Workers Sans Frontiers

01 January, 2011

Relations between nations, including international trade, are very much akin to symbiotic relations observed in the natural word, in which different organisms become mutual beneficiaries because their lives depend on it. Countries come together to develop symbiotic, reciprocal associations, some of which involve exchange of goods and services. The most rudimentary example of this is a country abundant in agricultural products trading with one that has surplus oil, each thus complementing the other’s shortage.

However much we wish for such one-to-one simplicity, though, the international trade environment that we live in demands quid pro quo relations of enormous complexity. And going beyond trade of goods and services, this also includes the exchange of ideas and the intermingling of cultures. The common concern that nations are now being made to share, in this increasingly integrated world economy, includes matters like employment opportunities across borders. In fact, in parts of the world, the international movement of labour has become far too important for companies to leave to governments alone, because the free flow of this traffic allows companies to engage the right talents at the right price and maintain the competitive advantage.

And when people move, so do ideas, bringing with them not just intellectual stimulation but the socio-cultural enzymes so necessary to spur growth. But, much like trade in goods and services, the movement of labour across borders can only be effective if nations follow the basic principle of symbiotic relations—give-and-take, not just one nation with another but many nations interconnected by a web of synergy. If a country wishes to partake of the benefits of the booming international economy by the out-migration of its people in search of better work opportunities, it must reciprocate by laying the welcome mat. This equitability of exchange is, unfortunately, where the Indian government seems to be falling short.

According to the Migration and Remittances Factbook 2011 recently released by the World Bank, India was the largest recipient of remittances in 2010 at 55 billion dollars. India is also the second-largest source of migrants in the world, with 11.4 million people having left the country to work abroad in 2010.

One would think that with such a huge inflow of remittances, and with such high levels of manpower out-migration, India would be a true champion of a globalised world order, free of any restriction on the movement of people across borders.

On the contrary, recent policy directives by the Indian government regarding foreign nationals working in India suggest that while in principle we espouse the cause of an increasingly integrated global economy with a seamless, planetary movement of workforce, we would in fact much prefer to limit this benefit to Indian nationals seeking work abroad, blocking the corresponding privilege for foreign nationals who wish to work in India.

In December 2009, the Indian government had introduced an employment visa quota under which Indian companies had to restrict the foreign nationals they employed to 20 or no more than one percent of their workforce, whichever was less. This was patently absurd, considering the scores of firms in the US that have Indians as a sizeable proportion of their workforce.

Following much criticism, the government removed this restriction a few months ago, only to replace it with an equally incongruous directive. According to it, Indian companies can now only employ foreign nationals who they pay an annual salary of more than 25,000 dollars. When compared with India’s per capita income, which stands at about 1,200 dollars per annum, our government expects Indian companies to employ foreign nationals at more than 20 times the average national income.

Now, imagine the US government permitting foreigners to work in the country only if their annual salary tots up to around a million dollars (about 20 times the per capita income of US). Compare that with the median annual household income of American residents born in India, which is around 100,000 dollars. Furthermore, obviously only a minuscule percentage of the 11.4 million Indians who went abroad this year are drawing salaries more than 20 times the average national income of whatever country they landed up in. The Indian government really should be more cautious. If every nation were to take a cue from its policies, the repercussions on our economy could be unfortunate.

When it comes to employment opportunities, the instinctive reaction of most governments is to keep those treasured jobs for their own people. The more nationalistic and the more insular a government, the stronger is such parochial thinking.

In the long run, however, protectionism doesn’t work; in a symbiotic economic environment, a migrant workforce should have the same rights as the workforce that has stayed put. This is especially so in case of India, whose 11.4 million citizens leave the country each year for working abroad, adding to the pool of many million already employed outside.