December 11, 2002	Wednesday	Shawwal 6, 1423

LONDON: The European Union has agreed that 10 new members will be admitted in 2004, final negotiations for which take place at a summit in Copenhagen this week. This will entitle them to the four freedoms of open access enshrined in the treaties: for goods, services, capital and labour. Well, not quite.

Allowing open labour markets has, for some member states, been a step too far. Lengthy transition periods have been imposed on movement from countries such as Poland, Hungary and the Czech Republic into their nearest neighbours, Germany and Austria. But is the fear of allowing complete transition immediately justified, and does it perhaps ignore the real problem in the future?

There are two myths that need to be dispelled. The first is that there is a wave of potential migrants waiting to flood into western European labour markets, displacing local labour, increasing unemployment and depressing wages. Certainly, it is true that after 40 years of repression, migration into the EU from the east boomed in the early 1990s. Although this did include big increases, from Poland in particular, the major sources were further away, namely the former Yugoslavia and the former Soviet Union. Most of this movement turned out to be not traditional, permanent migration, but a reflection of a new trend towards planned short stays. Such movements — usually for a few weeks or up to a year, often repeated at regular intervals — were reinforced by immigration controls that allowed for seasonal or contract migration, but not for permanent settlement. By the mid-1990s, both gross and net migration flows into Germany had returned to their long-term historical levels.

Flows at this level are likely to have an insignificant impact on the numbers of resident migrants in the countries. Even in Germany, which has the highest proportion of foreign residents in the EU at nearly 9 per cent of the population, migrants from the candidate countries accounted for less than one per cent of the resident population.

The people who make these moves are typically young, male, better-educated workers from urban areas. On moving, they often have to accept jobs below their skill levels. The evidence shows that the availability of a more mobile labour force in the EU may serve to help in freeing up some notoriously inflexible labour markets. The major impact is, therefore, not a simple increase in labour supply which contributes to unemployment and lowers wages, but rather one which can help indigenous workers to move to better jobs.

The second myth is that, even if labour mobility can be shown to be good for the receiving regions, it must be bad for the home region. The drain of young, educated more dynamic workers must make the transition to sustainable development more difficult, and ensures a cycle of continuing dependency. However, mobile workers send money back to their families at home.

Recent research, however, suggests that in a sample of central and eastern European countries the greater impact is actually on investment. Surveys of migrants suggest that a strong motivation for moving is to acquire enough capital to set up small businesses.

Another argument is that if migrants move for a relatively short period, in which they acquire new skills or experience of modern working practices — even if working in low-skill occupations — on their return they contribute to the much-needed increase in productivity. This effect is confirmed in recent research. Thus, the type of relatively short-term migration we observe has a strong positive impact on the home region, as well as on the receiving region.

So if enhanced mobility presents such a win-win situation, why do some countries find it so difficult to accept? There are two dark forces here, one inside and one outside. Inside the EU, with recession and sluggish labour markets, it is difficult to make the argument that allowing in more people will make things better, even where the evidence suggests that the injection of dynamism will do just that. Mischief can easily be made with misleading projections of likely flows of migrants rather than their ultimate level in the overall population.

The second problem lies in the potentially much larger source of migrants who will remain outside the EU after enlargement. Most of the accession countries — such as Poland with Ukraine — have relatively open borders, which will have to be closed on entering the EU. This curbing of traditional flows across often artificial post-1945 borders may be the real problem area, and one in which the new members will need understanding and support, not isolation.—Dawn/The Guardian News Service.