Migration and Development The Moroccan Case Essay Example

the most favorable conditions for them is crucial. It is also necessary to explore ways to enhance the impact of remittances in Morocco. Therefore, the objective of this paper is to answer the question: Under what conditions can we expect remittances to benefit Morocco's economic development? To achieve this objective, the paper will first examine the relationship between remittances and development in general and provide a brief overview of Moroccan emigration history. Subsequently, it will present and describe remittance patterns in Morocco and discuss the relevance of the new economics of labor migration approach and its impact on labor migration from Morocco according to NELM theory. The paper will focus on factors that contribute to Morocco's development while highlighting the positive role of remittals in its economy, while acknowledging progress needed in other countries.Labor migration is motivated by socio-economic development and global inequality rather than just poverty, according to the World Bank. Despite being classified as lower middle-income, Morocco does not fall into the category of least developed nations due to these factors. However, challenges like high unemployment, widespread poverty, and high illiteracy rates still persist in Morocco. Many individuals who live abroad send remittals to their families for various purposes such as food, housing, healthcare, education, investment, and ceremonies. These remittals have a positive impact on migrant families' development and contribute to reducing poverty (Castles & Miller 2009: 60-61). In 2010 alone, remittals sent to less developed countries increased by 6 percent reaching $325 billion according to the World Bank. Remittals accounted for 1.9 percent of GDP in all developing countries in 2009 but were more significant at 5.4 percent of GDP for low-income

countries (World Bank, 2010). According to Castles and Miller (2009:59), remittals play a significant role in less developed nations economically. One reason for their significance is that they provide a stable source of foreign exchange that is less susceptible to economic cycles (Rahta 2003:160). Additionally, remittals are seen as a response to failed development strategies (Kapur, 2004:7). Through remittals, individuals can migrate and send money back home which benefits not only their households but also the region and country as a whole.
Since the 1960s and 1970s, Morocco has been a common source of out-migration, primarily for low-skilled labor in the European Union. About 10% of Morocco's population resides outside of the country, with most living in Europe and one-third in France. The demand for Moroccan "guest workers" led to agreements between Morocco and several northwest European countries such as France, the Netherlands, and Germany. These agreements were initially temporary but many Moroccans ended up settling permanently. However, a decrease in demand for low-skilled foreign workers caused northern European governments to stop labor recruitment. To address this issue, return migration policies were implemented by European authorities; however, these policies actually resulted in an increase in permanent settlement and family migration during the 1980s. The presence of extensive networks among Moroccan migrants encouraged their families and friends to join them, often through illegal border crossings.Consequently, the trend of Moroccan immigrants settling permanently in European countries has led to the formation of new cultural minorities (Castles & Miller 2009: 67). It is worth noting that not only did European countries benefit from the guest worker program, but the Moroccan government also encouraged migration with the hope that migrants

would invest their earnings in Moroccan ventures for economic growth (De Haas 2005a:2). However, emigration is still prevalent in Morocco today. In the 1970s, family reunions resulted in a surge of second-generation Moroccans forming families with partners from their parents' home country. Despite strict migration policies in Europe, undocumented migrants were able to enter illegally with help from migrated family and friends (De Haas 2005a:2). Migration from Morocco to Spain and Italy has significantly increased since the 1990s, whether legally or illegally (Ibid.2005a:3). Even though they reside in foreign countries, Moroccan emigrants continue to have a significant impact on the Moroccan economy. Over the past decade, the Moroccan government has made various changes to its migration policies. Initially, it was expected that Moroccan emigrants would invest in local enterprises; however, many opted to settle permanently in European countries instead. As a response, the government decided to promote remittances as a means of addressing trade deficits and encouraging national macro-economic development (De Haas 2007:16).According to Hein de Haas (Ibid.2007:16), the policy has been successful, as evidenced by the increasing inflow of remittances into Morocco shown in Figure 1. Remittances have become a significant source of foreign exchange for Morocco since 1990, surpassing both tourism and phosphate sales (Dessouki & Korany 2009:337). A study conducted in 2004 found that without migrant contributions, the poverty rate among Moroccans would be higher (Khachani 2009,1617). Remittance flows peak during vacation season and religious holidays, leading to fluctuations throughout the year (Gallina 2006:16). The Moroccan government hopes that remittances will contribute to overall development. However, it is important to consider conditions and policies that can enhance their impact on Moroccan development.

One interesting aspect is the increasing influx of remittances, currently accounting for 6.6% of GDP (Gallina, 2006:16). This paper explores the influence of remittances on Morocco's economic development through "The new economics of labour migration" theory (Taylor, 1999:64), which suggests that factors driving migration shape outcomes including international migration and remittances.According to the NELM theory, the decision to migrate is not made by individuals alone but rather collectively by households, families, or communities. This decision involves determining whether one member should migrate. The motivation for out-migration goes beyond seeking higher rewards and includes diversifying income sources, sharing income risk, and providing resources for existing activities (Castles & Miller 2009:24).

Migration serves as a means for families to overcome market failures that limit local production, such as lack of credit and insurance markets, according to Taylor (1999:74). Consequently, family farms are forced to finance their own production and insure against income risk. This motive plays a significant role in determining remittances related to emigration.

Based on the NELM theory, Taylor (1999:77-78) draws three main conclusions about the indirect effects of migration and remittances on a microeconomic level in sending areas. One conclusion is that migrant remittances have the potential to create income and employment multipliers in villages and towns from where migrants originate. However, these income multipliers tend to be smaller in small towns that have close connections with outside markets. The impacts of remittances on local economic systems then spread throughout the country through trade.

The positive effects of remittances on incomes in sending countries depend on how local production activities respond to increased supply.Figure 2 shows the Model of Remittances Use and Development Impact, which supports Taylor's

findings on how remittances affect local economic development. When migrants use their remittances to buy goods in their own country, it benefits both their families and contributes to overall regional growth by increasing production and job opportunities (Gallina 2006: 6). Migration requires a certain level of socio-economic development for families or communities to migrate due to financial reasons. This means that migration selectively affects sending communities, with the poorest citizens or states not benefiting from migration and remittances, which leads to increased income inequalities. Although there may be inequality in the immediate impacts of migration and remittances, more families can access migrant labor markets over time through migration networks (Taylor 1999: 79). According to Ibid. (1999: 80), migration and remittances can create a self-perpetuating process. While the direct impact may contribute to inequality, positive indirect effects are also possible. For example, an empirical study conducted by Hein de Haas (2006: 577) in Morocco supports this idea by finding a positive relationship between international migration and economic development in southern Morocco.The study reveals that remittances assist in enhancing living conditions for migrant families and overcoming local market and institutional limitations, indirectly benefiting the regional economy. It is important to acknowledge that non-migrant families would be worse off without international migration; however, De Haas suggests that this does not lead to a decrease in out-migration within the region. As mentioned earlier, migrants require social and economic development before they can migrate. This observation is evident in southern Morocco where increased migration has been associated with development (De Haas, 2006). Hence, it is clear that development in South Morocco does not automatically result in fewer emigrants.

On a microeconomic

level, international migration and remittances have a positive impact. Not only do receiving families benefit from this but there are also broader effects. However, this aspect alone does not paint the complete picture. The progress of a region or country necessitates more than just migration and remittances. Factors such as sluggish economic growth, uncertain political conditions, excessive bureaucracy, and corruption complicate administrative processes in Morocco like obtaining business licenses or rights to land and properties (De Haas, 2006: 578). These factors create uncertainty for migrants regarding whether they should return home or invest in their home country. Enhancing these conditions would unlock significant potential for development.

Conditions for Development in Morocco and the Impact of Remittances

Remittals can contribute to a country's or region's development when favorable conditions exist. The positive effects of remittals depend on specific economic, political, and social circumstances in both the sending and receiving countries. It is therefore important to consider these conditions when assessing how remittals can contribute to Morocco's development.

The impact of remittances on a country's development depends on various factors. Policies implemented by both the sending and receiving countries play a significant role in determining whether remittances have a positive or negative effect. To ensure that remittances contribute positively to economic development, several conditions must be met. These include having favorable fiscal policies, migration policies, and supportive policies in place.

By evaluating these conditions within Morocco, we can identify the circumstances under which remittances can benefit the country's economic progress. When it comes to fiscal policies, one way to increase the amount of money sent through formal financial systems is by reducing transaction costs for migrant workers who send remittances back

home. Minimizing transaction costs allows migrants to have more funds available for remitting.Improving banking sector technology can have additional benefits in reducing transaction costs, eliminating exchange losses, expediting check clearance processes, and improving transparency. By considering these conditions, a comprehensive understanding of how remittals can positively impact Morocco's economic development is gained, while also identifying areas where improvements may be necessary. The significance of rural areas in developing countries when it comes to remittances is another important aspect. Governments can enhance this importance by refraining from taxing these transactions. Attractive financial policies, such as allowing migrants to open foreign bank accounts, encourage the use of formal channels for money transfers instead of informal ones. The migration policies of both sending and receiving countries play a crucial role in benefiting the country of origin and banks through increased tax revenues and fees for fund transfers and banking services. Baghwatti (2003: 101) suggests that developing countries could benefit from the Diaspora model by allowing migrants to migrate with dual passports, enabling them to maintain their assets in their home country while granting them voting rights. This approach, coupled with taxation on citizens living abroad, helps governments manage worker out-migration while also increasing the likelihood of remittances and facilitating development-contributing networks (Ratha 2003:169).

Migration policies

Both migrant sending states and receiving countries have important roles in migration policies. It is crucial for financial policies to be attractive enough to encourage migrants to send remittances. However, restrictive policies in sending states have a negative effect as they decrease the likelihood of emigrants returning or investing (De Haas, 2005b:13). On the other hand, receiving countries' policies also impact remittances. Instead of making

illegal immigrants completely illegal, it is more beneficial to address them and integrate them in a way that minimizes social costs and maximizes economic benefits. Strict migration policies in receiving countries only lead to more illegal migration and human smuggling (De Haas, 2005b:14). De Haas (Ibid.2005b: 14) advocates for a comprehensive approach that grants migrants the right to "remigration," increasing their chances of returning or investing in their home countries.
The Barcelona process, also known as the Euro-Mediterranean Partnership (EMP), aims at providing development support to the home countries of illegal immigrants. Morocco, specifically, faces challenges related to weak economic growth, unemployment, poverty, and migration.The European Union (EU) has been Morocco's main trading partner and has played a crucial role in the EMP since 1995. The EU aims to enhance economic development in Morocco's southern region by establishing a free-trade area with assistance from the northern region. However, accepting limitations on agricultural exports to the EU has negatively affected Morocco's economy, which heavily relies on agriculture. This perpetuates an unproductive cycle.

Despite efforts to control migration, there continues to be an influx of migrants from Morocco into countries like Spain and France. Surprisingly, these strict immigration policies actually contribute to increased illegal migration and human smuggling instead of reducing it.

In conclusion, comprehensive migration policies can incentivize migrants to invest in their home country. Governments can support investment in sectors like infrastructure, tourism, and local products by establishing dedicated funds. Additionally, economic development can be encouraged by supporting self-help organizations such as Home Town Associations (HTAs). HTAs have the ability to finance local projects like schools and generators.

However, implementing these strategies in Morocco may face challenges due to

unfavorable conditions, economic problems, and market failures.De Haas and Vezolli (2010) argue that despite obstacles, this approach can shift development responsibility away from the government and address Moroccan authorities' failure to provide conducive conditions for economic growth. It is important to note that HTAs do not necessarily prioritize essential enterprises. Additionally, migrants typically prefer investing money in projects that benefit their families or family communities. The significance of private remittances between households is evident through the application of the NELM theory in southern Morocco. Therefore, it is crucial to create attractive conditions for migrant investments by integrating them into national development efforts rather than isolating them within migration-and-development policies. This inclusive approach has been successful according to the experiences of French NGO Migrations et Developpement and a Moroccan NGO with the same name, which have actively initiated local development activities since 1990 with a focus on establishing basic infrastructure projects. The success of these efforts has been demonstrated in over 200 villages in southern Morocco by Migrations et Developpement. However, it is crucial to have independent ratings for such endeavors as authorities and HTAs openly discuss potential failures (De Haas and Vezzolli 2010), resulting in uncertainty regarding their functioning.In order to conduct research and assess the strengths and weaknesses, it would be advantageous to have more transparency. This will improve initiatives that have the potential to contribute to Morocco's economic development. Furthermore, Taylor (1999: 81) argues that migration should not solely be seen as a solution or substitute for effective economic policies. It is crucial to establish favorable conditions in order for remittances to have a positive impact on the development of regions where migrants

come from.