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Immigration and Geopolitics in the Digital Age
by Gary Endelman

Gary Endelman practices immigration law at BP Amoco Corporation. The opinions expressed in this column are purely personal and do not represent the views or beliefs of BP Amoco Corporation in any way.


June 15, 2000 -- Just as great nations competed for raw materials in the era of industrial growth, so international relations in the digital age will increasingly be marked by a global competition for high technology talent.  This struggle will be most obvious in the world’s most advanced economies with the lowest fertility rates and consequently the greatest need for immigration.  The line between immigration and geopolitics will slowly fade.  Once viewed as a purely a domestic problem, employment-based immigration will move center stage over time and become a core component of national foreign policy.

 As nations become richer, women do not have as many children.  Fewer workers are forced to support more old people; the so-called “potential support” ratio becomes increasingly difficult to sustain over the long term.  Right now, for example, Spain has the lowest fertility rate in the world: 1.5 children per woman as compared to 2 children per woman in the United States.  In Italy and Japan, by the year 2050, the support ratio could fall to 1.35 workers for every retiree: here, at home, a recent United Nations study predicted it would drop from 5 to 2.4 workers per senior citizen by mid-century.  In the absence of more children, just to keep the support ratio at current levels, the retirement age in every advanced economy would have to be raised to politically unacceptable levels: 72 in England; 74 in America; 77 for Germany and Japan; 82 in Korea.  What about reducing government benefits to seniors? Older citizens are more organized than ever before and they vote.  The political will to alter the social contract in such a fundamental way does not exist.

Immigration is the only answer.  Even those who do not want it are increasingly being forced to accept a reality which can not be denied.  Writing in the June 7th editorial pages of the San Jose Mercury News , Ronald Fernandez puts it this way:  “But, like a mirror the first thing in the morning, the consequences of low fertility rates force us to face the truth.  To continue on our present population course, developed nations must drain even more well-educated brain power from the poorer nations...”  There is a huge amount of money at stake.  The U.S. Commerce department recently reported that, while information technology accounted for only 8.3% of the gross national product, it provided fully 1/3 of U.S. economic growth over the last 4 years.  Studies by Dr. Andrew Whinston, director of the center for research in Electronic Commerce at the University of Texas, indicated that computer-related businesses added 650,000 jobs last year worth $524 billion in revenue - a 62% increase over 1998.  Prof. Whinston predicts a repeat performance in 2000, bringing industry earnings to $850 billion.

 Nations exert power to protect vital interests, and high technology expertise in the digital age is just that. US immigration policy has already become an extension of a computer - based economy on which our role as a world leader depends.  If Lamar Smith does not yet recognize that, other nations do.  What we do, or fail to do, triggers a political response around the world since global immigration begins and ends with the American experience.  That is why all of our political allies, economic rivals, and business partners are so keenly interested in whether Congress raises the H-1B cap.

Three weeks ago, Tim Conway, policy director of Britain’s Computing Services and Software Association, urged the Blair Government to take action before the end of the current academic year, and before Congress lets in more H-1Bs, in order to prevent an exodus of IT professionals from the United Kingdom.  German foreign minister Joschka Fischer toured the wonders of India’s Silicon valley last month in an effort to lure 20,000 computer specialists with the promise of permanent work visas in Germany.  Michael Pfeiffer, the managing director for international affairs at the Association of German Chambers of Industry and Commerce, admitted to the Reuters News Service that “Germany would have to contend with the desire of Indian tech professionals to work in the United States.”  “We have,” noted Pfeiffer with reference to pending proposals in United States Congress to nearly double the annual H-1B quota to 200,000, “to change our laws to compete with US laws.”

 Even traditional societies that have prized cultural homogeneity above all else are casting aside old habits to attract high-tech immigrants.  Japan is facing the consequences of a rapidly aging population.  According to UN demographers, Japan must import 609,000 immigrants each year just to maintain its 1995 working-age population of 87.2 million through 2050; if Japan does that 30% of its population would then be foreign-born.  Compare this to the 1.2% of Japan that came from elsewhere in 1998 and the cultural impact of such a change in immigration policy becomes evident.  Yet, the Keidanren, Japan’s most influential business lobby, recently endorsed the liberalization of Japanese immigration laws as the only way to jump-start the nation’s lagging economy.  While many Japanese fear what a flood of foreign workers might do to their society, Takashi Imai, chairman of Keidanren, told a newspaper interviewer that Japan must press on with immigration reform: “It may cause confusion not only in labor practices but also even in Japan’s entire society.  But I think we have to overcome this.”

 Since more Japanese women are working outside of the home, Eisuke Sakakibara, a professor at Keio University and a former vice-finance minister for international affairs, expressed grave doubt that the deep decline in the Japanese birth rate could easily be reversed.  Profesor Sakakibara openly advocates a radical reform of Japanese immigration practices to “make Japan an open country in a real sense.” If not, he warned in a recent essay in the Mainichi Shimbun newspaper, “ Japan can’t help but decline in the 21st century.”

 The Japanese governing elite seems to agree.  In a policy paper published earlier this year, the Justice Ministry’s immigration department conceded that “it is necessary to conduct immigration policies based on the needs of the economic society.”  Unable to ignore the lowest birth rate in the G-7 club of highly industrialized countries, former Prime Minister Keizo Obuchi’s commission on Japan’s goals in the 21st Century endorsed the creation of an “explicit immigration and permanent residency system.”  Nor are the Japanese alone.  South Korea’s computer industry is plagued by a chronic shortage of skilled workers.  Backed by the South Korean government, Oriental, a major Seoul advertising firm, announced plans on May 25, 2000, to bring in 100 Indian computer experts this year, 1,000 in 2001, and 5,080 in 2002, for jobs at a dozen South Korean companies.  Officials at the South Korea computer industry say the nation faces a shortfall of “hundreds of thousands” of computer experts in the next several years.  A recent editorial in The Korea Herald told its readers what they already knew:  “We are living in an international era in which no individual or country exists in isolation.”

 Any time the United States makes it easier for high-tech workers to come here, all other developed economies lose out and they know it.  That is precisely why the Montreal Gazette just last week spoke of a looming “war of the nerds” and identified immigration as the emerging flashpoint in US Canadian relations:  “It’s replacing softwood lumber, shakes and shingles, salmon and even terrorism as the hot point of contention between Canada and the United States.”

 In a highly competitive marketplace, most high-tech workers will choose the United States over Canada, Germany, Japan or Korea if we give them that choice. The Fortress America crowd would take away the ability of our economy to benefit from such flexibility. This is a conscious decision to reshape American foreign policy in a fundamental way. However, those who want to increase employment-based immigration should be prepared for the consequences.  Whenever the US liberalizes its immigration laws, international tension is likely to increase.  Employers in the developed economies of our natural economic rivals, but traditional political allies, will feel threatened as they find it increasingly difficult to attract and retain qualified employees.  Such economic competition will inevitably seek political expression.  What form this will take shall go far to shape the delicate balance between immigration and geopolitics in the digital age.

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