Technology in service to improve global security is a tool that let thinking in human free mobility around the World; countries in European Union and other main countries are working hard to achieve this target. INTERPOL is the international agency in charge to guarantee high security standards around the World. Colombians have faced high restriction on free mobility around the World, but things are changing in favor of colombians because of technology improvements. However, Colombia contribution to this target is poor; there is not a clear colombian policy for asking VISAS, there are huge foreigners in Colombia without clear status because lacking of immigration offices around Colombia, and many government paper to fill out; moreover, there are null researches on foreign contribution to Colombia economy. This note gives the starter of quantification of foreigners contribution to Colombia economy.
Author: Humberto Bernal,
Economist,
e-mail: zhumber@gmail.com
Twitter: Humberto_Bernal
International free human movement around the World is taking the attention of politicians around the World, and it is fair because free human mobility around it improves our welfare. Fortunately, we are living in a World where technology lets knowing who is who, and it lets working on getting a better World Society. However, this type of technology has to be dealt carefully to achieve better social status. From my point of view, The International Criminal Police Organization (ICPO, INTERPOL) is the organization in charge of keeping World security in high levels as we deserve. Colombia contributes to reach this achievement giving the welcome to INTERPOL strategies as last week was evidenced in the INTERPOL General Assembly in Cartagena (Colombia). From economic point of view, there is a social myth that free human mobility around the World will bring permanent lower salaries and reduction in society welfare; for instance, one can see social protest agains it, and some politicians without strong economic evidence who point restrictions on free mobility. This note, on the other hand, highlights the benefits that foreigners have given to Colombia society; therefore, it is a call for Colombia government to review her immigration policies in order to give a second step to achieve a free World human mobility; the first step was the welcome to INTERPOL strategies.
Foreigners in Colombia and their status
Foreign immigration in Colombia has increased indeed in the last 8 years, but there are many foreigners who do not have status of residents because of lacking of local information, many official papers to fill out and low government coverture to record them. According to last population Census (2005) and colombian residences given in the last 7 years, there are approximately 147,839 foreigners who were living in Colombia in 2012; however, as the net flow of immigrants (arrivals menus departures) is taking into account, there are approximately 622,708 foreigners living in Colombia in 2012; they are under status of tourist, students, short business visit and temporary work. Figure 1 shows the stock of immigration in Colombia from 1925 to 2012; there has been an important increase of foreigners in Colombia in the last years; most of them come from Venezuela, Ecuador, the United Estates, Asia and Europe respectively. This increase can be explained by fair salaries during 1950-1980; the real wage showed an annual average growth of 18% between this period; moreover, better security conditions that are evidenced by low foreigners kidnapped; there were years between 1995 and 2005 that the number of foreigners kidnapped were dozens; nowadays, there are kidnappings, but they are few per year, and they are released in short time. The bulk of these foreigners live in Bogotá, Medellín, Cali, Pereira, Barranquilla, Cartagena, Cúcuta and cities that face low rates of kidnapping; there are few that live outside of these main cities. Finally, there is an important issue that is taking researchers attention and is the emigration of foreigners from countries that used to be attractive for them; for instance, according to World Bank Data, the number of foreigners residents in Brazil, Argentina and in less volume Paraguay show a decline while foreigners has found more attractive Chile and Colombia although the last country face poor security indicators in some regions still.
Figure 1. Foreign immigration to Colombia 1925 - 2012
(thousand of people, stock of people)
Source: Palgrave International Historical Statistics; Bureau of Statistics Colombia; DAS and Immigration Office Colombia.
The impact of foreigners resident in Colombia
There are huge literature about immigration impact on economies; for instance a good summary was done by Borjas (1995), (1999) and (2008). These researches point that foreigners bring external positives effects on economies, and salaries in local economy can increase because it; it means new foreign skills in production learned by natives let high salaries; however, these researches point also that at the beginning of immigration there is a pressure to reduce salaries, but this effect disappears so quickly because external positive effects take room. Figure 2 shows the foreigners surplus in a economy (green area) under external positive effects; this surplus is the contribution to the economy after foreigners payments; it is from a theoretical point of view, see Borjas (1999).
Figure 2. Foreigners surplus under positive externalities
(Theory perspective)
Vertical axis: real wage,
Horizontal axis: volume of labour,
N: local labour supply,
M: foreign labour supply,
L: total labour supply,
Source: Adapted from Borjas, G (1995) (1999) (2008).
Following Borjas (1999) methodology, the annual foreigners contribution to colombian economy is about 0.005% of Colombia Gross Domestic Product (GDP) between 1925 and 2012; this surplus is without external positive effect. However, as external economies take room, the foreigners contribution increases to achieve about 0.6% of colombian GDP; figure 3 shows the annual foreigners contribution on Colombia economy between 1925 and 2012; for instance, in 2012 the annual foreign per-capita surplus was US$7,818. There were periods when this per-capita surplus was lower; for instance, through decade of 1980 because general salaries showed a low positive rates, and the increase of terrorism in Colombia; the economic crisis of 1999 pushed down this per-capita foreign contribution also; this economic crisis was deep as the 1929 crisis. Therefore, foreigners contribution to Colombia economy is positive; moreover, they bring external positive effects on local productivity, so they deserve more attention from economic and immigration government authorities.
Figure 3. Foreigners surplus in Colombia 1925 - 2012
(per-capita foreign surplus, US$ at 2012 prices)
References
Borjas, G. 1995. “The Economic Benefits from Immigration”, The Journal of Economic Perspectives, Vol. 9, No.2, pp. 3 - 22.
Borjas, G. 1999. “The Economic Analysis of Immigration”, Handbook of Labour Economics, Vol 3, Chp 29. Elservier Science.
Borjas, G. 2008. “ International Immigration”, The New Palgrave Dictionary of Economics, Second Edition.
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