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Combating causes of flight: Money alone is not enough

Haluka Maier-Borst
February 15, 2018

Is it possible to stop people from migrating by increasing financial aid to developing countries? DW research shows this may be effective in some cases. But aid money alone cannot stop major migration waves.

Refugee camp in Nakivale, Uganda
Image: DW/S. Schlindwein

Read this article in German.

It wasn't too long ago that the images of Germans euphorically greeting asylum seekers at Munich's central station captured global attention. Angela Merkel’s refugee policy saw her chosen as TIME magazine’s Person of the Year in 2015. Other European countries also opened their borders to the needy and those hoping for a safe future. But that culture of welcoming refugees did not last long.

Two years on, and the situation is different. Political parties running on an anti-immigration platform, such as the Alternative for Germany (AfD), or France’s Front National, are gaining popularity in Europe. And even moderate politicians want to reduce immigration,arguing that the West cannot accept an unlimited number of people.

The European Union's strategy is to combat the causes of migration, in part through financial aid. Since 2015, the climax of the refugee crisis in Europe, the EU has allocated €3.2 billion ($40 billion) under the "EU Emergency Trust Fund for Africa"to tackle the causes of "irregular migration." But can this really work? The cautious answer is that it can.

Deutsche Welle has evaluated OECD data for all developing countries over the last twenty years. This involved analyzing statistics on the level of financial aid that developing countries have been receiving, and matching this data to the number of people who emigrated from these countries. It turns out that if more money is given to developing countries, it can prevent an increase in the proportion of people who emigrate, and possibly even reduce these numbers in the long term.

This is particularly evident in East Africa, West Africa and the Caribbean, where the level of development aid that flowed into the country had a direct impact on the number of people who left their homes. DW’s analysis is based on a methodology developed by the economist Rainer Thiele from the Kiel Institute for the World Economy. According to Thiele, "If development aid is invested appropriately in the long-term, it can help people stay in their home country and establish something there."

Data visualisation: Emigration and Development Aid in Eastern Africa
Each point represents a three-year average amount of development aid received by an East African country, and the levels of emigration that that country is experiencing this year. The higher the level of development aid, the lower the emigration rate. The orange line shows the common trend across all points.

In principle, however, it is also possible for development aid to have adverse effects. For instance, if development aid only leads to people in the country having a higher income, it actually boosts emigration. The reason for this is that more people can afford to emigrate. There is only a reverse in this trend once average incomes approach the level of industrialized countries. At this point, more people remain in their home countries, or migrants return. Economists call this phenomenon the "migration hump."

Targeted investments are essential

But there is another form of development aid which has increased, especially in recent years. Instead of simply spreading the money widely, it is invested primarily in social services. And this can, in the short-term, actually reduce the desire to emigrate, says Thiele. In concrete terms this means, for example, hospitals are given more X-ray equipment and beds, or schools receive more books and teachers.

Ethiopia is a positive example of this kind of successful development policy. It is the African country that received the most development aid from EU countries and institutions in 2015, with a total of around €830 million ($987 million). According to Thiele, massive investments have been made in the social sector to improve medical care and education. In addition, decisive action is being taken to fight corruption. As a result, the country is doing better, people are seeing a long-term perspective and emigration is gradually declining.

Data visualization: Emigration Ethiopia

Neighboring Eritrea, on the other hand, is an example of the exact opposite. Since the mid-2000s, development aid has been steadily declining, which seems to have exacerbated existing problems. For some time now, experts have described the country as lawless,and have criticized the fact that the state is practically forcing citizens to perform unlimited military service. Some estimates show that as a result, up to three percent of the population has fled, because they no longer see any prospects in the country. In 2015 alone, around 33,000 Eritreans applied for asylum in the EU, making it the number one African country from which people are emigrating.

Data visualization Emigration Eritrea

Long-term decline in refugees

However, economist Axel Dreher from the University of Heidelberg is skeptical about Thiele’s study and DW’s analysis. In a previously unpublished study, he himself looked at the impact of development aid on refugees, rather than numbers of economic migrants. He concluded that in the first few years, development aid serves to fuel migration. Only much later, with a lag of more than ten years, is it possible to see a decline in the number of refugees. "I don't think development aid can actually reduce migration levels within three years," says Dreher.

DW's data shows a common pattern: The breakdown of development aid often goes hand-in-hand with a rapid increase in emigration. An aid increase that leads directly to a reduction in emigration can only be observed in isolated cases, such as Ethiopia.

"Migration patterns strongly depend on existing migrant networks. For the first wave of people, emigration is still difficult. But if, for example, a large community of Eritreans is already living in Germany, then it makes it easier for others to follow," explains Thiele.

Development aid can therefore have a preventive effect. However, once the flow of emigrants has started, it takes much longer to stem it, and development aid can only help to a limited extent.

Taking early action

There is also another catch. Looking at the countries from which most people are currently emigrating to OECD countries, one thing becomes clear: Many of these are war and crisis zones, such as Syria, Iraq and Afghanistan.

"Of course, these regions are no longer concerned with the financial situation, but with bare survival," says Thiele. And also in the other countries in the Top 10, where there is no war, such as Vietnam, the Philippines and India, it is evident that an increase in financial assistance is not necessarily accompanied by a decrease in emigration.

In the end, this shows that more development aid can only marginally reduce migration flows. "Other factors are considerably more important," says Thiele. He and Dreher agree that in the future it will be necessary to react much earlier in crisis situations. The West should intervene as soon as refugees start arriving in the neighboring countries to crisis areas. "You can’t wait with reacting until destitute people are standing on your doorstep," says Dreher.