Reverse Migration: India's Chance

Recession, uncertainties and difficulties in the immigration process and emerging opportunities in India combined, have created a flow of reverse migration from the United States to India. There is a trickle added to this from the UK, and the dam has burst in Dubai. So, suddenly, Indian cities are full of returnees, with a bit of cash, trying to start a new life all over again.

Though I may soon join them, I knew about the trend reading an essay in Businessweek. The obvious conclusion was that America is no longer the only land of opportunity. Also, the same research, done at Duke University, shows that the people who are returning home to China and India are highly educated, about 35, economically successful and many of them actually are Permanent Residents or Citizens; implying that while immigration difficulties may play a part, this is not the only reason people want to go back.

As this study point out, the better 'quality of life' is the most cited reason for this reverse migration. The charm of staying near one's own family is undeniable. In my own experience, which I have written about previously, the comfort of staying home offers a perfect foil to the stresses and tensions of modern work life, and become particularly appealing when the future looks hazy and the work environment becomes uncertain.

Besides, 'opportunity' is another reason. Vivek Wadhwa, in the essay cited above, points out that while the returnees may be earning less in absolute terms in India and China, that money can buy them more - leading to a better life than back in the United States. This is the concept of Purchasing Power Parity in action. Though prices have risen in India, because labour is still cheap and plentiful, the PPP multiplier hangs on at the figure of 5.5, which essentially means that $1 can buy $5.5 worth in India. This implies that if someone earns $1,000 a month, his lifestyle could be comparable to someone earning $5,500 in America, though this is not necessarily true, as some of the things in his consumption basket, at that level of salary, would be as dear - like the housing or the fuel for the car etc. However, adjusting for those, it will still feel like $4,000 a month or so - a pretty neat lifestyle for someone starting a career.

Considering that most of these returnees are around 35 years of age, the big charm of India is being close to the family particularly when one has one or two young children. Child care is prohibitively expensive in the West, and being close to families will allow most returnees an alternative to full day child care or staying at home. While creches are prospering in India, the grandma, with a driver, often drops the kids off and picks them up again. That makes life a whole lot better for the returning couple.

Besides, I also think schools are better in India than in UK and USA. I am leaving out elite schools - this comparison is between mid-tier schools in these countries and really good schools in India. The Indian education system is improving at the school level, though it remains a disaster [barring a few world class institutions] at the tertiary level. This is actually a common trend one notices all over the world. Once a society becomes prosperous, the focus on science and technology education goes away, and pupils, more often than not, want to focus on softer things - art and music, for example. I must state I have nothing against Art and Music, and I would have loved to have an opportunity when I was at school, but I do think the rigour of education is missing in many Western schools and a good school in India can provide that to children. The ideal configuration for someone studying today is to finish school in India and come to the West for college or research, and many of these returnees will have that in mind.

There is another factor which will prompt me to go back some day. I don't feel welcome in Britain. America may be different, and since I have never visited America, I can not comment. But I know in Britain, there is this implicit xenophobia, and immigrants are all painted in the same brush and seen as terrorists, beggars and barbarians. There is racism, non-whites are not preferred and South Asian looks make a lot of people very uncomfortable. While I earn an above-average salary and therefore pay top rate of tax, it is not uncommon to see someone on tele, who is on benefits himself, complaining about parking spaces in the council parking site because of all the immigrants. There was this TV debate I have seen where representatives of major parties were complaining about the stress on the National Health Service [NHS] because of the immigrants, though they shut up when a labour minister, who happened to be the daughter of a Jamaican nurse who came to work in the NHS in 1950s, reminded them that there will be no NHS without the migrant doctors and nurses.

The benefits of immigration in a society like Britain is plain to see - it gives the residents the lifestyle they have taken for granted for so many years. The last immigrant leaving Britain may as well need to turn off the lights here. Immigration in America is slightly different though: there, immigrants take the lead in innovation and enterprise, along with some brilliant American graduates, and that makes them the most advanced country in the world. And, from whatever I gather, public mood and the populist president has suddenly turned against the immigrants.

Consider what President Obama is saying. He is proposing a significant cut in H1Bs. He is saying it makes absolutely no sense to import nurses and he will throw money at training nurses at home. All politically correct, but historically wrong statements! America is what it is today because it benefited immensely from the European migration in the first half of twentieth century. To maintain its lead, it needs to attract the talents from all over the world and encourage such migration. It actually needs a National Talent Management office. However, they want to shut the doors now and try to be more like China in the late Nineteenth century - good luck to them! For the nurses, it is foolishness, because the President can not fight all the battles together and he has to give money to the banks first if he has to get anywhere in the next three years and win the reelection; and if he delays the money for nurse education for three years and do not allow overseas nurses to come to America, he will anyway lose his reelection and jeopardise a lot of lives on the way.

However, the point of this post is not America, but India - which has once in a century opportunity of returning migrants, and must take advantage of this to become a great nation. These people, educated and entrepreneurial, can turn the economy and bring a new dynamism into it. The country, however, must facilitate this. Lots of people are talking about better roads, schools and hospitals to keep them happy; but that is not the point. These professionals are capable and enterprising enough to build their own roads, schools and hospitals soon. India has to provide them with an environment which allows entrepreneurship and innovation; not the corrupt official who would want to make a quick buck out of an American Babu, not arcane tax codes, not the same legal system where you need to fight your grandson's battles and not the indifferent, criminal political class that extract a disproportionate rent from the economy. But then, I am an optimist. Having met some of these professionals myself, I know that they have boundless energy, enterprise and a love for their country; I hope that they will take all of it in their stride and clear all of it, including politics. I think India is at its inflection point - and we shall see a truly new India, emerging in a few years time.