Migration – Compounding uncertainty in emerging markets

From Trump to Salvini, Orban to Farage, populists exploiting migration to disruptive political effect has emerged as a powerful trend in Europe and North America . This is set to continue as Brexit drags on, the 2020 US presidential race beckons and migrant boats ply the Mediterranean in ever greater numbers.

Whilst disturbing established party-political systems, the issue has also impacted trade and bilateral relations. A migrant deal struck between the EU and Turkey in 2016 has been leveraged by President Erdogan to extract concessions on visa-free travel and contest EU sanctions over Turkish drilling near Cyprus. A desire to restrict migrant numbers also figured in Trump’s threats of tariffs against Mexico. The full consequences of Brexit for cross-border trade remain to be seen.

As problematic as these situations continue to be, the impact of migration is more acute and potentially more destabilising in states already suffering from severe economic strain and intercommunal tensions. Most of these states are to be found in the Middle East, Africa and Asia.

In Lebanon, the presence of up to 1.5 million Syrian refugees is becoming increasingly controversial at a time of severe economic hardship. The refugees also threaten to destabilise Lebanon’s delicate demography, with the arrival of 1.5 million predominantly Sunni Muslims perceived as a threat to the Christian and Muslim sects which dominate the country’s political institutions. If Syrian refugees settle permanently in Lebanon, like the Palestinians who arrived after 1948, the current political settlement will be tested to the limit.

South Africa has seen decades of economic underperformance and spiraling crime rates, driving growing hostility to migrant communities. This month, xenophobic attacks in several cities targeted African migrants and their businesses. The government’s inability to stem the violence is damaging diplomatic relations, particularly with Nigeria, whose vice-president withdrew from a World Economic Forum event in Cape Town in protest. African economic advisers have also suggested that violent anti-immigrant sentiment in South Africa could derail the negotiation of the African Continental Free Trade Area. The trading bloc is still in development, but its promotion of free movement could exacerbate public anger in South Africa and the ensuing diplomatic controversies.

Bangladesh has recently sought to toughen its stance on the 750,000 Rohingya refugees that have entered the country since 2017. One of the most impoverished countries in South Asia, Bangladesh has struggled to integrate the Rohingya and is now attempting to persuade them to return to neighbouring Myanmar. These efforts have included restricting access to mobile networks and the internet. Clashes between Rohingya, police and local people has seen an increasing military presence around refugee camps, with the potential for the imposition of more severe security measures in the months ahead.

In these examples, migration has had implications ranging from the tactical, as in localised violence, to the strategic, such as delaying multilateral trade deals. There are several other cases to monitor in the coming months as migration compounds economic strain and political uncertainty. Colombia, for example, is dealing with both resurgent domestic terrorism and the burden of 1.4 million Venezuelan refugees. Southern Africa and the Sahel are two more regions where emerging migration crises caused by environmental conditions could drive political instability. Drought in Zambia, famine in Zimbabwe and desertification in Mauritania and Senegal could all drive population movements with destabilising impacts and knock-on effects for business in the months ahead.