Factoring Turbulence Out: Diaspora Regulatory Mechanism and Migration Development Bank

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Abstract

The ongoing economic crisis has shifted much of the policy debate to problems of financial sector regulation, productive capacity collapse, among others. However, this leaves unattended the real situation with labour migration, which directly impacts social and economic inner components of being of millions of individual families across the world. The somewhat ad hoc nature of the process poses several policy issues for the home and host economies alike. Immediate concerns relate to streamlining migrants and remittances flows. This involves sensitive aspects of inequality in migrant workers’ labour efforts vis-à-vis domestic workers; migrants’ social and legal status; and less obvious, but still profound, unproductive misallocation of labour resources. Derived from this premise and recognizing the need for an institutional approach, this paper offers alternative policy solutions to temporary labour migration regulation. This research’s original propositions include a Diaspora Regulatory Mechanism and a Migration Development Bank, both operating within a state-managed temporary labour migration regime. Fiscal action, including multilateral agreements, is crucial. The functionality of these mechanisms will directly impact infrastructure, human capital and entrepreneurial projects development in both home and host economies. Discussion is inspired by the analysis of actual circumstances in the economies of the Commonwealth of Independent States, where migration is a social, economic, and increasingly political issue. In the interlinked world, diasporas become dominant actors across all society strata. The development plateau of the post-socialist states offers a rich economic and social soil to conduct responsible policy with future outlook. Moreover, conditions of ongoing economic crisis offer a unique opportunity for daring research to propose and for a motivated decisionmaker to implement original, proactive, and beneficial policy solutions aimed at streamlining the (temporary) labour migration process. This paper contributes to the emerging literature on topics of diaspora, labour migration, and remittance flows.

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