The wall

Never in the history of wall building has a wall had the enviable distinction of shutting down the American Government; and the shutdown is on track to be the longest in American history.
Apparently security concern is the primary reason for the wall, perhaps because the argument to "stop people who have lots of problems and who bring drugs and crime", sells very well with the American masses who over time have become super concerned about terrorism. Another argument for the wall that seems to have taken a back seat for the moment, has to do with low skilled immigrants reducing jobs and workers for Americans.
Immigrants seemingly are becoming a universal problem in modern times. Most recently the Canadian Prime Minister was confronted with the immigration issue with emphasis on Muslim immigrants, "because they want to kill us". And let us not forget the European migrant crisis; while security remains the top concern for Europeans who oppose immigration, economic burden is right there on the list. Unsurprisingly, lower income people are more concerned with immigration because of the risk to them of losing their jobs, or fall in their wages; perhaps validly so.
Trudeau's argument that Canada is a country which was built on immigration carries weight, and going back in history that could easily be said of America as well. However, such arguments are ideological at best, if people believe that immigrants are stealing their jobs, it becomes a "them against us" scenario with no love lost for aliens. For my money, the primary catalyst for xenophobia is unemployment concerns; security concerns just provide a more palatable and compelling argument.
So why do we care whether or not they build the wall or why the West is getting more and more allergic to immigrants? Well beyond a loss of job opportunities for Pakistanis in such countries, the bigger risk is that if the idea catches on, it can have serious implication for Pakistanis working abroad, adversely impacting worker's remittances that have kept the external economy afloat by and large. On the flip side however, we seem to have opened up our borders to immigrants with numerous newspaper reports circulating about the increase in number of Chinese employed in Pakistan since CPEC; probably not a million and hopefully not prisoners as the rumour mongers have been portraying.
Comparative advantage, remember the argument why a football star should not mow his lawn; more knowledge in the air brought about by diversity of thought and ideas; immigrant entrepreneurship resulting in more job opportunities; growth in economy since supply creates its own demand; are the primary arguments in favour of immigration. Albeit selling citizenship for a few hundred thousand dollars to jack up cash flows is a trend which also did take off in modern times.
Conversely, there are those who believe that the increase in inequality and stagnation of wages in the Western world had more to do with the influx of low skilled immigrants than with the 1% stealing from the rest. Technology, innovation and investment opportunities admittedly drive economic growth and create more and more opportunities for technical and skilled labours, albeit perhaps not that much for unskilled labour. However, in an economy struggling to educate its populace and lacking qualitative growth, even skilled labour might struggle with unemployment. In such a scenario, immigrants are more than likely taking jobs which perhaps may have accrued to nationals. Undoubtedly, constrained growth will result in surplus labour and drive wages down, irrespective of immigrants.
Essentially, the situation is the same as in the case of a trade deficit; the only difference is that in the case of imports, foreign unskilled labour gets employed in their own country for our consumption; we are exporting jobs when we import goods and services. Rationally a country which is exporting labour and relying on their remittances to balance the current account should be very weary of exporting jobs or importing labour.
The world is very different today. A few years ago, no one could have imagined that those who for decades had forced the Washington Consensus on the developing world and were behind the formation of the WTO would themselves be raising tariffs and going after free trade. Who could have imagined that the very country which is the sole superpower of the world, arguably, because of its liberal migration policies, will be in a debate to build a wall to stop migrants?
The problem with economic theories is that you never know whether they are right or wrong, until it is too late. Only history will decide, perhaps after a few decades, maybe a century even, whether immigration was good or bad. For my money, the answer perhaps is selected immigration, and in Pakistan's case, definitely limited to highly skilled labour. Notwithstanding, I remain steadfast on my views on external trade, the bullion must come home.
Whether the Americans finally build the wall, or not, has nothing to do with us; on the other hand we do have a few eggs in the immigration basket. Accordingly, there is an urgent need that our government collects reliable data and carries out a comprehensive analysis of employment in Pakistan and the impact of immigrants on local jobs, and takes necessary policy decisions today; or maybe procrastinate now and in future argue about building the wall!
(The writer is a chartered accountant based in Islamabad. Email: [email protected])