Effect of Global Mobility on Country Development

Mobility enables people to migrate either internally or internationally. International migration relates to the development of both receiving and sending countries. The importance of migration and remittance in shaping international development has led the United Nations to feature migration and remittances in their Millennium Development Goals (MDG) and post-2015 UN Development Agenda. The United Nations estimated that in 2013 there are about 232 million people migrated internationally and this number had increased 32 percent since 2000 (UN DESA, 2013).

A growing number of international financial flows of remittance worldwide have made international migration received more attention compare to internal migration. International flow of remittance to developing countries is increasing and exceed official development assistance and private debt and portfolio equity (World Bank, 2013). Among recipient countries, developing countries always record high number of remittance receipt and the largest recipients are countries in the region of East Asia and Pacific (EAP). The Flow of remittances transfer to developing countries amount to USD 404 billion in 2013 (World Bank, 2014) and estimated to reach $515 billion by 2015. Almost 53 percent of remittances received by developing countries goes to the EAP region and this region was expected to receive $109 billion in 2012 (Figure 1).

Figure 1 Trend in remittance flows to five largest recipient in the EAP region (US$ millions)

Source: The World Bank, 2012

Meanwhile, internal migration involves more flow of people, particularly in developing countries. Report of UNDP Human Development in 2009 shows internal migrations far exceed and four times larger than international migration. Movement of people within the same nation involves 740 million, meanwhile movement of people internationally involves 214 million of people. Moreover, internal migration data between 2000 and 2010 shows intensities of movement rises in several Asian countries with more tendency towards increasing lifetime migration across Asia and Latin America (Bell & Edwards 2013).

Short distance is one of features of internal migration that makes people to move for many reasons such as to escape from poverty, to get better opportunities or to diversify income sources. In this type of migration we see the flow of people from rural to urban areas. For developing countries, many estimations report that around 40 percent growth of urban population come from migration or reclassification of rural to urban (Chen et al. 1998; UN-Habitat 2008). Although internal migration involved a significantly higher number of people, however it receives much less attention to the researcher of migration compared to international migration particularly in terms of empirical evidences (Zanker & Azzari, 2010; Harttgen & Klasen, 2011)

Movement of people either internally or internationally has many economic and social implications for migrants and household sending migrants and for sending and receiving areas. Among the few research on internal migration, Harttgen & Klasen (2011) shows that internal migration have significant effect to human capital as such that internal migrants attain slightly greater level of human development, life expectancy, education and moreover in income compare to non-migrants. These evidences suggest that internal migration could play important role in improving wellbeing of people as much as international migration do.

Disparity between rural and urban growth leads to considerable number of people to migrate. Rural to urban migration has shaped urbanization. In most populous countries, urban population shows an increasing trend. Among the most populous countries, Indonesia urban population is concentrated with 53 percent people live in urban in 2014 and it is estimated to increase to 71% by 2050 (table 1). This proportion is higher compare to second most populous country, India. Among three sources of urban population growth, which are natural increase, internal migration and transformation of rural into urban, contribution of natural increases shows decline pattern from nearly 70 per cent in the 1960s to 32 percent in the 1990s (UN, 2011). Thus, it can be inferred that internal migration in Indonesia responsible for high urban population growth.

Table 1 World Urbanization and Prospects of Five Most Populous Countries

Source: UN World Urbanization Prospects, 2014

Although internal migration results lower rates of remittance compare to international migration yet other features such as lower cost and risk make internal migration contributes as much as those from international migration to the economic status of household sending migrants. Personal features of remittances and direct transfer to household sending migrants make remittances beneficial to promote human development, reduce poverty and moreover development of migrant sending areas. Transfer of remittances to household sending migrants can be other sources of income that helps to smooth consumption, provide working capital and have a multiplier effect through increase on household spending (Gupta et al, 2009)

However, internal migration from rural to urban areas can also create problem to urban areas. A growing number of urban population can be problems if urban facilities and public infrastructure have not kept pace with it. Pressure on urban areas result in slum formation and other social problems. Rural to urban migration results in an unbalanced distribution of population (Lall et al, 2006), more likelihood of incidences of urban poverty and growing number of slum dwellers that constrained a modern urban functions (Meng & Manning, 2010).

Internal migration in Indonesia characterised by highly geographically mobile population, where almost one in two people migrated at least once across the archipelago (Deb and Seck 2009). Despite the growing number of international remittances in Indonesia, many features of internal migration such as distance, cost and risk and less skilled labour characteristics of Indonesian migrants makes internal migration also favourable. Moreover, it is argued that poorer people are more likely to involve in internal than international migration. Remittances from internal migration between districts and municipalities, rural and urban areas, will benefit poorer people more and much more important for poverty reduction (Deshingkar 2006).

Voluntary migration (merantau) is part of culture in some of Indonesian ethnic groups. The economic crisis of the late 1990s resulted an increase in rural village return migration and increase in documented Indonesian working abroad in 1999-2004. In addition, start in 2001 government implements fiscal decentralization policy in such that the local government (district and municipality) have more discretion over their own revenues and expenditure. It can be expected that differential in employment opportunity and economic development between regions will attract more people to migrate (Effendi et al, 2010; Firman T, 2004).

Integrating economic impact of migration into economic development planning would be an important aspect. Better understanding of the consequences of migration both international and internal as well as urban to rural will contribute to national development and poverty reduction strategy. We explore this issue in the context of livelihood of migrants in urban destination as well as household sending migrants at origin.