Economics and politics - comment and analysis
13. September 2015 I Heiner Flassbeck I Economic Policy, Europe, Globalisation and Development

The boat is far from being full

This is an updated version of an article that was published September 1 in German.

Unfortunately, the main event in August was an unexpected one. The almost unabated influx of people from conflict zones into Europe shows glaringly how disastrous the situation has become in their home countries. Let it be said, loud and clear, that the situation in certain North African countries and in the Middle East has been caused, to a very large degree, either by misguided Western military interventions or by policies that have been orchestrated by the West. What is more, the widely divergent responses of the European member states show that no common European policy ground can be found. Several countries are pushing the hot potato away as far as possible when it comes to the question of who does what to help those in need. In the meantime, hundreds of people are drowning at sea and suffocating on land.

In Germany, it has to be said, the majority of the citizens, many politicians and the Government have responded in an entirely appropriate, indeed European, way. Unfortunately, this is not the whole story. On the right, the actions of a small but aggressive mob clearly revive associations with the darkest hours of German history. These people blindly swallow the stupidest prejudices. The refugees that are now in Europe took enormous risks in order to escape from intolerable and life threatening situations. These people are refugees and nothing else: after all, “economic migrants” do not trek hundreds of kilometres in masses of hundreds and thousands. The exact mix of economic and political hardship that made them abandon everything, flee and face an uncertain future is irrelevant now that they have taken refuge in Europe. The legal (or rather legalistic) difference between political or war refugees and economic migrants should not be a criterion to determine who can stay and who cannot (see also our piece of last April here).

But we cannot take them all, people object to such a view. That is right but it is an argument without substance. We do not have to take them all. Even if ten millions people flee their homes in North Africa and the Middle East, the european Union with more than 400 Million inhabitants cannot argue that the “boat is full”. If Germany would accept one or even two millions, nothing would be full. Investment to create the necessary infrastructure to accommodate these people would add to economic growth and no one in Germany would suffer if the government would be willing to finance this investment by using the capital market that is eagerly awaiting more demand from the government.

Legalistic position lead to nowhere in a world of chaos, hunger and war. In addition, international human law, which was codified in another era, no longer works. According to a report of the World Bank from 2014, in the worst-case scenario, 30 per cent of agricultural land in Africa will be lost by 2030. If this happens, millions of people will flee their regions and civil strife might well ensue. They will be displaced persons in their own country or end up in refugee camps in neighbouring countries. Desertification in countries such as Iran and Afghanistan is expanding as burgeoning populations place growing pressure on precious water resources. What will happen to the farmers in these countries when drought transforms their pastures into inhabitable deserts? By contrast, the South of Pakistan is being threatened by enormous floods more often then ever before. Nowhere on land are temperatures rising faster than in the Sahel where some of the poorest countries in the world are located. What are these people supposed to do? And what are we doing to help prevent the worst?

International law does not recognize the existence of ecological or socio-economic refugees. It protects indigenous people, but if the ecosystem of people collapses, there is no protection. This is grossly unfair, especially since these countries contributed the least to climate change. The only solution is to make common cause, to show humaneness and solidarity and make economically the best of it, which is something that really can be done. This is a global imperative as much as being a European one. When societies collapse, states become ungovernable and civil wars destroy the social and economic foundations of a dignified life, one cannot dismiss anyone who escapes from such circumstances. Those who now talk in Germany about creating a clear legal basis for immigration must have the courage to speak out: separating ‘political refugees’ from ‘economic migrants’ has no base in reality. That is the very first point.

The problem is that everything in the world remains closely connected: as long as we firmly hold onto our wrong economic policies, it will be impossible to solve anything. In Germany, many communities, villages and cities, are taking in refugees and are doing very good work. But their means are insufficient. They lack the necessary funding to set up decent accommodation. Once again, our economic and financial policies are to blame. Because what is the case? Politicians discuss funding for day-care staff, accommodation and governmental aid within the iron framework of their restrictive economic policies, even when state and city budgets show surpluses. Once again, ideology clashes with rationality, although it is all really simple: invest now or you will overburden future generations in an intolerable manner. There is a great and genuine willingness of the vast majority of German politicians to act towards the refugees in a rational and humane way, without xenophobic resentment or religious prejudice. Their position remains nonetheless highly irresponsible as long as they stick to their nonsensical fiscal and economic policies. Nothing will be solved as long as they strive for trade and budget surpluses and never understand the inherent destructiveness of such policies.

We should not forget about Western failures in dealing with the countries of origin of the refugees (see for more on this the article from last April that was mentioned already). It is a story of irresponsible military interventions and poverty-inducing economic policies. Most of these policies have been inspired by ideology adopted from the International Monetary Fund: the usual dogma’s concerning the virtue of unfettered markets, liberalization and pushing back the state. These policies are responsible for a lot of misery and chaos. It would be more honest if we could show people who are forced to flee their countries that we have the capacity to learn and that we are willing to respond pragmatically and progressively in order to ease their distress and grant them a chance to have a human life.