year’s eve, they perpetrated mass sexual assaults, being called "taharrush gamea" – which originated in Egypt in 2005 – in Cologne, Dusseldorf, Frankfurt, and Hamburg, Germany; Salzburg, Austria; Helsinki, Finland; Kalmar and Malmo, Sweden; and Zurich, Switzerland. Wikipedia describes taharrush gamea as "the sexual assault of women in public spaces by large groups of men. Typically occurring under the protective cover of large gatherings, assailants encircle a woman, while outer rings of men may form to deter rescuers. The attackers may pretend to be rescuers, adding to the confusion. Women have reported digital penetration of their orifices, having their clothes pulled or cut off, being pulled in different directions, having their hair pulled, and being beaten, bitten, raped and robbed. Women in Egypt have called it the ‘circle of hell’."

This has led to the virtual end of the Schengen agreement, which provided free travel in the EU, as most of the east European countries have closed their borders to these migrants, and border controls have been established in Sweden, Denmark, Austria, the Balkan states and even Germany. Many of these countries which welcomed unlimited numbers of refugees have now announced asylum caps.

How can this migration be stemmed? Wolfgang Schauble, the German finance minister, told the Davos grandees that the EU should initiate a Marshall Plan to foster development in the countries bordering Europe. This is analagous to the advice given to developing countries to undertake rural development to reduce the rural-urban income gap to stem rural-urban migration. Though right in principle, it is unrealistic in war-torn West Asia where the sole superpower has currently opted out of maintaining order. So, the migrant flows will continue. What is needed is a way to screen the migrants so that only those who are not going to upset domestic order in Europe are given asylum.

At a meeting in London last year when asked what should be done to control this migration, John Howard, the former Australian premier, commended the policy that Australia had adopted to control the migration from south-east Asia. As in Europe, many of the migrants were travelling in leaky boats and the first duty was to save them, by transferring them by Australian warships to the Pacific island of Nauru, where their claims for asylum were assessed, and if not accepted they were deported back to their countries of origin. Europe needs something similar. Deploying European navies to intercept the migrant boats, and transferring them to, say, St Helena, where Napoleon was imprisoned.

But, the Schengen agreement is in effect dead and yet another pillar of the illusion that was "Europe" has fallen. The next pillar likely to fall is free access to employment, and welfare benefits. This will make "Brexit", one of whose chief aims is to restore UK control over the benefits to European immigrants, irrelevant. The "virtual empire" that was "Europe" is sadly nearing its end.

First published at the Business Standard and posted here with the kind permission of the author.


Deepak Lal is the James S. Coleman Professor Emeritus of International Development Studies at the University of California at Los Angeles, professor emeritus of political economy at University College London, and a senior fellow at the Cato Institute. He was a member of the Indian Foreign Service (1963-66) and has served as a consultant to the Indian Planning Commission, the World Bank, the Organization for Economic Cooperation and Development, various UN agencies, South Korea, and Sri Lanka. From 1984 to 1987 he was research administrator at the World Bank. Lal is the author of a number of books, including The Poverty of Development Economics; The Hindu Equilibrium; Against Dirigisme; The Political Economy of Poverty, Equity and Growth; Unintended Consequences: The Impact of Factor Endowments, Culture, and Politics on Long-Run Economic Performance; and Reviving the Invisible Hand: The Case for Classical Liberalism in the 21st Century.

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