Migrants and economies

Migrants and economies

Raj Thackeray and those of his ilk in other states would do well to read a bit about another man who has been in the news this week—Justin Lin Yifu, the new chief economist of the World Bank.

Thirty years ago, Lin defected from Taiwan and swam across the sea to reach China. True, it was an unusual journey. Millions have fled the other way—from Communist police states to the freedom of capitalism. But the fact that the man took such extreme risks to reach his goal, marks him out as someone of extraordinary ability and perseverance. Elsewhere, Intel’s former CEO Andy Grove crawled on all fours over several nights to escape Hungary in 1956.

The stories of these two men lead us to a larger truth that those who are attacking migrants in Mumbai should learn—immigrants tend to take more risks and work harder to succeed in their new world. They are almost desperate to succeed, irrespective of whether they flee poverty or political repression. Naturally, communities that receive them into the fold benefit from this injection of superior human capital.

The two clearest examples of how places that welcome immigrants gain in the long run are the US and Mumbai. Both are entrepreneurial societies. There is a similarity between the immigrants who start tech companies in Silicon Valley and those who sell on Mumbai’s pavements. They have left their comfort zones to strive for a better life. Compare the US and Mumbai with closed societies that have fallen behind in the economic race—Japan and any parochial Indian city, respectively.

Melting pots do tend to boil over. We have seen this happening in both Mumbai and Bangalore. The local population does feel threatened and tries to protect its cultural space. The fear of the other is in no way unique to Mumbai and Bangalore—or India, for that matter. It is up to civil society to ensure that politicians do not stir these fears every now and then.

There should be free movement of goods, services, capital and labour in an open economy. The search for better prices, returns and wages will bring immense benefits to the entire country. That’s what really drives Mumbai’s success. It attracts people and investments that complement its natural advantage as a port. Thrashing Bihari taxi drivers on the city streets is wrong—morally and in terms of economics.(Should there be restrictions on internal migration? Write to us at views@livemint.com)