Nice European expansion

national | miscellaneous | news report Monday August 12, 2002 16:35 by Dathi

Article for your information from yesterday's "Sunday Business Post", 11 August 2002, page 18, by Mr Emmett O'Connell

Nice European expansion?
COUNTING THE COST OF IRELAND'S 'FREE-FOR-ALL' IMMIGRATION

>From 2004, many Eastern European immigrants will be able to live and work
here without permits. While this will bring economic and social benefits,
policies must be formed now to minimise any potential downsides, writes
EMMETT O'CONNELL

__________

How many economic immigrants are likely to avail of the Irish Government's
recently announced open door immigration policy for the East European EU
Applicant countries in advance of the seven-year waiting period provided in
their Accession Treaties?

As in all large-scale population movements, modern and pre-modern, there
will be winners and losers. To quantify the benefits and costs of a
'free-for-all' immigration policy, it is necessary to have some idea of the
numbers likely to be involved.

Certainly the Government's twin-track approach to benchmarking and
unrestricted immigration should bring a halt to the inflationary wage
spiral in the public and private sectors that is currently threatening to
derail the Irish economy.

By overcoming labour shortages in health care, construction, information
technology and certain areas of education and the services sector, wage
levels can be stabilised, and possibly even lowered, while at the same time
benefiting public services.

Heavy East European immigration should significantly change the bases for
comparison between private and public wage and work productivity levels
involved in the current benchmarking exercises.

It is little wonder that the Irish Government, employer groups, the IDA,
the banks and international investors favour acceptance of the Nice Treaty.
If it to be followed by a 'Big Bang' EU enlargement of ten new Member
States, then their citizens will be able to come to Ireland without
work-permits from January 2004, even though they will not be entitled to
move around the EU as a whole for up to seven years.

For those who must sell their labour power, there is a serious downside,
however. Competition in an open labour market resulting from a
free-for-all immigration policy for the East European Applicant countries
from 2004 will inhibit pay and promotion for existing Irish workers across
the board - in construction, services, banking and manufacturing.

The competition will come from a well-educated, physically fit,
well-motivated and often English-speaking workforce migrating from
post-communist high-unemployment, low-wage or no-wage economies.

It behoves us then to try and put a figure on the numbers likely to be
involved in order to prepare policies to mitigate the downside. So far in
this debate absolutely nothing has been done to attempt to quantify
realistically the impact of a free-for-all immigration policy from Eastern
Europe in this context.

Let us take some examples from modern day states that run proactive
immigration policies and use them as a template for the Republic of Ireland.

Canada has long practiced a proactive immigration policy. Given its vast
size and a population of 31 million, an active immigration policy is
central to its economic development. Canada's long-term goal is to admit 1%
of its population base each year as immigrants. In 2001 the figure came to
around 250,000 actually admitted, due to the tough criteria Canada lays
down for the health-level, educational standard, degree of occupational
skill, financial status etc. of those it accepts as immigrants. But 1% per
year over the long-term is its official goal.

The Irish government, by contrast, proposes no criteria or documentation
for immigrants from the ten EU Applicant countries. By applying the same
1 percent template to the Republic's population base of nearly four
million, one would get a figure of 40,000 immigrants a year to this state
as a long-term minimum.

There is, however, another avenue of statistical analysis by which to judge
the likely movement of population as between Latvia, Lithuania, Estonia,
Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Malta and Cyprus
on the one hand, and the Irish Republic on the other. This is to estimate
the number from this target area likely to avail of the opportunity to come
to Ireland.

Having regard to the fact that the great majority of the EU Member States
have insisted on a seven-year 'lock-out' before EU rights to freedom of
movement of population is permitted, it seems reasonable to estimate that
as the only English-speaking, low-unemployment, high-social-welfare,
high-wage state remaining, Ireland will get the great bulk of those who
emigrate from Eastern Europe over the seven year period from 2004 on.

The combined population base of the ten applicant states likely to sign and
ratify their Accession Treaties over the next year is some 75 million. In
addition, the Government has extended its open-ended invitation to come to
Ireland to the combined 30 million population of Romania and Bulgaria,
although their accession to the EU is expected to be later.

What percentage of these are likely to want to emigrate? Let us take a
modern example, and one we know well - Ireland itself. During the 1950s,
with a population base of 2.8 million, emigration from Ireland was running
at an estimated 50,000 per year, or nearly 2% of the base population.

During the 1980s, when the Republic had a domestic unemployment rate of 16
per cent, emigration amounted to 250,000, the equivalent of one-fifth of
our then labour force of 1,250,000. This was 25,000 a year, or
approximately 1 per cent of the base population, which is Canada's current
target.

Considering therefore the immigration open door proposed by Foreign
Minister Brian Cowen, which is now government policy, allied to inexpensive
three-hour air flights and generous social welfare benefits, it seems
plausible to assume that we shall see entire family units - no bad thing
socially - migrating to Ireland from January 2004.

It would seem reasonable, therefore, to expect a potential maximum level of
migration from Eastern Europe to Ireland in the years from 2004 - before
the EU law provisions of their Accession Treaties come into force - of 1
per cent of their base population of 75 million per year, which would
amount to 750,000 per year.

This raises obvious questions regarding the capacity of existing housing,
health, educational and ancillary services to handle such an inflow of
immigrants adequately. How many will actually take arrive here, no one can
dogmatise about, but there is clearly cause for concern.

The governemnt owes an explanation to the electorate on what preparations
it is is planning to handle the consquences of a Yes-vote in the re-run of
the Nice Referendum, in a context where the Government is planning to
abolish work permits for East European citizens seven years before this
happens in the rest of the EU.

Article for your information from yesterday's "Sunday Business Post", 11
August 2002, page 18, by Mr Emmett O'Connell, Chairman of Consolidated
Communications Corporation Plc. This company is quoted on the Ofex exchange
in London and operates subsidiaries in Bundapest, Moscow and St Petersburg.