By IPS Correspondents
SUVA, Nov 2 2007 (IPS)

A leading economist has urged Australia to reconsider its opposition to a migrant worker scheme that could act as a safety valve for social and political pressures in neighbouring countries caused by bourgeoning youth populations.

Prof. Biman Prasad of the University of the South Pacific said the advantages of the scheme outweigh the disadvantages raised by Australia, and that its rigid stand on the issue was damaging its relations with its smaller neighbours.

Delivering a paper, ‘Economic Integration and Labour Mobility: Are Australia and New Zealand Short-Changing Pacific Forum Island Countries?’ at Otago University in New Zealand, this week, Prasad said Australia’s outright rejection of the scheme has further strained its relations with regional countries.

Australia’s stand, he said, was seen as hypocritical and self-serving because on the one hand, it was pushing for free trade in goods and services while on the other, it was fighting to keep the free movement of labour out of the agenda for further economic integration.

“Already there was a perception that Australia was proposing and getting Forum Island countries to adopt trade and other policies from which it stood to gain the most in terms of tariff and duty free access,” said Prasad.

“It would not be an exaggeration to say that Australia is seen to be self-serving and hypocritical over the labour scheme in that it has no qualms about cherry picking the cream of the human resources in Forum Island Countries while denying access to the poor who are in most need.”

“Labour mobility is absolutely critical to the long-term development of the South Pacific,” Zoellick told newspersons while in Sydney to attend a meeting of Asia Pacific Economic Cooperation (APEC) forum finance ministers in August.

He said the move would boost the fledgling economies in neighbouring countries such as Papua New Guinea, the Solomon Islands and East Timor with temporary foreign workers returning home with new skills and finance.

They could fill low-skilled jobs including those now being done by foreign back-packers, such as seasonal fruit- picking.

In an interview with IPS, Prasad supported the call by Zoellick. “The Pacific provides doctors, nurses, educators, IT experts, sports people and professionals in various fields to help prop up institutions in Australia and add to the quality of life and economic growth.

“Yet Australia denies entry to a small number of unskilled labourers despite a clear demand for such labour,” Prasad said.

He added that Australia was aware that most Pacific Island countries had serious youth unemployment problems. In some countries, these youth were sources of political and social instability. A labour scheme that provided employment and improved the quality of life of people could save a costly military intervention later.

“While, in the long-term, economic growth in these economies would be a better way to resolve unemployment problems, in the short-term there needs to be a safety valve and the seasonal workers scheme would be one,” Prasad said.

The Bank, in a report last month, was critical of Australia’s immigration policy, saying it was luring professionals and skilled workers from poorer countries, thus depriving them of desperately needed doctors, nurses, nation-builders and reformers. The study said that the more than 75 percent of all graduates from Tonga and Samoa and 62 percent of all graduates from Fiji had emigrated, most of them to Australia and New Zealand.

In 2000, Australia was the world’s biggest beneficiary from “brain gain”, and had more than 1.5 million migrants with tertiary education, more than any country except the United States and Canada, and far outnumbering the 116,723 tertiary-educated Australians living overseas.

The report dubbed Australia as largest importer of skilled workers relative to its population. It said that Australia had a moral responsibility to address the problems their policies were creating for the countries migrants were leaving behind.

Prasad said, as the regional power that had drawn a significant number of skilled professionals from Pacific Island countries, it was only fair for Australia to accept seasonal workers from the region.

On concerns raised by some studies about the emergence of a “remittance economy” in more countries in the region, Prasad said: “One of the immediate benefits of allowing unskilled and low-skilled workers is the flow of remittances to FICs. Globally, remittances have become an important source of external income for many countries amounting to about 167 billion dollars – about three times the level of development aid.

“While it is true that you cannot build economies on remittances and it is correct that much of it (remittances) may be spent on consumption, this is not always the case,’’ Prasad said. “In Fiji, it is estimated that annual remittances amount to about 300 million US dollars, accounting for about six percent of GDP.

Data from household income expenditure survey shows that a good proportion of remittances goes to the poor households for education and other productive expenditures.

Prasad said there is some resentment among Pacific Island countries on Australia’s rigid stand. But they are muted because the countries are mindful that Australia is a very important trading partner and provides a significant amount of aid and support to Pacific Islands.

Pacific Island countries, added Prasad, would continue to push for the scheme on the diplomatic front. “A properly managed scheme could work very well, and it is possible that Australia is watching the operation of the scheme in New Zealand. If the New Zealand scheme is successful, Australia could well follow suit.”

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