Beruflich Dokumente
Kultur Dokumente
Abdelaziz Testas
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MaghrebEU Migration:
Interdependence, Remittances, the
Labour Market and Implications for
Economic Development
A B D E L A Z IZ TESTAS
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The most common approach to dealing with migration flows from the Maghreb to the
European Union (EU) has been strict border checks. This approach, as shown by this
study, does not take into account the developmental needs of the sending countries.
Maghreb politicians may, as a result, find it less attractive to co-operate with their EU
partners as long as they see migration as a substitute for economic development
efforts. Such a view is particularly based on the positive effects migration is expected
to have on remittances and real wages in the migrants countries of origin.
I. Introduction
One of the main aims of the Barcelona Conference (Spain, November
1995)1 was to discuss ways to curb migration from the Maghreb2 to the
European Union (EU).3 Although the main objective was to deal with illegal
migration, slowing down if not halting other forms of migration were
also on the agenda (if somewhat less explicitly). The main reasons behind
this are economic, but other considerations may also prove to be important.4
While in principle there are several ways to curb the flow of migrants
from the Maghreb to the EU, the most common approach so far has been
strict frontier controls. This approach, however, has acquired limited
success (as evidenced by the continuing flow of migrants) because the
emphasis on border checks involves an underestimation of the real factors
determining migration. By taking this approach, governments in the EU
have not only deprived themselves of possible instruments to regularize and
control the flow of immigrants, but also actually have encouraged illegal
migration [Giubilaro, 1997].
The failure of EU governments to understand the developmental needs
of the Maghreb countries is at the heart of the problem. Naturally, North
African politicians will find it unattractive to co-operate with their EU
Abdelaziz Testas is currently a lecturer in Economics at the Shandong Finance Institute, Jinan,
China. He received his Ph.D. from the University of Leeds in 1997.
Mediterranean Politics, Vol.6, No.3 (Autumn 2001), pp.6480
PUBLISHED BY FRANK CASS, LONDON
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M A G H R E B E U M I G R AT I O N 65
partners over migration so long as they expect significant economic benefits
to be reaped from it. Emigration, for example, is expected to ease the
pressure on the labour market, reduce unemployment, increase real wages,
create a more skilled labour force and generate cash remittances. This
suggests that only when politicians on the other side of the Mediterranean
recognize the developmental needs of the Maghreb will migration policies
lead to tangible outcomes.
One approach that recognizes these needs and works as a complement
(if not an alternative) to stricter border controls is one that contributes to
Maghreb economic development. When the North African economies
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expand and more jobs are created, living standards will rise and political
stability will be maintained. Maghreb politicians will cease to see migration
as a source of revenue and migrants themselves will find it less attractive to
leave their country of origin.
The main purpose of this article is to show that current EU policies
regarding Maghreb migration may not bring the expected results. In other
words, strict border controls may not halt the influx of immigrants. A more
viable approach would be to find ways to contribute to Maghreb economic
prosperity so differences in living standards between North and South
become less pronounced and eventually cease to serve as pull factors.
The rest of this article is organized in five main sections. Section II
shows that migration from the Maghreb to the EU is best understood as a
logical outcome of the growing interdependence between the Maghreb and
the EU. Section III provides evidence of the importance of remittances to
Maghreb economic development. Section IV examines the impact of
migration on the labour market. Section V describes the elements of a
developmental approach that could work as a complement, if not an
alternative, to strict border controls. A final section provides some
conclusions and their policy implications.
66 ME D I T E R R A N E A N P O L I T I C S
Figure 1 shows real GDP growth rates of the Maghreb countries plotted
against real GDP growth rates of France.5 The choice of this country as a
representative of the EU as a whole stems from its special status in the
Maghreb owing to historical reasons. There is also the fact that France itself
is the host of a large number of Maghreb migrants.
The figure illustrates that differences in real GDP growth rates in the
Maghreb are similar to differences in real GDP growth rates in France; the
correlation between the two series, as shown in Table 1, is 0.87 for
Morocco, 0.79 for Tunisia and 0.16 for Algeria. These similarities, however,
are more evident in Morocco and Tunisia as shown by the high coefficient
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F I GURE 1
MAGHRE B- F RANCE I NT E RDEPEN D EN CE, 197391
Algeria
- - - - - Algeria
Algeria France
France
Morocco
- - - - - Morocco
Morocco France
France
Tunisia
- - - - - Tunisia
Tunisia France
France
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M A G H R E B E U M I G R AT I O N 67
TABL E 1
C O R R EL AT I ON COE F F I CI E NT S BE T WE E N MA G H REB A N D FR EN C H R EA L
G D P G R O W T H R AT E S , 1 9 7 3 9 1
Algeria 0.16
Morocco 0.87
Tunisia 0.79
68 ME D I T E R R A N E A N P O L I T I C S
the main outlet for their migration flows. This, as Giubilaro [1997] has
demonstrated, is well supported by statistical evidence: Europe is the place
of residence of over 90 per cent of Algerian and Moroccan expatriates and
more than 80 per cent for Tunisians. As a result, it is estimated that up to 95
per cent of remittances transferred to the Maghreb may have originated in
Europe [Berrada, 1994].
F I GURE 2
T H E PE RCE NTAGE S HARE OF RE MI T TA N C ES IN G D P, 1972 A N D 1991
10
8 9.0
5.6
6
4
2 0.6 1.1 0.7 0.5
0
Algeria Tunisia Morocco
1972
1972 19911991
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M A G H R E B E U M I G R AT I O N 69
F I GURE 3
OUT P UT AND RE MI T TANCE S I N TH E MA G H R EB , 197291
Algeria
1.50
Log Remittances
1.00
0.50
0.00
-0.50
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Morocco
4.00
Log Remittances
3.00
2.00
1.00
0.00
-1.00
-2.00
0.00 1.00 2.00 3.00 4.00 5.00 6.00
Log Output
Tunisia
0.00
Log Remittances
-1.00
-2.00
-3.00
-4.00
0.00 0.50 1.00 1.50 2.00 2.50
Log Output
TABL E 2
C O R RE L AT I ON COE F F I CI E NT S BE T WEEN MA G H R EB R EA L O U TPU T
AND RE MI T TANCES, 197291
Algeria 0.46
Morocco 0.97
Tunisia 0.99
70 ME D I T E R R A N E A N P O L I T I C S
As the figure clearly illustrates, differences in real output in the Maghreb are
similar to differences in remittances. Thus, as data in the figure suggests,
about 95 per cent of variations in real output are explained by variations in
remittances in Morocco. This percentage is higher for Tunisia, reaching 97
per cent, but smaller for Algeria as the coefficient of determination, R2, is
only about 0.2. This suggests that approximately 20 per cent of variations in
real output in this country can be explained by variations in remittances; the
other 80 per cent are explained by other factors.7
The data from Figure 3 also suggest that, other things being equal, an
increase in remittances by one per cent would increase Moroccos real
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output by 0.26 per cent. Similarly, a 1 per cent increase in remittances would
increase Tunisias real output by 0.28 per cent and that of Algeria by 0.30
per cent.
The special role played by remittances in the economic development of
the Maghreb can be confirmed by looking at data in Table 2. This displays
the correlation coefficients between real output and remittances. A positive
and statistically significant coefficient would suggest that the two series are
closely related and move in the same direction. This, indeed, as the table
shows, is the case with the Maghreb countries. The correlation coefficient
is very high for Morocco (equal to 0.97) and almost perfect (equal to 0.99)
for Tunisia. For Algeria, however, the correlation coefficient is lower (equal
to 0.46) and less significant.
Remittances can affect the national economy of the Maghreb countries
through different channels. One of these is imports. Maghreb governments
can use remittances to buy capital goods that are used by local companies
for their domestic production. In fact, due to the large-scale industrialization
programmes that took place in the 1970s and 1980s in the Maghreb
countries, a positive relationship between imports and remittances should be
expected. The need for imports arose because capital goods were of primary
importance to such industrial projects. Since the amount of foreign
exchange available to the Maghreb governments was not sufficient as
industrialization created further needs, remittances played a complementary
role.
The expected positive relationship between imports and remittances can
be confirmed by performing some simple statistical tests. One of these is
correlation and Table 3 presents the estimates. The data confirms our
prediction for Morocco and Tunisia (with respective correlation coefficients
of 0.83 and 0.92) but, surprisingly, the coefficient for Algeria has the wrong
sign (equal to -0.29). The latter suggests that as remittances increase, imports
decrease. Although the reasons for this may not be straightforward, one
explanation could be that remittances are repatriated in a form other than
cash. In this case, remittances would tend to displace imports.
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M A G H R E B E U M I G R AT I O N 71
TABL E 3
C O R R E L AT I ON COE F F I CI E NT S BE T WE E N REMITTA N CES A N D IMPO RTS,
197291
Algeria 0.29
Morocco 0.83
Tunisia 0.92
F I GURE 4
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Algeria
1.50
Log Remittances
1.00
0.50
0.00
-0.50
0 1 2 3 4 5
Log Imports
Morocco
4.00
Log Remittances
3.00
2.00
1.00
0.00
-1.00
-2.00
0.00 1.00 2.00 3.00 4.00 5.00
Log Imports
Tunisia
0.00
Log Remittances
-1.00
-2.00
-3.00
-4.00
0.00 0.50 1.00 1.50 2.00
Log Imports
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72 ME D I T E R R A N E A N P O L I T I C S
M A G H R E B E U M I G R AT I O N 73
level of unemployment between the Maghreb and the EU. As a result,
equation (1) becomes:
LFME = ME (wE wM) + ME (UE UM) (2)
where unemployment rates (U) are included as new explanatory variables.
The higher the level of real wages and the lower the level of unemployment
in the EU compared to the Maghreb, the greater will be the migration of
labour from the Maghreb to the EU.
The impact of migration on real wages in the Maghreb can be explained
with the help of Figure 5.10 In this figure, OEOM denotes the total labour force
in the EU. Employment in EU countries is measured towards the right and in
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F I GURE 5
T H E I M PACT OF MI GRAT I ON ON T HE L AB O U R MA R K ET IN TH E MA G H REB
W W
WE
W* E
W*
WM
OE
L0 L1 OM
74 ME D I T E R R A N E A N P O L I T I C S
TABL E 4
R E G R E S S I ON RE S ULT S F ROM T HE F L OW AN D WA G E EQ U ATIO N S, 198092*
R2 0.26 0.40
where GF and UA in equation (3) denote the percentage change in the total
flow of migrants, and unemployment rates, respectively, while WA and FA
in equation (4) denote real wages and the flow of migrants, respectively.
The two parameters, and , capture the impact of other missing
variables. Equation (4) is estimated in logs.
Equation (3) indicates that an increase in Algerias unemployment rates
would encourage people to migrate, so there is a positive relationship
between GF and UA. Similarly, equation (4) shows that an increase in the
flow of migrants, FA, raises real wages, WA at home.
The estimated coefficients, their standard errors and the coefficients of
determination, R2s, are reported in Table 4. This also shows the estimated
correlation coefficients between the series in question. The most striking
result is that an increase in unemployment rates in Algeria does seem to
have encouraged people to migrate. The estimated coefficient is very high
and statistically significant suggesting that an increase in unemployment
rate by one per cent would lead to an increase in the flow of migrants by
more than four per cent. The correlation coefficient is calculated at 0.51 a
reasonable estimate given the small size of the sample.
Another important result is the positive impact the flow of migrants may
have had on real wages in Algeria. It is estimated that an increase in the flow
of migrants of one per cent would increase real wages at home by about 0.70
per cent. This relationship is confirmed by a positive and reasonably high
correlation coefficient, equal to 0.63.
These results do not seem unrealistic, especially with regard to the
possible impact of unemployment on migration. This is likely to be the case
not only in Algeria, but also in Morocco and Tunisia. While unemployment
rates in these countries were generally low during the 1970s, they started to
rise in the 1980s and they were quite high in the 1990s. Unemployment was
estimated in 1992 at about 14 per cent in Algeria, 13 per cent in Morocco
and 16 per cent in Tunisia. In absolute figures, these translate into the
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M A G H R E B E U M I G R AT I O N 75
following: 1.5 million unemployed in Algeria, 1.1 million in Morocco and
400,000 in Tunisia [Giubilaro, 1997].
Unemployment particularly affects young people under the age of 25
and first-time job seekers. In Algeria, 67 per cent of the unemployed in 1992
were under the age of 25, and first-time job seekers accounted for about 64
per cent of all job seekers. In Tunisia, more than 45 per cent of the
unemployed in 1989 were looking for work for the first time [ibid.].
The above situation may have contributed to the rise in the flow of
migrants from the Maghreb to the EU. As a matter of fact, the above situation
is well captured by the human-capital model described by Hansen et al.
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[1991]. In this model, which differs from early analyses of migration [e.g.
Todaro, 1969] which emphasized the aggregate equilibrating effect in the
labor market and the role of urban unemployment in the migration process,
a migrant is no longer a supplier of labour but an investor. More precisely,
the migrant makes an investment decision in which the time factor is
important. If an individuals personal estimate of costs and benefits in a time
perspective gives a positive present value (PV), which corresponds to a
capital gain on human capital, emigration will follow.
Equation (5) shows the present value for a simplified case which only
includes on the benefit side the real income difference (YE YM), and on the
cost side the initial removal costs, RCEM:
PV = (YE ,t YM ,t )/ (1 + r ) RC EM
n
t (5)
t =1
where t denotes time in years, n the duration of the investment horizon and
r the rate of discount.
The human-capital model, as Hansen et al. [1991] point out, provides
several interesting results which we believe are relevant to the Maghreb
case. For example, since the duration of the investment is longer for young
people than for old ones, young people have a longer period in which they
can write off initial removal costs, so the probability is greater that young
people will move. In the case of the Maghreb, this is almost 100 per cent
possible if one takes into account the unemployment rates discussed above
for young people and the first-time job seekers.
76 ME D I T E R R A N E A N P O L I T I C S
M A G H R E B E U M I G R AT I O N 77
There are also impediments arising from administrative procedures and
unpublished policies, structural rigidities in the Algerian market, and
political, cultural and social institutions that work to discourage foreign
inward investment.
This suggests that, for free trade to serve as a model for easing migration
pressures, the EU and Maghreb countries should speed up the process of
capital movement by creating an environment conducive to foreign direct
investment, in particular by the progressive elimination of obstacles to such
investment. The forces underlying capital movements, as shown by the
standard international investment theory, point to a tendency towards
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78 ME D I T E R R A N E A N P O L I T I C S
NOTES
1. This resulted in the Barcelona Declaration whose aim was to create a free trade area (FTA)
between the Maghreb and the EU by the year 2010.
2. This term is used here to denote three countries Algeria, Morocco and Tunisia involved
in the Arab Maghreb Union (AMU) of 1989.
3. EU countries traditionally affected by Maghreb migration include France, Germany,
Belgium and the Netherlands. Spain and Italy are also among the member countries now
affected by this phenomenon.
4. Economic reasons against migration in general usually centre on the expectation that
immigrants are likely to impact negatively on the wages of the native population. While the
debate on this has not yet been resolved, studies have shown that this negative impact is
likely to be very small [Borjas, 1994]. Since the volume of migration to Europe from the
countries of the Maghreb is not very considerable (about 0.5 per cent of all residents)
[Giubilaro, 1997], non-economic considerations (for examples, cultural and religious
differences and the current political situation in Algeria) may be more important (see, for
example, Geokas [1997]).
5. These are denominated in a single currency, the US dollar. The data used come from the
World Bank [1994].
6. These estimates are shown in Figure 1 as coefficients of regressions as denoted by Coef.
Their standard errors are denoted by SE in that figure.
7. It must be noted here that one is exploring a one-to-one relationship and the probability that
other factors may also be important is not zero. The current practice, however, is not
unrealistic given the small number of observations available for estimation (that is, from
1972 to 1991). There is also the fact that, although the study of migration is not a new
subject, the methods used are still provisional. In general, the issue of spurious correlation
should be borne in mind while speaking about causal relationships.
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M A G H R E B E U M I G R AT I O N 79
8. In fact, this share is even more significant as a percentage of the Maghreb countries foreign
trade. In 1991, for example, the percentage shares of remittances in Moroccos total exports
and imports were about 40 per cent and 30 per cent, respectively. For Tunisia, these were,
respectively, about 15 per cent and 14 per cent [World Bank, 1994].
9. This, as will be shown below, implies that the speed of the process of equalization of real
wages in the EU and the Maghreb is low.
10. This draws on Hansen et al. [1991].
11. Wage and unemployment statistics come from the National Office of Statistics (Algiers),
while data on the flow of migrants come from Giubilaro [1997] and the US Immigration and
Naturalization Service [1998].
12. Some studies [e.g., Gillespie, 2000] have suggested that political considerations may even
carry more weight in European strategic plans.
13. Testas [1999b] provides estimates of such increases in imports.
14. The extent of such effects, however, depends on the degree of trade liberalization. If the
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FTAs proposed in the Euro-Mediterranean Partnership (EMP) turn out to confine themselves
to tariff and import quota removal, the above impacts are likely to be smaller in magnitude
than initially perceived. This possibility should not be disregarded since it is well known that
market access to the Maghreb region is hindered not only by tariffs but also by administrative
and other non-quantitative barriers to trade. It should also be noted that the adverse effects
of trade liberalization are expected to be a short-lived phenomenon because free trade will
eventually increase efficiency and real GDP growth rates, hence employment and living
standards, which is expected to reduce migration pressures.
15. See Martin [2000].
16. In general, formal barriers refer to those stemming from government regulations and
legislation that are aimed deliberately at restricting foreign investment. Informal barriers
include policies that, while not specifically targeted at inward investment, none the less
impact on foreign investors. For example, legislative or regulatory restrictions on cross-
ownership of financial institutions that may be erected for prudential or competition policy
reasons can have the effect of restricting access to foreign firms that operate in jurisdictions
that permit such cross-ownership. Economic, political and cultural institutions that influence
the prospective profitability of inward investment may also act in non-obvious ways as
informal investment barriers.
REFERENC E S
80 ME D I T E R R A N E A N P O L I T I C S
Testas, A. (1999a): The Dynamic Impact of Tariff Liberalisation between the European and
Maghreb Unions: An Empirical Analysis, Journal of North African Studies 4/4, pp.5160.
Testas, A. (1999b): The European Unions Global Approach to the Mediterranean Area,
Development Policy Review 17/1, pp.2541.
Testas, A. (2000): The Contribution of EUs Investment to Tunisias Economic Development,
Journal of North African Studies 5/2, pp.924.
Todaro, M. P. (1969): A Model of Labour Migration and Urban Unemployment in LDCs,
American Economic Review 59, pp.13848.
World Bank (1994): World Tables, Oxford: Oxford University Press.
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