International economy: concepts, trends, and global trade

International Economy

Does immigration and migration from a country really affect the economy of the country? Britain is not new to both. For over two centuries Britain was the centre of an empire where the sun never set. In the periods of industrialization in the 17th century to the end of the Second World War, Britons have emigrated to most part of the Empire, and many groups of people of different ethnicity have immigrated into Britain. During the days of the empire both these served as the basis for the economic development of Britain and were the mainstay of the strength to over come two great world wars. However the situation is reversed today.

There are immigrants and emigrants in the modern times and these create ripples in the economy like never before. Britain does not have her colonies any more, and the economy is in isolation, and a part of the European Union. Immigration has been restricted to the members of the union and there are moves to keep others especially Asiatic out. Thus the country welcomes Europeans and consequently will find people of English origins emigrate to Europe and even the Middle East. This paper analyses the problems of the mass movement of people to and from Britain and the impact it may have on the economy of UK in future. That the changes in population will undermine the status of the nation is never in doubt.

What does immigration and migration mean?

Immigration and migration are to be seen in two contexts. The first is the immigration into Britain of alien population and emigration of Britons to other countries. These population changes bring a lot of progress and also problems with it for the economy as a whole. On the other hand immigration into cities in Britain also occurs on account of population shifts within the UK from Ireland for example. Emigration from cities to remote places within the UK also occurs. Are we right in calling these changes as immigration and emigration? Although in the true definition of the term, we ought to include exits and inputs to and from the state, we also have to consider the effects of migration from hinterlands to cities both by Britons and others. This causes a lot of change in the society. For example if there are more immigrants and Britons flow out of the country with the aggregate being more immigrants, then it follows that politics will change with the change in population. Thus political views, social views and the basic culture of the British will be eventually replaced by a mixture of foreign cultures based on the individual communities wants. Thus Britain will have to accommodate Islam and the shariat in the laws, on account of migrant Pakistani workers, and have to accommodate other languages other than English. This will have reflections on the literature, faith and culture of future Britain.

What are the impacts of migration and immigration on the Great Britain's economy in long and short run?

The major problem both for the short run and the long run will be the increase in the population in UK which enhanced by 281,200 by the year 2004. Migration had a big impact on the population increase with one million two hundred and thirty thousand of the population out of one million five hundred thousand or eighty one percent and of these 430,000 illegal migrants in the UK. The net emigration of British born people (see appendix for statistics) shows that less than ten percent are women between the ages of fifteen to forty-four. The statistics of the Office of National Statistics -- ONS appended show that UK's total head count was greater than fifty million in the year 2004. There have been more births to immigrants in UK than the native women who had emigrated from the country. Further the statistics appended show that in 7 years the population growth was more than the earlier population of cities like Birmingham of about 977,000 and Nottingham of about 267,000 combined. There is no data on the illegal immigrants which is estimated to add two million every ten years. (Migration Watch UK 2005)

The second problem is that Britons are abandoning Britain and as a result the English will become a minority in the country. This is likely to have devastating effects. One reason for this is the unabated emigration of Britons to other shores. Nicholson-Lord (2004) says that UK citizens are moving out of UK at a fast pace. They have second homes, in far off places like Canada, West Indies and have invested in Middle East. It has become the fad of the British middle class. Already natives own one hundred and fifty one thousand second homes in Wales and other places in England. This is very tardy as compared to the value of property that Britons have invested overseas. For example it is estimated that over seven hundred and fifty thousand homes in Spain are owned British subjects, and about the same figure in France, and many places in U.S., Portugal, and Eastern Europe. That means that about 1.5 million people, that is about six percent of the British population want to move out of Britain giving up their domicile and move to another country. This does not merely apply to the affluent but even those people who are not so well off. Given an opportunity they would move out. (Nicholson-Lord 2004)

Nicholson also points out that in polls conducted separately by ICM and YouGov shows that over half of the respondents had expressed a need for leaving Britain. Thus fifty five percent of the respondents wanted to seriously examine the possibility of settling down in any other part of the world by leaving UK. Nicholson also comments on a similar survey done by the 'Offshore Bank Alliance & Leicester International' as well as the 'Centre for Future 2020' -- which was wider and the report predicts that in the coming decade over 6,000,000 Britons would have migrated abroad. This aspect has been overlooked while there is a great concentration on immigration, the emigration issue does not find examination by the concerned authorities. The net result of the count is that more immigrants are seen than emigrants.

Why do people want to leave Britain? Nicholson-Lord (2004) commenting on this quotes the 'Emigrate Magazine' which published the fact that emigrants from Britain have a very poor opinion of the quality of life in Britain, which according to them is getting worse. Problems ranged from traffic snarls to crime, and taxes, lack of space and other ills. According to the majority, Britain is headed towards a stand still. Better quality of life was one of the reasons for moving abroad along with living costs, and the general pessimism about Britain and the average Briton's detachment to homeland. As per Nicholson-Lord (2004) an important aspect is that the problem with investment in the UK property was that what was a great investment decade ago has now become a bad bargain. On the other hand the other countries have less tax and better property laws. For example the French property law and taxation are much better than what is prevalent in UK.

Research by Champion (1999) showed that migration has an important influence on the growth of UK cities in the 1990s and later. London seems to have absorbed most of the migration balance, including the international population and asylum seekers. Some cities like Merseyside showed a ten percent reduction with regard to its populace. West Yorkshire will have seventy one thousand more people by the year 2021.

It is also showed that London will expand in population to extra 662,000 by 2021. There is thus for cities, domestic migration and overseas migration. The domestic migration and the international migration have great effect on city populations. There will be vital changes in the character of the labor force and this will be positive, considering that that those who move in with technical or professional skills will help growth in most economic areas. (Champion 1999) Thus immigrants abroad, and the migrants from within the country, that is from the other areas of UK are the reasons that London has greater need for managerial and professional staff, in spite of the fact that there are vacancies in factories for skilled workers like machine operatives, sales and many labor- based occupations. Unfortunately research is lacking in these areas.

What has Great Britain government changed or do to face the problems that came from migration and immigration?

Though there is great respect in Britain for the individual and human rights, and is a part of the culture, the attitude to the UK immigration policy is simply to control opportunities for aliens in entering Britain, and every attempt is made to avoid the migrants from permanently settling in UK. Thus the British citizenship policy after 1971 is discriminatory. (Messina 1995) UK is one among the countries that have least problems with the policies regarding immigration. The '1971 Immigration Act and Immigration Restrictions', that are in vogue now has least controversy, compared to restrictions elsewhere. The policy is now well defined.

The huge flow of people from abroad, particularly from the Eastern European region, was having a great strain with regard to society, health, jobs, housing and health. Majority of the UK populace view that migrants are responsible the increase in HIV, other types of diseases, crime, as well as taking away the manuals jobs of the local population as a result of their effort to work at low remuneration as well as long working hours. Economists are of the view that the economy has had advantages of about 6 billion annually from the migrant employees. (Roberts 2007) This comes from the income tax and VAT, which is a part of the Treasury to be used in creating schools, hospitals and transport. It is true that the migrants have created lot of strain and demand with regard to education and health system as well as on the local leadership. On the other hand the key jobs which native Britons shun are done by immigrants. Some of the fallouts are increase in crime rates and deterioration of standard of life.

Immigration has different set of crimes coming up. One problem is the language difficulties that cause problems in investigation. There is also a lot of racist abuse with the settlers being the victims and perpetrators of racist abuse. There is no notion for many on how to have accessibility to health care, and what the nature of their rights is with regard to work. However most of them have access to work. (Roberts 2007)

What are the roles that EU has played?

Since World War II, European countries had international movement of persons and these were the result of political instability, labor seekers, refugees, and in Britain there was immigrants from the colonies which gained independence. The problem with the migrant population is that it comes from a cultural background different from the local population. In the whole of Europe migrants were from poor countries. (Adler, Gielen 2003) "Crimes increase on account of the hate crimes against immigrants and refugees. France for example has 5 million legal foreigners and even illegal immigrants" (Adler, Gielen 2003) The problem in Europe is unique. In France for example "Immigrants are Arabs and Turks in Germany are not integrating into the system. Britain has problems with Pakistanis. These alien immigrants are not only becoming numerous but are taking over the administration of schools, housing complexes and neighborhoods." (Adler, Gielen 2003)

One important fact is that the strife all over the world has increased the number of asylum seekers. As against the applications received in the Western Europe region of about 104,000 during the year 1984, the applications received was 400,000 during the year 1999, although most of these go to the European Union. (Hall 2000) Hall (2000) says that the EU's population is ageing, and there could be a need to selective immigration. Migration was a part of European economic activities with "merchants, craftsmen and intellectuals crossed the continent to practice their trades or start new lives. Millions emigrated from Europe, first to the colonies and later to the Americas and the Antipodes." (Hall 2000) There were forced migrations of the Jews, and other ethnic groups. Migrations to UK and France were the highest from the former colonies and this lasted till the oil crisis of 1973. One striking example of immigrants who are highly skilled can be show in UK during the year 1997. Then "nearly half of the 54,000 permits went to Americans and Japanese mainly in highly skilled jobs." (Hall 2000)

Does the Britain currency play also any role?

The pound is higher compared to most currencies and the value of the pound does not seem to play any role in immigration. This is because immigration is observed to the Middle East where the Dinar is not as costly in terms of exchange with the pound or dollar. Immigration for Asia is mostly based on the glamour that Britain has retained as the former colonizer. Immigrants'd not bother about the currency rates. Investing by Britons elsewhere is actually to their disadvantage because of the changes in value and hence we may conclude that the currency has no part to play in the phenomenon.

However the globalization has changed the perceptions of investment and currencies are fluctuating in the market as per the global trade on a trade day. There cannot be any special impact on the ordinary person in the currency exchange rate unless the person is transacting in international money on a daily to even annual basis. The value of the Pound is relevant to those immigrants who arrive in the UK and repatriate funds to the country of origin to their dependants in those countries. If the value of the other currencies is lesser than the Pound, then the recipients get the benefit of the difference in their own currencies. This can only be a fringe benefit or perhaps an advantage in migration but is not the primary motive in migrating to or from Britain.

What is the future of Britain's economy?

It is argued that both immigration and emigration creates economic advantages for the prevailing British populace. On the other hand it is also argued that immigration will place a lot of demand on public services, society, environment, housing projects as also the life quality. (Migration Watch 2009) There has been immigration of one million from the EU and half a million are always in the UK. Further it is reported that over half a million immigrants enter UK each year. This can be contrasted with British emigration from 96,000 in 2007 to 237,000. (See appendix for statistical data)

The impact of immigration always is the rise in population. There will be an increase to 10 million during the forthcoming twenty years in UK. Of these 70% will be caused by immigration and some of the latest trends show that recession is likely to reduce immigration but be temporary. The foreign immigration reached 333,000 in 2007. Further the 'projections' of the government with regard to 'household' state that immigration would create the future thirty-nine percent of all of the 'new households' during the forthcoming twenty years. (Migration Watch 2009) The one thing accordingly is the irrational policies that are followed by the government, the chief of them being the tax policies. Taxes can be excessive as in Britain. Thus the tax policies of other nations are an important fact that could increase the possibility of investment being made in a country that offers free trade zones and lesser tax than the parent country to investors.

In the examination of this fact the Shelter Offshore Report (2009) titled "Are Offshore Tax Havens Benefiting from British Higher Rate Tax Payers' Wealth?" points out that the British government's tax policies are making citizens invest offshore from the UK. She claims that beginning of April 2009 the UK government proposed to tax the high earning group much more compared to the less earning group. However they want to place a cap with regard to any relief pertaining to taxation; which the high income group now enjoys on account their investments and savings. The taxes in UK are expected to rise to 50% with tax relief of 20% at source to pension contributions, and if a person's earnings are above £100,000 per annum, the income tax personal allowance will be completely eliminated. And any country that offers a lesser income and other tax rates will naturally attract investments. Thus we must bear in mind that tax competitiveness could be a key to spurring on the investments and consequently the real estate development. This is the primary cause that makes Britons invest in the Middle East and other places.

Unfortunately the future appears bleak. Unless the following steps are initiated as fast as it can be possible, the future of Britain being swamped by people from other countries and Britain losing her identity cannot be avoided.

1. It is mandatory that illegal immigrants be fished out and sent home which must be done in a war footing.

2. There must be some special economic incentives given to Britons who invest in Britain and this though sounds discriminatory must be specially arranged for the British and as opposed to the immigrants.

3. Voting rights of immigrants who have entered Britain within the last 50 years ought to be suspended. As against that, there must be special incentives given to Britons to educate themselves in technical fields so as to be competent enough to find work at home.

4. Immigration from any nation has to be suspended for the next 50 years closing the borders to all but tourists.

5. The tax policies have to be revamped making it possible to earn revenue from the immigrants for the services provided by the state and provide tax holidays to native Britons selectively even though it appears discriminatory.

6. Britain must thus effectively weed out illegal immigration entirely and then contain people from emigrating over seas. For this investment abroad could be taxed while domestic investment be given maximum benefits. By these acts the problem that is imminent- of Britain being run over entirely by immigrants could be solved.

Conclusion

The problem is of persons from all over the globe immigrating into Britain and emigration of Britons to other countries. Both of these are likely to have adverse effects on the Polity, economy and culture of the country and at the rate which the population is growing, the minor economic advantages that are not seen with the immigrant labor will disappear. As the immigrants move up in the income scale, the jobs now that they do will still have no takers. It is better therefore to find alternate solutions rather than to rely on immigrants for labor. Mechanizing could be considered. The major problem both for the short run and the long run will be the increase in Britain's population of aliens with the majority of Britons abandoning Britain. This will ultimately reduce or remove the British culture, polity and social system of Britain and we will see the Briton becoming a minority in the country.

The pressure on economic resources has made the quality of life in Britain poor. To counter these, the government must change the fiscal policies, and the British government's tax policies. The important thing to do is to deport illegal immigrants in a war footing. Even if it is discriminatory, some economic incentives given to Britons who invest in Britain for the British and as opposed to the immigrants. To prevent the immigrants from taking over the government rights of immigrants who have entered Britain within the last 50 years to vote ought to be suspended. Finally we have to close the doors on all immigration for the next 50 years. With these some betterment can be expected.

Appendix

Roger Penn (2009)

Phases of International Migration

* 19th Century: Large outflow from the UK to the 'White' Dominions and USA

* This accelerated after 1873 and the onset of the Agricultural Depression

Nineteenth Century Immigration to Britain

* Nineteenth Century: Inflow from Ireland to Rest of UK

* This was sparked particularly by the Irish Famine of 1845-6 [1-2million dead]

* 1851 Census of Population: most people living in England, Scotland and Wales were born in these countries

* Liverpool and Glasgow* both had very high concentratrions of Irish immmigrants [almost 50% in 1851]

Immigration in the Period 1914-1945

* Immigration controls introduced in 1905: Aliens Act

* This was a response to Jewish immigration to Britain from Eastern Europe & the Russian Empire

* Immigration procedures and passports introduced to control the movement of people [cf Foucault's notion of 'surveillance']

Post-War Immigration to Britain

* 1945-1968: Large inflows from former Empire:

Indian subcontinent, West Indies, Hong Kong, Africa

* 1948 British Nationality Act gave all citizens of the Commonwealth and Empire British citizenship: most immigrants were full citizens upon arrival

* 1971: 90% of the UK population had been born to parents who were both also born in the UK

The Constitution of Ethnic Minorities

* International immigrants concentrated in specific spatial areas: 50% in London

* ? Of the adult population of London currently born overseas

* By 1991 an increasing proportion of ethnic minority people had been born in the UK

% of Ethnic Groups Born in the UK*

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Population

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Population Change

UK population increases by 408,000

Components of population change, UK, mid-1998 to mid-2008

The population of the United Kingdom was 61,383,000 in mid-2008. This is an increase of 408,000 (0.7 per cent) on mid-2007 and is equivalent to an average increase of over 1,000 people a day.

Population growth has increased over recent decades; this latest increase compares with an average annual growth of 0.5 per cent since 2001; 0.3 per cent per year between 1991 and 2001; and 0.2 per cent between 1981 and 1991.

Increases in births, decreases in deaths and changes in the pattern of international migration into and out of the United Kingdom have all contributed to population change.

The chart shows the contribution of natural change (the difference between births and deaths) and net migration (the difference between long-term migration into and out of the UK) on population growth.

Natural change was the largest contributor to population growth until the year to mid-1999 and more recently in the year to mid-2008. Between these periods, net migration has been the main driver of population change. In the year to mid-2002, net migration accounted for over 70% of the total population change.

From 2002, natural change has increased and in the year to mid-2008 it accounted for over half of total population growth (54%). This was the first time in nearly a decade that natural change was the main contributor to population growth over a 12-month period.

Components of population change, UK, mid-2001 to mid-2008

The table shows that natural change contributed 220,000 to population growth in the year to mid-2008; this is more than a three fold increase from the mid-2002 figure of 62,000. This increase in natural change is mainly attributable to a growth in the number of births although a decrease in the numbers of deaths over this period has also played a part.

The number of births is increasing partly due to rising fertility among UK born women and partly because there are more women of childbearing ages due to inflows of female migrants to the UK.

In comparison, net migration contributed to 186,000 of population growth in the year to mid-2008, an increase of 26% on the mid-2002 figure of 148,000.

Sources:

Office for National Statistics, General Register Office for Scotland, Northern Ireland Statistics & Research Agency.

Notes:

Net migration & other changes include change in the population due to international migration and changes in the number of armed forces (both home and foreign) and their dependents resident in the UK.