Trade Policy Note Final-rev08 - Development

traditionally done in trade in goods. Labour remittances are a major source of foreign
exchange for many developing countries. These can help reduce the vulnerability of
poor communities from the impact of domestic economic crises, finance small local
businesses and support extende d family safety nets. MNP can also increase equity
since labour remittances often provide income to particularly disadvantaged regions
of developing countries. Work abroad can provide women with opportunities for
wage income that do not exist at the national level. MNP can this lift persons out of
poverty, empower women, and provide job opportunities for youth i.e. MDG s 1, 3
and 8 (target 16). On the other hand, the permanent emigration of professionals can
detract from efforts to establish universal, quality services in key public service
sectors such as health and education and, if not properly managed through an intergovernmental
bilateral or multilateral agreement, can contribute to “brain drain”
rather than “brain circulation or ‘brain gain”.
Impact of MNP
Economic models suggest that expansion of MNP could generate impressive welfare
gains for the exporting countries. 75 Even though this includes more than MNP,
remittances by workers abroad to developing countries reached $167 billion in 2005
and this figure may be considerably higher since many transactions are realized
through informal channels. 76 For a number of developing countries, such remittances
account for over 10 percent of GNP. 77
Short term movement of people is often essential for developing country enterprises
to effectively participate in international trade in services. It is a necessary component
of a services package offered by a service exporter, with payments being made to
employees in the exporting country. MNP can also lead to an upgrading of skills;
unskilled rural persons can become more productive by acquiring the capacity to
perform as industrial workers and thus, upon their return improve their home
country’s industrial competitiveness and attract investment to the manufacturing
sector.
Restrictions on MNP can result in prohibitive barriers to developing countries exports
in a variety of services exports, in sectors such as software, energy services and
construction.
However, workers abroad can be subject to exploitative and degrading working
conditions. While MNP can empower women by giving them a unique source of
income, women are too often victims of harassment and sexual exploitation. 78 Foreign
workers may be forced to work at lower salaries despite advanced levels of skills.
Separation of family members can lead to neglect of children and other social
75 See discussion in Stiglitz and Charlton, op. cit., pp 247-252
76 See statement of UNCTAD Secretary-General to ECOSOC Round Table on Globalization and
Labour Migration, 6 July 2006, United Nations, New York (www.unctad.org).
77 Lesotho, Vanuatu, Jordan, Bosnia and Herzegovnia, Albania, Nicaragua, Yemen, Moldova, El
Salvador and Jamaica. For more info visit www.migrationinformation.org.
78 See Tullao, Tereso S. and Michael Angelo Cortez , MNP and Human Development in Asia and
Jayanetti, Sanath, Movement of Natural Persons and its Human Development Implications
(Housemaids and Unskilled Migrant Workers), as well as other studies on MNP UNDP Asia Trade
Initiative on Trade and Human Development, Phase 1, technical support document (Hanoi: 2003)
(available at www.undprcc.lk/Publications/Publications.asp?C=4 ).
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