Immigration is good for business, not a burden, in Hong Kong and the rest of the world

  • September 24,2018
  • Stephen Vines says Hong Kong need only look to its own history to discover the truth in the reams of research that highlight the benefits of immigration to society

    Chief Executive Carrie Lam Cheng Yuet-ngor may well have political reasons for extolling the contribution of immigrants to Hong Kong society but it makes a change from the routine immigrant bashing that is high on the political agenda elsewhere in the world.

    Lam, however, only addressed the issue of immigrants coming to Hong Kong under the daily quota system designed to facilitate family reunions but managed some passing reference to the obvious fact that Hong Kong is an “immigrant society”. Indeed, this city owes much of its dynamism to this self-selecting group of people who upped sticks to escape Communist rule, but there’s an embarrassing political message in that particular narrative.

    Anyway, that’s how Hong Kong developed and it remains strange that this place, a poster child for the advantages of immigration, has no coherent immigration policy, aside from the one ensuring that the Hong Kong government has no say in who comes here under the daily quota system, leaving it entirely to the mainland authorities.

    Aside from this, the government has shown limited interest in immigration policy outside the technology sector, despite the fact that imported labour makes a major contribution in industries ranging from tourism to health care and food and drink, all of which are big contributors to the economy.

    At least Hong Kong politicians have been less inclined to sign up for the anti-immigrant demagoguery that is dominating the political debate in countries such as the United States that were built on immigration. In a number of other places where immigrants have made incredible contributions to society, they are now being demonised.

    The range of these countries is breathtaking, from South Africa, where there is a backlash against immigration from elsewhere in Africa, to Sweden and the Netherlands, traditionally regarded as open-minded on this issue, and Germany where the immigration debate threatens to bring down Chancellor Angela Merkel, arguably Europe’s most successful leader.

    Fear of competition in the labour force is understandable and disquiet over the introduction of new cultures is similarly unsettling, especially in poorer areas where immigration can lead to overcrowding. However, the frequently aired view that immigration drains resources and is a burden on the economy is stupefying nonsense.

    The small mountain of evidence to the contrary is freely available and, at the risk of stating the obvious, let’s look at a couple of examples, although there are plenty more at hand.

    A major study on the impact of immigration undertaken by the Organisation for Economic Cooperation and Development (OECD) was published four years ago, covering its 36 member countries over 10 years. Among its conclusions are:

    Migrants’ net contribution to the public purse through taxes and social contributions outweighs benefits they receive; so-called economic migrants make the biggest positive impact on the public purse.

    Migrants boost economic growth by increasing the working-age population, bringing in skills, possessing a strong work ethic and contributing to technological progress.

    Migrants are particularly important in filling niches in both the fast-growing and declining sectors of the economy.

    Migrants have helped to enhance labour-market flexibility, especially in Europe.

    The OECD covers developed economies but a study by academics published in the Harvard Business Review last year found that the biggest beneficial impact of immigration on economic development was seen in less-developed economies.

    Studies aside, most people are aware of the anecdotal evidence of the benefits of immigration; even those keenest to stop the flow have a hard time denying the entrepreneurship and work ethic of migrants.

    In this part of the world, the impact of Chinese migrants (mainly from the south) on business development throughout Southeast Asia is legendary and rarely disputed.

    However, their achievements are not unique – Jewish immigration in Europe and North America had very similar effects and the same can be said for the way immigrants from South Asia helped transform many African economies and are now notably impacting on the growth of hi-tech industries in the West.

    In the US, there are many studies showing how immigrants have contributed to entrepreneurship and innovation. For example, a recent National Foundation for American Policy study looked at 87 start-up companies valued at US$1 billion or more and found 44 had at least one immigrant founder.

    In Hong Kong, it is hard to think of a single major commercial enterprise that was not founded by an immigrant.

    Surely the time has come for Hong Kong to revisit its past enthusiasm for immigration and take a positive view on how it contributes to economic development. Elsewhere, populist governments determined to thwart immigration need to think more carefully about the economic consequences of so doing.

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