Labour migration agreements, such as Australia’s PALM Scheme, are often hailed as a win-win—labour access for the migrant-receiving country and remittances for the worker-sending country. As African countries scramble for such deals, it raises the question of whether those programs provide long-term benefits to low- and middle-income countries.
Men and women, sometimes children in hand, often migrate to seek a better life away from unflinching poverty or flee from the unyielding grip of death. In Africa, countries such as Kenya are facilitating emigration by ramping up labour migration deals, sending thousands abroad, to ease economic hardships at home.
While on the surface labour mobility partnerships provide a legal pathway for migrants, there is an underlying trend of African countries pursuing migration agreements as a form of barter trade, with citizens being the commodity. In the case of Kenya, education and labour systems are being calibrated to facilitate labour exportation with the intended goal of remittance growth, despite the adverse effects of exporting human capital.
These agreements involve a legal contract between participating countries, facilitating the movement of their citizens with the goal of labour provision. This arrangement is made possible by labour shortages in some Western countries, as well as a combination of population growth and rising unemployment levels in African countries and the Global South.
It is a peculiar interdependency that overrides the anti-immigration sentiment in Western countries and offers a short-term solution to low and middle-income countries experiencing a burst of unemployed youth. Labour mobility programs may attract minimal publicity and miss the radar of anti-immigrant advocates because most programs, at least those initiated by Australia and negotiated by Kenya, fill labour shortages in low-skilled and semi-skilled industries, such as agriculture, food processing, and social assistance services.
Kenya’s labour export policy
Kenya, an overzealous negotiator of labour export schemes, described its migration agreement with Germany as a win-win—labour for the destination country, opportunities for disgruntled job seekers and remittances in hand. Australia presents the PALM scheme as a triple win, and the International Labour Organization (ILO) describes labour mobility as a win-win-win model for trade and development.
The country is a poster boy for labour migration deals in the region. In September 2024, Kenya signed a migration agreement with Germany to provide a pathway for Kenyan skilled workers to work in Germany. The Kenyan government celebrated the deal but then backtracked after Germany revealed no set figure for annual migration numbers under the agreement.
Kenya’s labour ministry advertises low-skilled employment opportunities abroad and organises recruitment drives for housemaids, labourers, and storekeepers to Gulf countries, including Saudi Arabia and Qatar. It is an emerging trend in Africa.
But are labour mobility agreements a win for the least developed and developing countries?
The Australian Government provides the Pacific Australia Labour Mobility (PALM) scheme, which enables regional and rural Australian employers to recruit temporary workers from 9 Pacific Islands and Timor-Leste. The temporary migrants work on farms, in abattoirs, and in aged care facilities.
The PALM scheme is hailed as a win-win for Australia and source countries, though the scheme presents the risk of modern slavery, according to a report by the Office of the New South Wales (NSW) Anti-Slavery Commissioner. The commission highlighted stories of wage theft, poor living conditions, and gendered violence.
Australia’s Department of Foreign Affairs and Trade (DFAT) champions the scheme as mutually beneficial for Australian employers and workers who send remittances to their home countries.
Indeed, such programs are poverty-alleviating schemes. But whether remittances can contribute to economic development in the long run remains ambiguous. The root cause of migration is primarily poverty, a stain on the Global South. If long-term gains are not an intended outcome, labour mobility programs are cosmetic wins for the least developed countries.
While there is no consensus that remittances impact economic growth in the long term, a study found that remittances’ impact on growth is only significant in countries with low levels of financial development. Remittance flows are not a direct ticket to economic growth, and more incentives, such as investment, are needed to realise growth.
It is a gamble for emerging and developing countries to pursue remittance growth, with labour migration agreements as vehicles, as a long-term growth strategy. To be sure, it is not fully genuine for migrant-receiving countries to depict remittances as the foolproof solution to comparably poor macroeconomic performance in migrant-sending countries. The paradox is that remittances increase the living standards of dependents in source countries. That has been the smokescreen for labour mobility partnerships initiated between low and middle-income countries and developed nations.
Brain drain
Migrant-receiving countries hail labour mobility partnerships as a win because they supply labour amid labour shortages in low-skilled, semi-skilled, and critical industries. Such partnerships are sought against the backdrop of projected population decline in European countries.
Most international migrants move to countries with high and very high Human Development Index (HDI), although many migrants also leave high HDI countries. The largest migration corridor is from developing countries to countries with more developed economies. This trend demonstrates the human capital transfer from less developed nations to wealthy nations. An argument by worker-sending countries such as Kenya is that they have a large youth population, so there is no skill haemorrhage. However, a United Nations Trade and Development (UNCTAD) report pointed out that brain drain remains a key constraint to Kenya’s human capital.
Developing countries lose substantial human capital to the developed world through labour mobility programs and privately planned migration. Therein lies another structural imbalance of such partnerships: more labour for developed countries, less manpower for underdeveloped countries.
How can we achieve a true and time-tested win-win in labour mobility negotiations?
Developing countries would benefit from information and skills in critical industries that fuel the economic success of the West. Developing a mechanism for sharing technological infrastructure, systems, and personnel from industries, such as defence, national security, and engineering, would provide long-term benefits to low and middle-income countries.
The ILO, which published a guide on bilateral labour migration agreements, can help by identifying opportunities for valuable knowledge exchange between countries and incorporate these in its guide.
If we claim mutual benefit in bilateral labour agreements, we must reform the structures that continue to embed the social and economic imbalances of the past. Labour mobility agreements should be a starting point.
Benjamin Opiyo holds a Master of Communication degree from the University of South Australia (UniSA). He is a former president of the African Society Club at UniSA. He sat on the Council of UniSA and is a member of the South Australian Chapter of the Australian Institute of International Affairs.
Benjamin is a global citizen passionate about Africa’s engagement in the international system.
