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June 2020, No. 94


Global Emigration

Financial Emigration and Elite Immigration


First, payments made by an immigrant to their family in Iran are less than five percent of the total income they earn in a foreign country.


 

Although the high demand of the global supply chain for skilled and creative forces is the most important factor in the continued immigration of the countryís elites to foreign governments, the poor quality of Iranian policymakers should never be forgotten in this respect. These forces are guilty of never providing a fundamental strategy to attract the knowledge of Iranian experts in the domestic environment: The process that has led people to take a huge amount of historical and scientific experience with them and move them to the destination country at minimal cost. However, the global economic cycle, which largely welcomes the immigration of both skilled and unskilled labor force, often welcomed skilled and specialist Iranian work force and this very factor is the basic key in understanding the implications of departure of our scientific elite from the scene of the Iranian economy.

Meantime, since people in Iran have a higher level of income and social status, they have a higher chance of leaving the country successfully and continue to work in a new environment; so when uncertainty rises in the economy and the economy is not ready to use specialists, everything will be ready for the flight of the elite. These people not only have the ability to adapt to the secondary environment but also their financial strength and ability would allow them to take risks. Therefore, when the landscape is blurred indoors and in the new environment the possibility of falling into poverty is eliminated, the preference is to escape! From the financial and capital points of view too, the exit of the economic elite is the first and most natural consequence of widespread economic disruption.

Even at times of uncertainty deepened by the recent crises, these individuals not because of technical knowledge but thanks to their high experiences and suitable wealth are able to easily restore stability to their financial outlook due to their ability to purchase a property or invest in a third country: A dilemma that not only diminishes the international position of the country, while its implications being more acute than the few benefits it may have, presents new difficulties for the national economy. Therefore, statements made by political officials and statesmen that the benefits of elite immigration outweigh the consequences of labor and capital outflow from the country are easily refuted. By focusing more on this issue and examining economic statistics, there are two main reasons that are sufficient to refute the claims of government officials.


The second case is not very credible given the persistence of productive activity of immigrants after a pause in Iran, since the return of capital to the country requires a level of social and economic stability that has at least in recent years been less likely to emerge.


First, payments made by an immigrant to their family in Iran are less than five percent of the total income they earn in a foreign country. This is due to the type of immigrantís labor force who often enters new geography with their family and with the intention of residing permanently. More precision on the quality of immigration of skilled labor proves this. It is only natural that this person spends or saves most of his income in the same environment. For example, a Pakistani worker immigrates alone and returns to his family in Pakistan 70% of the total income he earns by working as a driver, waiter or salesman. Since this person does not spend much on welfare issues and does not pay attention to continuing his studies at university, he often returns most of his income to his family and his country.

The second case is not very credible given the persistence of productive activity of immigrants after a pause in Iran, since the return of capital to the country requires a level of social and economic stability that has at least in recent years been less likely to emerge. If this was raised by government officials about 15 to 20 years ago and they were hoping for the return of creative immigrant forces to the country that would be plausible. What was clearly seen as a motive for the return of Iranians abroad was that during the era of reform or the first government of Hassan Rouhani, they tended to return some of their capital to the country. But this is not the case right now, and all the evidence points to the widespread desire of economic activists to move their wealth out of the country.

Moreover, when wealth and knowledge generating individuals and currents leave the country, they totally cut or minimize their contacts with the country due to the specific environment of the Iranian economy. If we do not consider the low level emotional connection of immigrants with friends and family as a result of non-generation of economic wealth from this conduit, almost most of these individuals or companies or investors after leaving the country would not cooperate with the Iranian economy in any form of consulting, trading or investing. Here, too, Iranís economy is cut off from the outside world, so that isolation would become the main theme of domestic business.

One of the inauspicious consequences of this practice is the penetration of the spirit of xenophobia in the Iranian economy to the deepest layers, which even engulfs ordinary people, reducing the possibility of the Iranian economy cooperating with foreign experts or expatriates seeking to return to the country. Apparently xenophobia is a subject most of us attribute to governments in Iran, but it is not something that can be concealed at the individual and social levels. There are many events in the authorís personal memory that are of the same gender and can be fully interpreted in the context of xenophobia. The huge and irreversible consequences of this issue are more pronounced when we rarely see foreign experts in a metropolis like Tehran. In fact, while we rarely encounter immigrants seeking to work or invest in Tehran or the rest of the country, it is taken for granted in cities such as Istanbul, Dubai, or other major cities in the neighboring countries. The high rate of admission of these countries and the flood of foreigners whether specialist or capitalist, has led to the development of metropolises such as Dubai with the capital of Iranian businessmen. When you have an environment in which the flow of ideas, thoughts, and attitudes is a constant, positive thing, solutions are found to resolve the issues. In Iran, however, a large wall has been erected to prevent any new ideas from penetrating. So when no one is willing to cooperate, nor the country is willing to attract new ideas and foreign intellectual, scientific, and financial forces, from Asia, America and Europe, the flow of development stops. This will make the vast majority of elites who have absorbed huge money for long years on their training and education be offered to foreign countries in full scale.

These foreign governments were once the United States, Canada and the United Kingdom, which were the first to attract Iranian capital and manpower. This has changed recently, and the trend has been to increase immigration to neighboring countries, which are currently small in size. If it continues, it will impose different consequences on the Iranian economy than ever before. In the past, due to Iranís long distance from the United States and Canada the presence of Iranian immigrants in these countries or the inflow of financial capital from Iran to these areas had no tangible impact on society. But if the ongoing immigration trend to neighboring states continues, because of the long border with these countries and other interactions the benefits of immigration will become more tangible to the inhabitants of the country than ever before. The big issue with this process is the psychological effect of touching development and prosperity in the neighborhood. As noted earlier, Dubai is a clear example of having experienced a long period of growth and development with the capital and creativity of foreign forces, including the Iranians.

But in the end, Iím addressing policymakers who seem to be indifferent to the growing issue of financial and human capital outflows. You might imagine that this would lead to a mass withdrawal of the protesting elite from the country, which is not bad. But it should be noted that without the presence of these experts, it is impossible to move the country towards economic growth, and without economic growth, the countryís stability will definitely be in danger.   

 

By: Mohammad Reza Farahi

 

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  June 2020
No. 94