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The Global Refugee Crisis - From Economics to Climate Change

In this edition of Foreign Affairs Unedited, a panel of Foreign Affairs experts, including Sebastian Mallaby, Péter Krekó, Tara Zahra, Sebastian Elischer, and Patrick Sykes, chime in on the many issues surrounding the ongoing global refugee crisis.

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To learn more on the subject, check out the related reading: Net Benefits by Sebastian Mallaby, Scaling the Wall by Péter Krekó and Attila Juhász, The Return of No-Man’s Land by Tara Zahra, Sinking States by Patrick Sykes, and The EU’s Migration Diversion by Sebastian Elischer.

This podcast has been edited and condensed. A rush transcript is below.

HOST: This is Foreign Affairs Unedited, and I’m Katie Allawala. At this point, most everyone is familiar with the general contours of the ongoing refugee crisis. Humanitarian disasters in Syria, Afghanistan, and elsewhere are driving millions of people from their homes toward Jordan and Lebanon, Greece and Turkey, and deeper into WesternEurope. 

But beyond the simple and tragic human story are debates about the economic impact of refugees, Eastern Europe’s role in the crisis and its place in Europe more generally, what Europe should do to secure its borders, and what the next refugee crisis will be.  

Today on Foreign Affairs Unedited, we’re bringing you expert takes on all of these questions. Simon Engler, an Assistant Editor at Foreign Affairs, and Sebastian Mallaby, a Senior Fellow at the Council on Foreign Relations, kick things off with a discussion of the impact of refugees on wages, unemployment, and economic wellbeing.

ENGLER: Sebastian, what's the current state of debate among economists on the economic effects of migration?

MALLABY: What I'd say that this is a subject where the gap between what most normal people think and what political leaders who reflect public opinion think, the gap between that and what economists think is extremely wide amongst economists, the view is that inward migration is pretty much beneficial all around. It's clearly massively beneficial to the migrants themselves who often see their incomes go up by as much as tenfold. It's okay for the countries that lose the skilled emigrants. There, there is a little bit of debate, Paul Collier, a well-known economist at Oxford University has written critically of the effect of the brain drain on developing countries that lose, for example, a lot of health workers. But there's evidence on the other side, so that's a bit of a mixed picture. And then, for the receiving countries, particularly those with a graying population, it's pretty clear that inward migration is very good for growth. And then, it does not even damage the wages of low-skilled native workers.

The disconnect between economists and sort of popular opinion on migration reminds me a little bit of the disconnect on trade, where almost dual economists would say that trade increases the sum of aggregate output and makes the world richer. But, trade has nonetheless been very unpopular with the public for many years. And, I think partly that's a sort of psychological thing that the people who lose from trade, because the jobs that they were doing disappeared because the factory moved to Mexico, whatever, those people are gonna blame trade. They're gonna be very loud about that, and their sense of loss will be highly politically audible. Whereas people who gained from trade, I'm not gonna go around saying, "I'm making more money this year. And it's just because of trade." They're gonna say, "I'm making more money 'cause I'm brilliant. I'm doing well. I'm working hard. This is all thanks to me."

And, I think with migration, there's some of that going on as well. That obviously, when migrants come in to an economy, what happens is that they do displace some low-skilled workers with whom they compete. Now, the evidence shows empirically that those native born workers who lose jobs pretty rapidly go off and find new jobs where, for example, they speak their local language better than the migrants, and so they can do clerical work or that kind of thing, where their language puts them beyond the rate of competition.

HOST: From Denmark, where cultural attitudes might not have quite caught up with economic realities, we turn to Hungary,which today is facing many of the same challenges. Brian O’Connor, Deputy Web Editor at Foreign Affairs, sits down with Peter Kreko, director of the political capital institute in Budapest. They discuss how Hungarian Prime Minister Viktor Orban has used the refugee crisis to his advantage—both at home and in Europe more broadly.

O’CONNOR: Orbán was raising questions about migration far before the international attention turned to Hungary itself. Is there a sense within Hungary that he might have been onto something?

KREKO: What we can see is that right now the domestic political debate returned into the scheme that is quite comfortable for the government, and this is about that the government is fighting for national Hungarian interests, defending Hungarian people from an external enemy, and the Western opposition and the European elite and the bureaucrats in the Western elite is just hypocritically, liberally, politically correctly trying to solve the problem but it fundamentally fails.
On the other hand, even on the level of European politics, he wants to step up as a leader and a game changer, and he acts as a crusader that fights against Muslim hordes and he even referred to the Turkish rule in Hungary that lasted for 150 years, trying to enlarge the overall threat of the Muslim refugee crisis and immigration. And generally, what we think is that while he receives quite widespread criticism from many European member states, and even he received criticism from the leader of the United Nations, Ban Ki-moon, and others, there are a lot of voters and, I think, even politicians who resonate with what Orbán says and what he does.

O’CONNOR: Do you get a sense that within Hungary there's a feeling of isolation from international communities?

KREKO: What's an interesting thing is that the Hungarian public opinion is dominantly pro-European, pro-Western, even I would say pro-American. So an isolation in the classical sense, I think, would be something that the Hungarian voters would rather punish. But the government is clever to play a double game. On the one hand they claim that, yes, Hungary wants to walk on his own way and we will be the pioneers in solving the refugee crisis with a strong alarmist rhetoric and agenda and different steps. On the other hand, they always refer to signs of support from Western Europe.

For example, among the German Christian Socialists, there are high level supporters of Orbán's policies and politics. I think Orbán is right in the sense that in over all Europe I think the voices that are saying that Europe cannot be as open as it was beforehand are becoming more and more mainstream. And I think there are a lot of voters and there are a lot of politicians who think what Orbán says but sometimes they doesn't there to express.
HOST: As it turns out, Central and Eastern European governments have a long history of closing off their borders—both to migrants coming in and to citizens trying to leave. I talk to Tara Zahra, aprofessor at the University of Chicago, about some of the problems such policies have helped create, namely No Mans Lands.

ZAHRA: A No Man's Land is an area between the frontiers of two states. And I think initially the term comes from war zones, for example during World War I from the area between two trenches would be referred to as a No Man's Land, but in the 1930s it started to be referred to as these areas between states or on the border of states where refugees were literally caught between frontiers.

ALLAWALA: In your piece you mention that it's kind of an artifact of modern concepts of sovereignty, so can you explain how the No Man's Land idea relates to a modern state?

ZAHRA: Sure. So before the First World War there were certainly some restrictions on migration, but in general for example passports weren't really widely used before the First World War and there were very few restrictions on immigration in particular in the West. So there were always refugees from various political conflicts, but in general refugees were able to find a new place to live pretty easily. After the First World War, states, in North America in particular, the United States, and Canada, Great Britain, but also in Eastern Europe, the area I know well, started to really restrict migration. And that just meant that in cases of political conflict, refugees for example from the Russian Revolution or the Armenian Genocide were some of the first big cases, no longer had an easy time finding a new home. And so, the refugee crisis really arose, in Europe, arose together with these new restrictions on migration.
This is one of the more counter intuitive things, 'cause in general when we think about this moment after World War I and the kind of... The end of the era of free mobility, we think about it in terms of the restrictions imposed on migration in the West. But in fact there was a kind of co-conspiracy where governments in Eastern Europe or countries that traditionally had a lot of emigration were also very interested in restricting that movement. And it was partly due to populationist concerns that they were worried about losing labor power, they were worried about losing military conscripts, especially during World War I, but those concerns continued. And a kind of general belief at the time that more population was better, that created was equal to more political and military power.

ALLAWALA: That's fascinating, and I guess informs their reaction to the flow of migrants from Syria today.

ZAHRA: There are a couple things going on I think, one is a long standing hostility to migration in general, whether it be immigration or emigration. But another is that for a very long time, until really and arguably still today East Europeans were seen and sometimes perceived themselves to be on the margins of Europe, and fought very hard to be legally counted to have the rights of Europeans, and including in the EU the right to freedom of mobility within the Schengen Zone within Europe's frontiers. And so arguably these are the people that have the most to lose by the expansion of those rights, and the most to gain in a sense by erecting frontiers, erecting a kind of new iron curtain around Europe.
HOST: Besides building an Iron Curtain, European countries have tried many other strategies for securing their borders and managing migration. For example, in early September, the European Commission made plans, quietly, to beef up the offshore processing of refugees, including by building a temporary migration processing center in Niger. University of Florida Assistant Professor Sebastian Elisher explains.

ELISCHER: From the outside world, or from the outside perspective, Niger looks like a stable country. And it's a country in which the EU is already very active in terms of development policies, in terms of having a European Union information office there. It looks stable from the outside, but it is a trafficking hub for human traffickers crossing the Sahara on to their way to Libya. It will be located in the sort of far flung North of the country, which is not accessible, which is an area where human traffickers, disgruntled Al-Qaeda terrorists, Tuareg rebels, and other sort of people you don't wanna hang out with, are hanging out. So, I do not think it's a good idea at all.

The debate about extraterritorial asylum centers has been on the EU agenda for a considerable period of time. It really was debated for the first time in 2003, when the UK pushed it on the European agenda, shortly after the beginning of the Iraqi war, when hundreds of thousands of Iraqi refugees were escaping the American-led war against terror. So this was the first time. And most of these Iraqi refugees at the time applied or tried to find their way to the United Kingdom, and that's why the United Kingdom, at the time, pushed it onto the agenda. It was rejected by a majority of European countries at the time because of humanitarian concerns and because there was a general consensus that there was no country in the Maghreb, but also outside of the EU that would classify as a sort of safe place for an extraterritorial processing center.

I'm pretty sure it will be established because the EU already has a structure up and running in Agadez. And they will use that compound where the EU currently has some representatives there as a building. So, no. I am pretty sure we'll go ahead. I'm pretty sure it will not be successful.

Host: This month, the migration crisis got even more complicated with Russia joining the fray in Syria, ostensibly to fight ISIS and help stem the flow of refugees toward Europe. We’ll continue watching that story as it unfolds. In the meantime, we end the podcast today with a look at the world’s next potential refugee crisis. Patrick Sykes, author of the recent Foreign Affairs piece, Sinking States, talks to Brian O’Connor.
O’CONNOR: So I thought your article was very interesting because it's talking about a migration issue that for all intents and purposes is getting overshadowed by what's happening right now within Europe.

SYKES: So obviously, now we see in the news, this sort of sense that Europe has been overwhelmed by the sudden influx of refugees and it doesn't really know how to handle that. You now see it dealing with the aftermath of that scramble. But here's the case where we've had decades of warning and all the science is there, this is predicted, this situation has been predicted. We do know what to expect and we do know what to do about it and there are negotiations at international level in the form of a conference, the parties for example, where genuine change could be enacted. So I'd hope that it could be a wakeup call for lessons to be learned.

O’CONNOR: What I thought was interesting is that, it seems every country is taking a different perspective. Some seem to be building islands, whereas others are looking to either hold their ground or are realizing that they are eventually going to have to move, what do you think out of all those approaches is going to be the most successful? 

SYKES: I think ultimately, it's gonna have to be a balance of both. The world is gonna to have to decide not between prevention and cure, but how to reconcile the two. So, on the one hand, it needs to be working to alleviate the effects of climate change, so that these situations minimize in their negative impact, but on the other hand, it's not gonna completely turn back the clock and make the situation go away. So, it, at the same time, needs to be planning on burden sharing and where these people are gonna be admitted and what kind of lives they're gonna be... Hope to establish.

O’CONNOR: Well, what seemed particularly interesting to me was that the Maldives is building an island, essentially,

SYKES: As I understand it, the project, it's now in its second phase and people are... It does have permanent residents and there's proposals to link it to the main naturally-formed island by a bridge. There were also reports circulating that the Maldives was looking into buying new territory in an existing naturally-formed state, so that when it finally had to evacuate, whenever that moment came, it would have this sort of back-up that it would have secured, probably bought from perhaps India. But that has its own problems, because it's not clear that a kind of private transaction is sufficient to transfer sovereignty, as it were, that the two languages of international law and private law kind of meet in this newly strange situation. But that's another approach that they're taking, which I don't think I did mention in the article.

O’CONNER: It seems that one of the biggest challenges that refugees would face from climate change would be that there is no state to return to in many cases, that there really is no alternative but to permanently find other homes if the international community doesn't take action. And it seems as though this would make the current refugee crisis pale in comparison where you might have a loss of state governance that's forcing people out.
SYKES: Scary though it is, I think the sad fact is that for states and for policymakers, that's much harder to grasp than sort of photographs of people arriving on your shores or the military being sent to borders to stave off protests about entry.

O’CONNOR: What should the international community do to give these individuals more agency over their future if they are forced to be displaced?
SYKES: I think maybe there's two elements that they could consider. First of all is the economic side of things that I think the international community could look at how exactly are these people making their livelihoods, and then when it comes to planning out burden sharing, where are people gonna go? This should be, that estimating should be as tailored as possible to make sure that they can continue something approximating the livelihood they had before. Whether that's fishing, whether that's trade of some other form, whether it's tourism, a lot of this could be transferable.
And second of all, since this is a sort of slower crisis, shall we say, compared to the current one that we see, that could be turned to the world's advantage in that outside the affected companies, there are already building up small, albeit small diaspora communities, as countries like New Zealand introduce these annual quotas to accept people. So I think states could be working with those communities as well, to strengthen them and to monitor how they're fitting into the society and any problems that arise. And because this... In other words, they could take advantage of the pace of this, in that it's a manageable pace, at least for now, that could be used to learn a lot of the lessons over a controlled amount of time, rather than the scramble that we see now

HOST: That was Brian O’Connor talking to Patrick Sykes. Check out our coverage of the migration crisis on If you like the podcast, please leave a review on iTunes



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