RANDALL CAROLISSEN: Global skills migration could deepen the North-South divide

Some moderation is required to address the generalisations contained in Bjorn Lomborg’s recent article saying skills migration could assist in the attainment of the UN Sustainable Development Goals (SDGs) in developing countries, and even boost global GDP by as much as 50% (“Global skilled migration could mitigate inequality”, May 9). 

Significant global power shifts have moved the world from an assumed steady state and a far more nuanced interpretation of fact is therefore required. The IMF has found that developing countries face an average annual funding gap of $2.6-trillion for investment in health, education, roads, electricity, water and sanitation, which given the parlous fiscal state and accelerating inflation of most nations postpandemic, makes the SDGs unattainable.  

The hypothesis put forward by Lomborg that global remittances could turn the tide and advance SDG ideals is an oversimplification of a set of very complex global dynamics. Power imbalances continue to be defined by widely diverging GDP-to-capita metrics, which in 2022 ranged from about an average of $1,450 in Sub-Saharan Africa to more than $67,500 in the US, with a global average of $12,263. This starkly illustrates the bipolar wealth distribution, which favours the north, and the paucity of resources available for development of the global south.  

At the start of the 19th century, the world population crossed 1-billion people. Eight billion people live on the planet today, with half of the growth occurring since 1975. This rapid escalation in the global population is due to improvements in healthcare and nutrition.  

The UN forecasts that this rapid growth will slow down and may even stop entirely by 2100 due to falling fertility rates led by advanced economies. Fertility rates in the global north have fallen to below replacement levels of 2.1 children per couple, leaving the developed world starved for young people to sustain social programmes and prop up economies. 

Declining fertility rates are a consequence of a confluence of many related factors, such as better access to contraception, improving opportunities for women, beyond childbearing, and robust healthcare that lowers child mortality rates. 

Declining populations and a higher ratio of the elderly to working adults will have serious economic consequences as it pertains to skills and workforce readiness, increased healthcare costs, a reduced tax base and illiquidity of social welfare systems. In Japan, the pension system will experience serious shortfalls by 2030. 

Lomborg’s article is correct that skills migration can help over the short term, but it will become unsustainable quickly. Over the medium term, advances in artificial intelligence and smart economies can rebalance skills requirements. Over the longer term, initiatives to reduce the costs of raising a child and provide better support for families with children may be deployed to counter drastic demographic rebalancing. 

No doubt remittances from wealthier countries constitute a large part of the GDP of many countries, with India receiving close to $100bn annually, insulating the country from recessionary forces, to an extent. And no doubt the more lucrative opportunities for skilled employees to establish family wealth and concomitant improvement in generational upliftment cannot be contested.  

However, most countries in the global south are not in a position to accelerate skills production relevant to the technological age epitomised by the fourth industrial revolution and Society 5.0 — hence much sought-after human capital will wither in supply.  

The developing world is labouring under a severe debt burden, which grew to unsustainable levels post-Covid-19. In Africa alone, sovereign debt accelerated to 60% of GDP and with unfavourable credit ratings eroding much of its fiscal sovereignty, not much is available for skills production and/or the attainment of important development goals.  

Furthermore, Africa — due to its underdevelopment — is bearing the brunt of global warming manifestations which will catalyse the migration of unskilled workers. It is estimated that by 2050, 113-million Africans will be displaced as a direct consequence of climate change raising sea levels and other health-related stressors. 

At the moment, any reversal of this dire situation will require investment and sovereign funding. However, relief for the heavily indebted global south extends only to the rescheduling of interest payments, and yet it is implemented halfheartedly by global financial agencies such as the World Bank.  

To help accelerate progress towards the Millennium Development Goals, the Heavily Indebted Poor Countries (HIPC) Initiative was supplemented by the Multilateral Debt Relief Initiative (MDRI) in 2006. The MDRI provides 100% relief on eligible debts to the African Development Fund (ADF), the inter-American Development Bank, the International Development Association of the World Bank and the IMF for countries completing the HIPC Initiative process. 

Youth dividend

The HIPC Initiative provides comprehensive debt relief to 40 (of which 33 are in Africa) of the most heavily indebted countries in the world pursuing policy adjustment and reform programmes, after they have reached their decision and completion points. The World Bank Group grants countries that qualify for debt relief under the HIPC Initiative an annual debt service reduction of up to 80% of debt obligations as they come due until the full amount of the committed debt relief has been provided. 

This is therefore not meant to dispel the advantages of smoother global skills migration but to point out, that for sustainability reasons, the beneficiary countries (the global north) must invest in the skills development programmes of sourcing countries — especially with a view to develop the youth potential into a real youth dividend in such a manner that the sourcing countries are not denuded from such skills to scaffold their own developmental agendas.  

This cohort will be drawn inexorably to wealthier countries by global market forces. So investment from SA in higher education, for example, is futile in many ways, making investment in skills production not only necessary, but also the development of job prospects for our graduates.  

For example, Bangladesh has successfully rolled out a freelancing programme that drastically reduces youth unemployment and offers access to international markets from home. While there are other social benefits, such as reducing traffic congestion, flexible working hours and earnings in foreign currencies further add to the allure. But we must overcome the issue of the relevance of skills in the new job age, and that speaks to another problem, the growing unemployment of graduates in countries such as SA, which has assumed intractability. 

The world is one organism and the perpetuation of a wealthy north at the expense of an exploited south is globally unacceptable, unsustainable, and harmful to the planet. 

• Dr Carolissen is dean of the Johannesburg Business School and distinguished professor  at the University Woxsen, India.