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April 2008

Sons of the Soil — Bad Economics ?

By Gautam Nayak, Editor
Reading Time 5 mins

Editorial

With this issue, the Journal enters the 40th year of its
publication. While we continue to update you on the latest developments relevant
to the profession, during the course of this year, we also intend to bring you
articles which would provide an insight into what the profession can expect in
the future.


The last couple of months have seen certain political parties
canvassing the ‘sons of the soil’ theory in Maharashtra, and violence being
committed against immigrants from certain other parts of the country. Similar
stands have been taken at times by politicians in different States as well. An
emotional appeal is sought to be made against immigration, on the ground that it
results in jobs being snatched away from locals by the immigrants. Violence is
certainly morally and legally indefensible, and needs to be condemned. Given the
fact that the immigrants are also Indians, and are entitled under the
Constitution to equal opportunities, such a stand is legally indefensible. The
short-term losses caused to industry and trade are clearly visible. The larger
question is — does immigration really adversely financially affect the local
people in the long run ?

It is now universally acknowledged that a country or region
which welcomes immigrants prospers. An expanding workforce facilitates faster
growth, since most immigrants are young and therefore productive.

The classic case of immigration facilitating prosperity is
that of the USA, which has had a high rate of immigration. A large part of the
US economic success is due to the inflow of migrants into that country over the
last couple of centuries. London has become the world’s financial capital,
helped greatly by its policy of welcoming migrants. Countries that take in
immigrants, such as Sweden, Ireland, the USA and the UK, have done better
economically than countries which do not.

The very economic growth of Mumbai itself can largely be
attributed to the influx of immigrants. What would the economy of Mumbai have
been today if it were not for the Parsis, the Marwaris and the Gujaratis, who
came from other places and set up their businesses in Mumbai ?

A United Nations Secretary General report of May 2006 on
International Migration and Development has important findings on the subject,
which equally apply to intra-country migration between different regions.
Growing income differentials have spurred migration. Advanced economies need
migrant workers to fill jobs that cannot be outsourced and that do not find
local workers willing to take up at going wages. As younger generations become
better educated, they are less willing to take up lower paid and physically
demanding jobs. Migration may reduce wages or lead to higher unemployment among
low-skilled workers; however, most migrants complement the skills of domestic
workers instead of competing with them. By performing tasks that either would go
undone or cost more, migrants allow natives to perform other, more productive
and better-paid jobs. They also maintain viable economic activities that would
otherwise be outsourced. By enlarging the labour force and the pool of consumers
and by contributing their entrepreneurial capacities, migrants boost economic
growth in receiving countries.

The report notes that for the full benefits of migration to
be realised, the rights of migrants must be respected. States have the
obligation and must take effective action to protect migrants against all forms
of human rights violations and abuse, and also combat all forms of
discrimination, xenophobia, ethnocentrism and racism. In turn, migrants, just as
citizens, have the obligation to abide by the laws and regulations of receiving
States. Migration policy needs to be complemented by strategies to manage
diversity and promote cross-cultural learning. Migrants have been and continue
to be indispensable to the prosperity of many countries. The leaders of those
countries have a responsibility for shaping public opinion accordingly,
especially through communication strategies that articulate and explain how
existing migration policies are consistent with society’s ability to accommodate
and integrate migrants.

Besides this, what the Government needs to ensure is that
migration is properly managed by ensuring that our public spaces are not
encroached upon by migrants (whether hailing from Maharashtra or outside) for
their stay.

Reservation of jobs for locals is also not the solution.
Reservation in any form is harmful, as it ultimately leads to favouritism,
corruption, suppression of merit and lower productivity. For obvious reasons,
our politicians seek to push through various types of reservations. For
sustainable growth, we must encourage merit, irrespective of the caste or place
of origin of the person.

The only form of help that a meritorious person from a
backward or disadvantaged background needs to come up in life is equal
opportunity and, if required, economic assistance to study — his merit and his
will to succeed will thereafter ensure that he comes up in life, and that the
country as a whole benefits. One hopes that the day is not too far off when
India will move in that direction, notwithstanding the best efforts of some of
her politicians to the contrary !


Gautam Nayak

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