Migration and Development: Implications and Recommendations for Policy

Robert A. Pastor

The conventional wisdom on the relationship between migration and development in the Caribbean Basin can be summarized in two propositions: that migration from the region to the United States is an "escape valve," benefitting the sending countries; and that development reduces the pressures for migration. This article examines both propositions and concludes they are misleading or inaccurate. Emigration costs the sending countries in serious ways and often impedes development. Secondly, development does not stem migration; in the short-term, rapid development is more likely to exacerbate the pressures of migration than to reduce those pressures. Besides analyzing the relationship between migration and development in the Caribbean Basin, this article offers development proposals to reduce pressures leading to migration and enhance the positive effects of migration on development.

he relationship between migration and development is important, but has proven difficult to assess. For that reason, the conventional wisdom has reigned, that emigration from developing countries- especially Mexico and the Caribbean B asin-to the United States has functioned as an essential escape valve, releasing social and political pressures, and thus contributing to political stability in these nations. This view is deeply held in Mexico, and is the reason that former Mexican President Miguel de la Madrid protested the passage of the United States Immigration Reform and Control Act of 1986, which imposed sanctions on United States businessmen who hired undocumented workers. De la Madrid described the law as "a grave

Robert A. Pastor is professor of political science at Emory University and director of the Latin American and Caribbean Program of Emory's Carter Center. His most recent books are Condemned to Repetition: The United States and Nicaragua (PrincetonUniversityPress, 1988) and Limits to Friendship: The United States and Mexico with Jorge Casta/teda (Alfred A. Knopf, 1988). Address for correspondence: The Carter Center of Emory University, One Copenhill,Atlanta GA 30307.
Studies in Comparative International Development, Winter 1989-90, Vol. 24, no. 4, 46-64

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element in the development of Mexico, since this factor [undocumented migration] has functioned as a mechanism of adjustment in relations to unemployment." His successor, Carlos Salinas de Gortari, was more direct in acknowledging that undocumented workers "serve as an escape valve." Another element of the conventional wisdom on the relationship between migration and development was that more development would reduce the pressures for migration. In the course of its debate on a law to discourage illegal migration by imposing penalties on employers who hired them, some in Congress expressed concern that the bill might have adverse effects on these countries, while others argued that the United States should stop dealing with the phenomenon as a police or border issues and start addressing the social and economic roots of the problem of illegal migration. This latter argument appears to have provided the stimulus for establishing the Commission for the Study of International Migration and Cooperative Economic Development, which was mandated by the Immigration Reform and Control Act of 1986. This article addresses the questions implicit in Congress's determination to establish the Commission: what is the relationship between migration and development, and what specifically could be done by the United States in cooperation with the governments of the Caribbean Basin to alleviate the conditions that give rise to unauthorized migration? First, I will define the Caribbean Basin. Then, I will analyze the impact of development on migration followed by a discussion of the varying effects of migration on development in the region. The central questions are: Does development reduce the pressures for migration or exacerbate them? What is the impact of different types of migration --legal, illegal, temporary, political/refugee, and immigration-on the economic development of the region? I will not confine my analysis to the developmental causes and consequences of unauthorized migration partly because of the weakness of the data on illegal migration, but also because there is nothing in the literature to suggest that the economic causes of legal migration will differ significantly from those of illegal migration. "Undocumented workers" do not prefer clandestine to legal migration; they migrate illegally because they are unable or too impatient to secure proper documents. The same economic, political, and social factors that "push-and-pull" legal migrants influence illegal migrants. If a developmental strategy reduces legal migration, it presumably will have a similar effect on unauthorized migration. Finally, I will propose policies for the United States to consider by itself and with governments in the regional that would reduce the pressures for migration, enhance the benefits of migration to sending nations' development, and permit a long-term approach to development that takes migration into account.

Defining the Region

The Caribbean Basin includes all the nations in and around the Caribbean Sea--36 nations and dependencies. This includes Mexico, Central America, the most northern states of South America, and the Caribbean islands. The nations of the region are

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very diverse politically, economically, culturally, and linguistically, but they share many similar problems and opportunities. With several important exceptions, most of the nations are relatively small, open, and vulnerable on the border of the world's richest and most powerful county. All confront a similar strategic dilemma--how to retain autonomy while seeking regional integration, how to elude the dominance of the United States while securing improved access to the United States market. Except for Mexico, Colombia, and Venezuela, the countries possess small markets and scarce resources. Nonetheless, partly because of the proximity of the United States market, the per capita income in the region averages in the middle class of the developing world. The region's principal advantage and disadvantage is the same-its proximity to the United States. The region's principal competitor for its skilled population and product is the United States, not the countries of the Third World. The United States is, therefore, both a solution and a problem, a source of aid and a business rival, an outlet for unskilled labor and a magnet for the region's talent. Though differences in political and economic systems in the region sometimes appear immense, they should not obscure some common structural problems and the need for cooperative, or at least, similar solutions. For example, consider the two "model systems," the Puerto Rican and the Cuban, which are often taken as the polar options available to the region, and examine one critical development problem-high unemployment. Both islands sustained rather steep increases in population in the 1950s and 1960s, which contributed to serious employment problems fifteen years later. Despite the different political orientations of the two governments and the fact that one is United States territory, both essentially relied on the same two solutions to address their employment problem: a vast expansion in government employment and out-migration. The centralization and expansion of the Cuban government and the out-migration of nearly one million Cubans in the last three decades are well-known, as is Puerto Rican out-migration. 2 Less well known is the continuous enlargement of the public sector in Puerto Rico--the supposed bastion of the free enterprise system in the Caribbean--the significance of public policy in promoting the island's development. 3 From 1940 to 1970, public-sector employment in Puerto Rico increased at an annual average of 7.2 percent, as compared to 1 percent for the entire economy and 2.6 percent for the manufacturing sector. By 1979, the Puerto Rican government employed nearly one-fourth of the island's labor force (Comptroller General of the United States 1981). In the last three decades, the Caribbean Basin has become the largest source of legal immigrants to the United States (See Table 1). In the 1950s, the average annual immigration from the Caribbean Basin leaped by almost a factor of four over that of the previous decade. Then, in the 1960s, migration doubled over the previous decade, and in the 1970s, it increased again by 60 percent over the previous decade. Of all the countries in the world, Mexico has been the largest source of immigrants since 1960. Yet the rest of the Caribbean Basin with a population less than half that of Mexico, has contributed more immigrants during that period. This article will focus on the Caribbean Basin rather than all of Latin America for two reasons; both are the consequences of proximity. First, since the 1960s, the

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Caribbean Basin has accounted for over 85 percent of all the legal immigration to the United States from Latin America. Secondly, the region's development and politicalsecurity problems are inextricably intertwined with the United States. All of the nations of the region--with the exceptions of Cuba and Nicaragua--are highly dependent on the United States economically, and their politics are affected by the perception --and frequently the reality--of a pervasive and manipulative United States presence. This distinguishes the region's problems and potential solutions from those of the rest of Latin America. The figures in Table 1 do not include temporary (H-2) workers who come to the United States each year from the region, and they do not include the large numbers of people who have entered or remained in the United States illegally. The Select Commission on Immigration and Refugee Policy estimated that the majority of undocumented workers in the United States--3 to 6 million in 1981--were from Mexico but "an increasing p r o p o r t i o n . . , appear to come from countries other than Mexico--from the Dominican Republic, Jamaica, E1 Salvador, Trinidad and Tobago, Guatemala, Haiti, and C o l o m b i a . . . " The amnesty provisions of the Immigration Reform and Control Act of 1986 provided the first reliable data on the undocumented migration. By December 9, 1988, 3 million previously undocumented people applied under the regular and the special agricultural workers provisions (SAW) of the law. Two and one-fifth million or 75 percent were Mexicans (USINS 1988). Though the population of Central America has tripled since 1950, the impact on migration to the United States until 1979 was modest. Violence and political instability since then provided the impetus for a massive, mostly illegal migration. Only 5,000 Nicaraguans and 14,311 Salavadorans legally immigrated to the United States in 1980 and 1981, but a study by the United States Bureau of the Census estimated that from 165,000 to 200,000 Nicaraguans, 245,000 to 310,000 Salvadorans, and 180,000 to 225,000 Guatemalans have settled in the United States from 1978-86 (Peterson). In fact, Central American immigrants were the fastest growing group in the 1980s in the United States--twice as fast as Mexicans. The human ties binding the United States and the nations of the Caribbean have grown wider and stronger, and the future is unlikely to change this. The effect of this migration stream is naturally larger in the relatively small nations in the region than in the United States with a population of 246 million. The proportion of Caribbean people who have migrated to the United States in the last thirty years as a percent of the current populations in their homelands ranges from nearly 7 percent in Guyana to over 22 percent in Barbados, with a regional average of 10%. Table 2 does not include the migration of Puetro Ricans since they have been United States citizens since 1917. Nor does it include Central Americans, but the Census study estimated that approximately 5-6 percent of the Salvadorans, 2-3 percent of the Guatemalans, and 5-7 percent of Nicaraguans had moved to the United States. Table 2 underscores the importance of the new bond of migration that connects all the nations of the Caribbean Basin. Policies of all kinds--on national security, trade, economic development, manpower, as well as migration--need to take fully into

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TABLE2 Caribbean M i ~ a t i o n ~ ~ e U m t e d S ~ t e s : T ~

R~iprocallmpact
Est. Illegal Higrants to the Population U.S. as g of in the U.S. Home Population 225,000 400,000 9.3 9.4 6.9

Country Cuba Dominican Republic Haiti Commonwealth Caribbean Barbados Guyana Oamaica lrinidad & T o b a g o Total Caribbean

Population 9,771,000 5,762,000 6,000,000

Total lmmigratiop 1950-1983 910,867 318,644 132,610

252,000 795,000 2,225,000 1,176,000 28,329,484

38,183 80,462 288,464 100,305 1,869,535

25,000 250,000 60,000 980,000

25.1 10.1 21.4 13.6 10.0

Source: Robert A. Pastor (ed.), Migration and Development in the Caribbean: The Unexplored Connection. Reprinted by permissionof Westview Press. Copyright 9 1985 by WestviewPress.

account the increasing importance of an emerging region. In brief, immigration in the Caribbean Basin is of growing importance to the entire region and particularly to the United States.

The Impact of Development on Migration

As improvements in health conditions reduce infant mortality and increase the population, as economies expand and diversify, and as communications, transportation, and education offer people access to a more modern world, people move within their countries and abroad. Development means change, and one of the changes, that occurs as a nation develops is migration. In addition to the economic impetus to move, powerful social, cultural, political, and psychological forces have facilitated and increased migration in the Caribbean region. The income gap that separates the wages earned in the United States from those earned in the Caribbean Basin is viewed as a major cause of immigration. As long as people can expect to earn much higher incomes in the United States, with a relatively low expense (and risk) of transit, then people will migrate legally if possible, illegally if necessary. Regardless of the size of investment in the region, the income gap will not be reduced in the foreseeable future. The issue for those concerned with Caribbean Basin economic development, then, is whether projects and strategies can be identified that could contribute to development and slow--not stop--the pace of migration. Concern should be focused at the margins to preclude excessive rates of emigration that can have a negative effect on sending as well as receiving societies. Rapid rates of internal and international migration are costly to families that are divided, to local and national governments that are forced to divert scare resources to respond to the urgent effects of population

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shifts rather than to the long-term needs of society. High emigration rates of professional and skilled workers can reduce the capacity of the government and private sector. Development projects and strategies that accelerate migration, however unintentional, can be identified as can those that could reduce the rate of migration. In a comparative study of four Latin American countries, Sergio Diaz-Briquets concluded that development strategies tilted to a single objective, whether economic growth or the equitable distribution of income, are more likely to increase levels of migration than those that balance these objectives (Diaz-Briquets). "Urban-biased" policies, which maintain low food prices and provide no technical assistance, credit, or fertilizer to farmers, in effect, discourage production of food and favor imports. These strategies are likely to quicken migration. As urban areas grow more congested, and capital-intensive investments create fewer jobs, people are more likely to consider the option of looking for work abroad. Because rapid rates of internal and international migration are costly to society, governments should take migration into account in formulating development strategies and seek strategies that could moderate the migration rate. Such development strategies would emphasize (a) assisting the agricultural sector to feed both local people and tourists; (b) expanding employment; (c) relating manpower policy more directly to a nation's development needs and its demographic profile; and (d) balancing income distribution with diversified economic growth.
Varying Effects of Migration on Development

Trying to measure the costs and benefits of migration to Caribbean Basin development is fraught with difficulties. First, the data are often either unavailable or unreliable. Second, some of the major items in the equation are not easily quantifiable, and even those that can be quantified, such as the cost of educating future emigrants, are subject to markedly different interpretations (if average costs are used, for example, rather than marginal costs). Nevertheless, some approximations are possible. A useful point of departure is to first conceptualize and identify the costs and benefits to sending countries. The purpose of using a cost-benefit analysis is not to compute a net benefit or cost for emigration but rather to understand the differential effects of migration--on communities and nations, and with respect to different types of migration. This, in turn, can permit one to devise ways to enhance the benefits of migration to Caribbean development while reducing the costs. The costs of emigration could include the country's investment in the emigrant's education, health, and welfare; performance and efficiency loss in the public and private sectors as a result of the loss of skilled workers and managers (the "brain drain"); and the overall impact on the dependency ratio (the ratio of those unable to work because they are either too old, too young, physically handicapped, or compelled to look after others, to those who do work). The potential benefits of emigration to the sending country are derived from remittances, acquisition of skills, reduced unemployment, reduced rates of population growth, and increased oppor-

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tunities for trade and investment due to the presence of immigrants with businesses that connect their former and adopted countries. The costs and benefits depend on the rate of migration and the characteristics of the flow. They vary within a nation (at the level of households, communities, and nations) and between nations, according to the direction (immigration v. emigration) and types of migration--permanent or temporary, legal or illegal, or refugee--and to the social, political, and economic structure in the country of origin. Temporary emigration, particularly when part of a structured program such as H-2, and permanent immigration (into the region) appear to benefit the Caribbean countries most (McCoy 1985, Hope 1985). The impact of permanent emigration by skilled or professional workers and return migration is harder to assess because it depends on whether the emigrant can be replaced easily in his work place and whether the productivity of a large number of associated workers is affected. Sometimes the departure of a talented administrator can leave a temporary administrative void. The impact of return migration depends on the reasons for the return and whether the person can readily apply any skills he might have acquired abroad. In the short-term, according to Elizabeth Thomas-Hope, return flows have a "positive effect" on the individual and the family, particularly if capital and goods are remitted (Thomas-Hope 1985). However, she argues that this effect must be assessed in the light of longer-term ties of dependency on life styles, expectations, and consumption patterns, which are reinforced by the circular flow of migrants. Return migration could become "a major potential resource for Caribbean societies," she writes, if governments formulated and implemented polices aimed at utilizing the migrants' skills. Even though the data on illegal migration are unavoidably problematic, Papademetriou discerns several distinct and interesting patterns from his surveys in New York and New Jersey and other surveys (Papademetriou 1985). First, illegal migrants are well-educated by the standards of their country of origin; they stay in the United States for extended periods; and their earning levels are often comparable and sometimes higher than those of legal permanent residents who have been in the United States for comparable periods (Papademetriou 1985, 214--217, 266). Papademetriou's surveys find surprisingly little difference in characteristics between permanent legal residents and those here illegally. The key difference, he writes, is not between legal and illegal migrants but between those of different countries. For example, Caribbean migrants--whether legal or illegal--tend to be better educated, earn higher incomes, and send home much higher levels of remittances, as compared to legal and illegal Mexican migrants. Remittances are generally spent to maintain or improve the family's standard of living (consumer goods) or to improve housing. Except for the H-2 program, which requires workers to send some wages home, Caribbean governments (except, of course, Cuba) do not touch the foreign exchange, nor, with one recent exception (Jamaica), have governments considered developing mechanisms that could encourage the use of remittances for investment purposes. However, remaining families also bear significant, though less tangible costs as a result of emigration. The rate of

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dependency (the ratio of those unable to work to those who do) is generally increased by emigration. Remittances, in short, may be a deceptive "benefit" of migration when the family's principal wage-earner is supporting his dependent family from abroad rather than at home. Moreover, the benefits of remittances are often marginal as compared to the loss of managerial skills (Marshall 1985).
From Ambivalence to Consensus: A Basis for Policy

Two conclusions emerge from this analysis: both migration and development are increasingly important to the region, and the relationship between the two is complex but comprehensible and subject to some degree of policy manipulation. Before recommending migration-and-development policies, one should first address two questions: what is lost by failing to relate migration to development, and conversely, what could be gained by policies that relate migration to development? It is easier to point to development failures that have an out-migration component than to suggest that an awareness of the relationship of migration to development could have prevented that failure. For example, Jamaican Prime Minister Michael Manley followed a development model in the 1970s that purportedly was intended to enhance self-reliance and reduce dependency, but the rhetoric he used to mobilize support for his program and perhaps also some of his policies actually accelerated the rate of professional emigration, with serious adverse economic consequences. To the extent that the reduction in skilled personnel reduced Jamaica's development prospects, emigration can be considered one of the causes (and one of the consequences) of the development failure. Whether a more complete understanding of the ramifications of migration and the costs to development might have modified the strategy is speculative, but conceivable. Another example is afforded by the development plans formulated by the microstates of the Eastern Caribbean. Failure to take into account the propensity for emigration sometimes makes the difference between the success or failure of a particular development project. A third example is the Caribbean Basin Initiative (CBI), which paid more attention to trying to create jobs than to who might fill them or what impact "enclave" manufacturing might have on migration and the rest of the economy (Pastor 1982). Emigration from the Caribbean Basin has increased since the inception of the CBI in 1983, although the CBI promised the opposite. These development failures have multiple causes, but among them is the conceptual failure to understand the relationship between migration and development.
Policy Recommendations

The issue is how to alleviate the effects of migration on the region's development and alter development strategies so as to reduce the pressures of migration. The first step is for the United States and other governments in the region to upgrade their capabilities for gathering data on immigration and establish policy analysis units to review the data and their implications. Also, foreign aid agencies and international development banks should consider evaluating existing aid programs to ascertain

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their impact on migration. Integrated planning by international donors as well as national governments could view population and labor migration as integral components of economic development. The governments of the Caribbean Basin should also consider policies on: (1) Caribbean emigration and immigration policies; (2) development strategies; (3) international arrangements for migration and development; and finally, (4) a single comprehensive strategy that would not only integrate the two sides of the migration and development problem but would also take into account the great differences between the various nations within the region while promoting regional cooperation and development. (1) Emigration and Immigration Policies Historically, Barbados and several other Caribbean islands promoted emigration of their citizens, but today most countries have no policies whatsoever on emigration and highly restrictive policies to deter immigration (into their nations). Although aware that emigration can often be costly to Caribbean development, Courtney Blackman, the former governor of Barbados' Central Bank, argues that policies aimed at containing capital and restricting labor within national boundaries have the opposite effect since they are perceived as threatening basic freedoms and the middle class (Blackman 1985). Instead, Blackman recommends that the migrationand-development policy, which is most likely to succeed in the long term, is one that is least restrictive and most liberal in the classical sense of the term. A similar point about the structural vulnerability of the open Caribbean sociocultural area is made in different ways by Maingot, Anderson, Henry, and Brown-four Caribbean representatives of very diverse perspectives. 4 Henry's analysis is in many respects the most compelling. He finds that the countries that tried most vigorously to cut the cord of dependency-notably Jamaica, Guyana, and Cubafound themselves even more dependent than before or than their neighbors. In the long run, the more cautious, laissez-faire governments in the region became less dependent. Blackman pursues the logic of this argument the furthest. He recommends a Caribbean-wide agreement to remove all restrictions on the movement of people, and, "to facilitate this, exchange control restrictions on the transfer of funds within the region and on non-resident borrowing" should also be ended. In other words, although recognizing the costs of the brain drain and capital flight, he argues that the best way to shut those valves is to open them all the way. This is a bold prescription, but dangerous and unlikely to be adopted by any government, least of all a small nation that is vulnerable to external forces over which it may have little or no control. This laissez-faire approach follows the logic of economic theory, but not even eighteenth century English liberals would have taken the theory as far in practice as Blackman proposes. Trevor Hope's analysis of the historical impact of immigration on Caribbean development leads him to the conclusion that Caribbean governments should encourage immigration, but if that is improbable, at least, they should not preclude or

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unduly restrict immigration. Arthur Brown, however, notes that Caribbean common Market (CARICOM) leaders have not even agreed to permit the free movement of workers within CARICOM, let alone from outside the region (Brown 1985). Changing these laws would not be easy, but there is some indication that several Caribbean governments are considering relaxing immigration restrictions to entice Hong Kong businessmen to invest and immigrate to the Caribbean (MacLean 1985).

(2) Development Strategies

As we have noted, development strategies that balance economic growth with the redistribution of wealth are more likely to reduce the pressures of migration in the region than those that are weighted in favor of a single objective. Similarly, a political development model that is open, inclusive, and accommodating is more likely than an authoritarian, exclusive model to reduce migration pressures in the long-term. In the short term, however, the effect could be the opposite: a totalitarian government could exercise much tighter control on population movement than a more liberal government, and it could also direct the energies of its people toward a single development goal better than a more open regime. But the long-term effect on migration is evident at the moment when the regime relaxes its control, as occurred in Cuba in 1979. Regional integration through a common market is an important avenue for small nations with limited markets. But even if the common market were to truly remove all trade barriers, the Caribbean would still be too small for an import-substitution strategy to be effective. The best prospects for expanding employment are through trade, aid, and foreign investment and promoting linkages within the economies. The Caribbean Basin Initiative was generally a positive approach, except that it side-stepped the issue of how to enhance rather than supplant local initiative. This probably will require redesigning local training programs and may also require that foreign investors collaborate more with local entrepreneurs. Since the decline of agriculture drains scarce foreign exchange and stimulates migration, increased emphasis on the agricultural sector is essential. Modemization of agriculture could increase and diversify production to serve domestic markets and also tourists. Linkages between local agriculture and tourism ought to be promoted to save foreign exchange, expand employment opportunities in the rural and urban areas, and thereby slow migration (Miller 1985). Traditional crops like sugar pose difficult problems both for the countries in the region and the United States. Since the 1930s, the United States has protected its sugar producers by permitting sugar imports to flU only half the domestic market. In the last decade, a corn fructose substitute has captured one-third of the United States market while the international price has collapsed. United States sugar growers clamored for protection, and they received it. The Caribbean assumed a disproportionate share of the burden of adjustment. Quotas for sugar from the region were

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reduced to their lowest level in a century. In 1988, the quotas were a mere 10 percent of what they were in 1981 (Times of the Americas 1988; Lopez). This had a chilling effect on several countries that were dependent on foreign exchange from sugar and already had debt problems. The question is, What should the United States do? To return to an earlier era of more liberal quotas or to demolish the quotas entirely is unrealistic. The first step is conceptual: to view the region as composed of small, vulnerable economies where failure or breakdown would have serious political consequences for the United States. If this approach is accepted, then a different set of policies becomes possible. The United States should then consider expanding its domestic commodity programs to incorporate some portion of Caribbean crops. A human resource strategy similar to the Asian model but adapted to the region was proposed by Ralph Henry and Kim Johnson (Henry and Johnson 1985). The manpower strategy has five components: (1) cooperative research projects with industrialized countries on advanced technology, such as biogenetics; (2) altered terms of trade that would permit small Caribbean countries to invest in "knowledgeintensive" exports; (3) scholarship programs in science and technology that require students to return home; (4) flexible manpower and educational planning programs; and (5) encouragement of return migration of skilled managers. The greatest emphasis needs to be placed on creating jobs, though employment creation will not yield quick results. Nonetheless, in the opinion of Hakim and Weintraub, "it may be the only economic intervention that could reduce migration over the long term" (Hakim and Weintraub 1985). They also recommended a five-pronged strategy that includes emphasis on the following: (1) agriculture, primarily for the purpose of creating productive jobs; (2) industrial development, which removes disincentives to invest in labor; (3) export promotion; (4) family planning and manpower programs; and (5) tourism promotion. Aid, they believe, can be more effective than trade to promote development, reduce migration pressures and expand employment. This adds up to a balanced development strategy with a slight emphasis on employment creation in order to alleviate the migration problem.

(3) Relating Migration and Development

The three major migration-related development problems faced by most Caribbean Basin governments are (a) unemployment; (b) scarcity of managerial and professional talent; and (c) inadequate investment in both private and public sectors. The issue is whether the skills and energy of the enterprising immigrant might be used in some manner to promote the home country's development. Projects to harness migration for development have been tried in southeastern Europe, the Middle East, and Asia. The few successful ones were expensive and involved cooperation between sending and receiving countries. 5 One of the purposes of these projects is to attract returning migrants. The successful projects provided jobs and other benefits along with transportation and expenses for educating the returning immigrant's children. The most successful

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employment-creation schemes involved some spontaneous interest on the part of migrants, some support from sending countries, and some aid from receiving nations. Learning from the lessons of both success and failure, Rosemarie Rogers and I developed several specific proposals to encourage the selective return of some highly skilled immigrants, particularly new university graduates, and to use more effectively the capital accumulated by some immigrants. First, we propose national and regional remittance banks to provide incentives for migrants (and their families) to invest their remittances in their home countries. A few home governments have tried to attract remittances before, but they have largely failed because immigrants have feared their investments would be jeopardized by a change in government or political instability. To be successful, therefore, remittance banks would have to be insulated from political change and supervised by competent organizations. The World Bank (or regional banks like the Inter-American Development or the Caribbean Development banks) could assist and monitor the remittance banks. Alternatively, that task could be performed by the Inter-American Foundation or the Pan American Development Foundation. The remittance banks could transfer an agreed-upon proportion of the emigrant's remittances to his family directly and channel the rest to the fund. These remittances could in turn be used as government counterpart funding for international development projects. In effect, governments could use remittances to increase foreign aid (sometimes impeded by a lack of counterpart funding) and use foreign aid as an incentive to migrants to increase their remittances because the aid would, in effect, constitute matching grants for the remittances. The banks would provide emigrants with a financial stake in local enterprises and perhaps job opportunities for them or their families. 6 The incentive for emigrants to use such banks would be that 1. their remittanceswould not be lost, as now sometimesoccurs; 2. the banks would guaranteethat the emigrants' familieswould receive whatever portion of their remittancesthey chose to send them; 3. the emigrants' investmentswould be augmentedby loans or grants from the multilateral developmentbanks (MDB's) and monitoredby the MDB's; 4. the emigrants would contribute to their country's development;and 5. they would receive priority in obtaining employmentin these projects in the future. The benefits to the home countries would be that
1. they would receive some foreign exchange that previously had gone straight for consumption of individual households; 2. they would expedite loans from the international development banks; 3. they would expand the private sectors; and 4. they might encourage the return of some emigrants.

The "brain drain" has meant that the nations that most need talent and managerial expertise often have the least. The pertinent issue is how to encourage Caribbean Basin experts, who currently reside abroad, to apply their talents in their home

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countries. Separate manpower pools--containing lists of experts--could be organized and funded respectively by the MDB's, bilateral aid agencies, private investors and merchants, and the Intergovernmental Committee on Migration. A significant constraint on making loans to the region is the lack of managers. If funds could be used to recruit Caribbean emigrants, then the international development banks could address simultaneously two problems--the need for investment and skilled manpower. Jamaican Prime Minister Edward Seaga proposed the establishment of an international fund for manpower resources to be supported by the United Nations Development Programme, and to help nations like Jamaica to compensate for the "brain drain."7 The proposal was not implemented. A less expensive and more effective way to address the problem of the brain drain would be for all the Caribbean nations to permit free immigration of skilled and professional workers. Third, Caribbean Basin governments would make better use of their scarce resources if they facilitated the return of young graduates to their countries. There are estimates that one-third of all foreign students in the United States remain when they complete their studies (Miller 1985). The United States should cooperate with Caribbean Basin governments by strict enforcement of visa requirements to encourage the return of these students.

(4) The Need for a Broader StrategF: A Caribbean Basin Compact

There is, in brief, considerable scope for governments and international organizations to manage the issues of migration and development more effectively. However, the recommendations in this article can have an enduring impact on the region's development only if they are placed in the context of a broader strategy and program. That requires, first, an understanding of the region's special development dilemma; second, a strategy that recognizes and builds on the two subregional organizations-- CARICOM and the Central American Common Market--and on the unique relationship between Mexico and the United States; and third, a formula for relating the parts to the whole. Whether the development dilemma is described as "dependency," "underdevelopment," or by another term, it is clear that the nations of the region share similar problems: they are relatively small in size and population as compared to the United States, and some are very small; they have limited resources; they rely on trade, aid, and foreign investment for a large proportion of their gross domestic product; and they are close to the United States, a highly unequal competitor. Together these characteristics mean that major forces shaping their nations' destinies originate abroad, whether they are the fluctuating international prices of sugar and oil, interest rates charged by U.S. banks, hurricanes, marines, or guerrillas. For nations as open and vulnerable as those of the Caribbean Basin, sustained development can occur only if they devise means to cushion the impact of these external shocks. Both internal and international policies are available to exploit the comparative advantage of the region while reducing its vulnerability. A crucial instrument for

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achieving both objectives is diversification. The more numerous and different a country's exports are, the less vulnerable it is to the shifting price of one. The more markets a country has, the more opportunities it has to expand production. Second, in addition to expanding and altering the number of products they export, nations can take steps to compensate or moderate the effects of the free market. It is true that international commodity agreements, such as those for coffee, sugar, or tin, have not worked well for reasons having to do with the difficulty of organizing collective action (Olson 1965). But if the costs of adjusting to the extreme fluctuations in price exceed the benefits of distribution in the free market for both exporting and importing countries, then logic would demand another look at international commodity or long-term supply agreements. Two commodities need to be singled out because the pricing of both--sugar and oil -- has had an extraordinary detrimental impact on the entire region. The collapse of the sugar market in the last two decades has devastated many of the small economies in the region, particularly the Caribbean. Some have been able to rely on tourism to compensate for the foreign exchange shortfall, and most have begun to shift their investments to other areas. Nonetheless, many countries remain very dependent on sugar, and instead of protecting the U.S. market and ignoring the consequences of increasing U.S. protectionism, the United States should begin to explore other ways to address the sugar problem. A three-year contract at a certain fixed level is one way. Washington could also phase down it subsidies and permit the Caribbean sugar exporters to take advantage of the increased competition. Other options for dealing with the sugar sector need to be considered. The wild fluctuations in the price of oil from the early 1970s to the late 1980s have alternately harmed the oil-consuming and then oil-exporting nations in the region. The Caribbean Basin and Canada have sufficient energy resources to be selfsufficient and to insulate each other from the travails of international price fluctuations. The entire region should negotiate a five-year energy agreement that would provide for the region's needs at a negotiated price. This would not only lend stability to oil prices, but it would permit the contracting countries and their businesses to make future plans with greater reliability. Any reasonable accounting of the dislocations of the 1970s and 1980s should lead to the conclusion that both consumers and producers would have been much better off in the long run if neither side had benefited too much in the short run. Third, nations can expand their markets through regional integration or special trade preference schemes (e.g., the Lome agreement or the Caribbean Basin Initiative). Fourth, nations can upgrade their human resources through improvements in education or training, or by special human resource strategies. Finally, governments can stimulate local production to substitute for current imports; this strategy would be especially appropriate for food. All these steps, plus others recommended earlier, would reduce the degree to which nations in the region would be objects of international manipulation. The United States shares with the Caribbean Basin an interest in economic development for the simple reason that it also shares with the region the consequences of underdevelopment and instability. Moreover, as the region reduces its depen-

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dency, it becomes a more reliable and important trading partner. Therefore, a bilateral framework for cooperation that reinforces the one-sided, dependent relationship and discourages regional cooperation does not serve the interests of either side. In advising against bilateral aid in the mid-1960s, former Senator J. William Fulbright stated the issue most clearly: "The crucial difference between bilateral and international aid is the basic incompatibility of bilateralism with individual and national dignity. Charity corrodes both the rich and the poor, breeding an exaggerated sense of authority on the part of the donor and a destructive loss of self-esteem on the part of the recipient" (Fulbright 1966). Although the Caribbean Basin Initiative contributes to the region's development by expanding its markets, the CBI's framework is essentially bilateral, requiring separate agreements between the United States and each Basin nation. As an alternative, I propose a Caribbean Basin Compact, a cooperative program involving all the nations of the region and other nations and international organizations interested in contributing to the region's development. The basis for this compact is the recognition of the (asymmetrical) interdependence of the nations of the region and the interconnectedness of the various problems they face, particularly those of migration and development. The Compact needs to recognize and build on the subregions. Central America and the Caribbean each have a Common Market, which have been effective in the past. An evaluation in 1980 of ten regional economic integration schemes in the developing world concluded that these two were the only ones which "have been unambiguously effective in integrating export-import markets (U.S. Department of State 1980)." For different reasons, both schemes have languished since the late 1970s. The Compact should, first of all, seek to energize both schemes by providing aid and other incentives for the nations within each group to reinvigorate their efforts.8 Mexico needs also to be considered separately by the United States. With the exception of the Soviet Union for strategic reasons and Japan for financial ones, no nation in the world has as much of an impact on the United States as Mexico. Mexico is the largest source of legal and illegal migration and, beginning in 1980, became the third-largest trading partner to the United States and the largest source of energy imports. If Mexico fails to develop, or if there is instability in Mexico, the United States will also face the consequences almost immediately. It is therefore in the interests of the United States to promote the development of Mexico. There are many ways for the United States to assist in Mexico's development. Debt relief is a first step. The United States has assumed the leadership in assembling several packages in 1976, 1982, 1986-87, 1989 to reorganize and reschedule Mexico's debt, but it has not yet significantly reduced the size of the debt or the service payments. Many proposals are available for doing this; the issue is political will and vision, both of which have been lacking. 9 A second critical area is trade. To service the debt and provide jobs, Mexico needs to develop its non-oil export capacity. Mexico adopted two positive policies for that purpose: it stopped trying to maintain an over-valued exchange rate, and it took steps to open its own market and thus increase internal competition. Now it is essential for its largest customer--the United States--to permit greater access for Mexico's prod-

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ucts. The United States could do this by sectoral agreements on textiles and steel on which voluntary export restraint agreements already exist. The United States could accept an additional 8 percent or more of Mexican products each year above the level established in the restraint agreement. This would mean a reduction in imports from other sources, but it would reflect the special importance of Mexico's development to the United States. Other trading arrangements should also be explored, to Despite these specific agreements that should be negotiated by both the United States and Mexico, I believe that it would be in the interests of both countries to fold their arrangement into the broader compact. The relationship is among the most difficult and convoluted in the world, and both sides would benefit from dealing with each other in a wider framework rather than straight across the table. Mexico would also be able to reduce its dependence--a deeply felt concern-- on the United States if it increased its trade with the rest of the region and worked with other nations to forge an economic relationship for the entire region. The Caribbean Group for Cooperation in Economic Development, established in 1978 at the initiative of President Jimmy Carter and under the auspices of the World Bank, could be the vehicle for drafting the terms of such a compact. The group is composed of more than thirty nations and fifteen international organizations and meets annually to review development plans and reports for each Caribbean nation, to encourage an increase in the resources to be loaned for development, and to review regional projects. Between mid-1978 and early 1985, the group provided and coordinated $8 billion in aid to the region. 1~ But, in practice, the degree of coordination and planning was reduced sharply in the 1980s as the United States shifted its strategy from this multilateral forum to bilateral approaches. The governments associated with the Caribbean group could request that the staff of the World Bank undertake a regional development plan for the entire Caribbean Basin, including the United States. The staff could draft a manpower policy for the ~egion that takes into account the comparative advantage of different nations in the region, and includes a coordinated approach to migration and production-sharing. The United States might offer additional investment resources if the region were to use the resources for employment expansion, population programs, and invigorated agricultural policies. Within the context of such a region-wide plan, the international development banks could try to identify the geographical and functional areas with the greatest potential for future employment. A regional plan on migration could include immigration policies for some of the smaller Caribbean nations. Encouraging immigrants might be a better investment than contracting with expatriates. In the context of such a plan, the United States might join with other governments to assist them to recover--perhaps through dual national taxation-some of the education costs invested in emigrants. Future annual meetings could serve as opportunities for the United States to explain its economic policy, for other finance ministers to sensitize the United States to the potential impact of proposed United States policies on the region, and for all to contemplate modifications of policies to mitigate adverse effects and expand cooperative approaches.

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In short, the compact would be both a development plan and a process of continuing consultation. It would not deny the sovereignty of the small nations of the region; on the contrary, it would offer them new opportunities to develop, while at the same time, permitting them to reduce their vulnerability. For the United States, it would offer a constructive plan to promote development and stability on its "third border" while at the same time demonstrating to the world its desire to forge uniquely balanced and respectful relationships with the relatively smaller nations in the region. Immigration has become an additional reason for the United States to pay attention to the region and to assist in its development. To the extent that the region grows and changes peacefully, that reduces the prospects of hostile regimes seizing power. But the United States should not have any illusions that the region's development will necessarily preclude or even reduce immigration. It probably will not. Even if the income gap between the United States and the nations in the region were closed--a virtual impossibility in the next thirty years--immigrants will still come to the United States, as many as it accepts. People will still be pulled by family and by the size, diversity, and excitement of a large and dynamic power. In the end, any long-term U.S. effort to alleviate the causes of immigration should lead it to promote essentially the same kind of moderate development strategy that it would because of its strategic, economic, and other humanitarian interests. The cynical might interpret this as a wasted exercise; others might see it as simply one more powerful reason for working with the nations of the Caribbean Basin to promote peaceful democratic change and economic development. Notes
I would like to acknowledge with gratitude the support of the Congressional Commission for the Study of International Migration and Cooperative Economic Development and particularly the advice and comments of its research director, Sergio Diaz-Briquets. This article draws heavily from a research project I directed and that culminated in a book that I edited. Entitled Migration and Development in the Caribbean: The Unexplored Connection, the book was published by Westview Press in 1985, and major parts of this article are summarized and adapted from it. 1. De la Madrid's comment is cited by larry Rohter in "New U.S. Immigration Law Is Taking Its Toll in Mexico," New York Times, April 21, 1987. Salinas's statement is in a speech that he gave in Coahuila, February 9, 1988 (p. 15), published in a pamphlet entitled Challenges. 2. See, for example, Barry B. Levine, "The Puerto Rican Exodus: Development of the Puerto Rican Circuit," and Robert L. Bach, "The Cuban Exodus: Political and Economic Motivations," in Barry B. Levine, The Caribbean Exodus (New York: Praeger, 1987) 3. For an analysis of the importance of government policy--both Puerto Rican and the U.S. government --in stimulating the island's development, see Jorge Heine, ed., Time for Decision: The United States and Puerto Rico (Lanham, MD: The North-South Publishing Company, 1983). 4. Chapters in Pastor, Migration. 5. For an analysis of these programs and the elaboration of new proposals described in this section, see Robert A. Pastor and Rosemarie Rogers, "Using Migration to Enhance Economic Development in the Caribbean: Three Sets of Proposals," in Pastor, Migration. 6. For more detail on how these banks would work, see preceding note, pp. 334-36. 7. Address to Rt. Hon. Edward Seaga to the Governing Council of the U.N. Development Programme, Geneva, 12 June 1984. 8. For a proposal on invigorating the Central American Common Market both economically and politically, see Robert A. Pastor, Condemned to Repetition: The United States and Nicaragua (Princeton University Press, 1987), pp. 292-96. 9. For a description and analysis of many such proposals, see Robert Pastor, "Planning for the Future," Chapter 15 of Pastor, ed., Latin America's Debt Crisis: Adjusting to the Past or Planningfor the Future? (Boulder, CO: Lynne Riermer Publishers, 1987), pp. 139-150. For an update of several debt relief proposals, see my "Securing a Democratic Hemisphere," Foreign Policy 73 (Winter 1978-79), pp. 51-53.

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10. For an elaboration of these ideas, see Robert A. Pastor and Jorge G. Castafieda, Limits to Friendship: The United States and Mexico (New York: Alfred A. Knopf, 1988), Chapters 5, 9. 11. Telecon with Nicholas Carter, World Bank, March 5, 1985.

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