How Emigration Can Lift Developing Countries
Development models based on industrialisation and export are a thing of the past. In future, strategies for the migration of labor are required - which benefit both countries of origin and high income destination countries.
All views expressed in the Welternährung are those of the authors and do not necessarily reflect the view or policies of the editorial board or of Welthungerhilfe.
Kemal Şahin was born in Konya, Turkey. In 1973 he arrived in Germany on a scholarship to study metallurgical engineering at RWTH Aachen University. After graduating, he scraped together 5,000 Deutschmarks and started importing Turkish textiles. Within two decades, that import shop had become Şahinler Holding, Turkey's largest fashion and integrated textile group, with 27 production facilities, stores in 15 countries, and around 50 million customers worldwide.
Şahin used his German base to build something Turkey needed: industrial-scale manufacturing infrastructure. His firm became the founder-operator of the European Free Zone in Edirne, one of Turkey's largest private-sector industrial projects. The zone now hosts roughly 200 companies, employs more than 8,000 people, and processes over $3.5 billion in trade each year.
Again, Mustafa Baklan came to Germany in 1972 and his family opened its first supermarket in Mannheim fourteen years later. Subsequently, they built their own food production and wholesale operation back in Turkey and shipped to Mannheim and beyond. That company, now called Suntat, supplies supermarket chains across Europe and reaches roughly 50 countries worldwide with about 1,200 different products from Turkey. The headquarters remain in Mannheim, where Baklan’s father once worked as a guest worker.
Baklan and Şahin demonstrate the power of migration to transform lives and create value – for migrants, for the countries they move to and for the countries they started in. Their example – and there are many more examples like them – points toward a new pathway for global development.
New recipes are needed
For half a century, the recipe for countries to get rich quick has looked the same: build factories, hire cheap workers, export to the world, climb the value chain. South Korea, Taiwan and China all did it. For most of the late twentieth century, manufacturing-export-led growth was the dominant path out of poverty for large developing countries.
That recipe is getting harder to follow. Global manufacturing employment is forecast to be roughly 65 million jobs smaller in 2050 than today, as automation reduces labor demand and an aging global population slows demand for goods. And cheap labor is no longer the advantage it was: today's factory jobs demand skills, capital, and just-in-time logistics systems.
But another recipe is emerging. In 2008, the working-age population of high-income countries was growing by about six million people a year. Today it is shrinking by roughly two million a year. Add upper-middle-income countries to the picture and that decline reaches around ten million a year by the 2030s. Germany needs nurses. Japan needs construction workers. Italy needs farmhands.
This is the first time in modern history that the rich world as a whole is losing workers. And it points to a different growth strategy for developing countries – one built not on shipping containers full of t-shirts, but on sending people, building skills, and forging the trade, investment, and knowledge ties that follow them. It is not a recipe built purely on numbers, but on where emigrants go, what knowledge and connections they gain, and what they do with that human and social capital for their origin countries.
For well over a century, migrants have helped improve lives in the countries that they left behind. In Lebanon, Tajikistan, Honduras, and Nepal, remittances now account for more than a fifth of national income. Across all low- and middle-income countries combined, they make up about a third of capital inflows. For 37 percent of countries in the World Bank's data, remittances as a share of GDP are larger than manufactured exports. In Nepal, climbing remittance flows may have accounted for as much as 40 percent of the decline in poverty between 2001 and 2011.
The Philippines Economic Mystery
But the relationship between emigration and origin country economic growth – as opposed to poverty reduction – is contingent. A bigger emigrant population does not automatically produce a richer country. The Philippines now has roughly one in ten of its citizens working abroad. It is also a country whose growth has long lagged its East Asian neighbors – what economists call the "Philippines Economic Mystery." Sheer numbers, on their own, are not enough to turn emigration into transformation.
For emigration to have an impact on growth, it has to support structural change. Not least, many Filipino returnees brought back skills that did not match domestic opportunities and, regardless, the domestic economy was in little shape to exploit their entrepreneurial talent.
India is a counter-example. Tens of thousands of Indian engineers went to Silicon Valley in the 1990s. When the U.S. capped visas, many potential migrants stayed in India and used what they had learned to build an IT software industry that eventually surpassed the United States in IT exports – building on the contacts, knowhow, and investment of the diaspora community in Silicon Valley alongside numerous returnees. Bangladesh's garment industry has a similar origin: Bangladeshi workers went to South Korea, learned how a modern garment factory runs, and came home with the know-how and capital connections to build one.
These are not rare examples. Across countries, a stock of skilled emigrants working abroad in a country that exports a particular product is associated with an increased chance that the home country will start exporting that good. Konrad Burchardi, Thomas Chaney, and Tarek Hassan examined U.S. counties and found that the more residents a county has with ancestry from a particular country, the more investment it both sends to and receives from that country.
Brain Drain or Brain Gain?
Of course, ‘brain drain’ is a real concern, perhaps especially for small island economies that frequently see a very large proportion of their graduates working abroad. On the other hand, even in those cases, migration brings sizeable benefits. A 2025 study tracking the highest-performing high-school students from Tonga, Micronesia, Papua New Guinea, Ghana, and New Zealand suggests migrants in that group ended up earning $40,000 to $75,000 more per year than they would have at home, sent back $2,000 to $7,000 in remittances, and generated trade and investment effects of similar value. That is brain gain, not brain drain.
Or look at Eastern Europe. Emigration of high-skilled workers from the countries that joined the EU in 2004 worried economists at the time. But fifteen years later those countries had roughly doubled their GDP per capita, and the wage gap with Germany shrank dramatically. The average Romanian worker earned 64 percent less than the average German in 2008, but only 51 percent less by 2018.
The countries on the receiving end of migration also gain – economically, fiscally, and through innovation – far more than the headlines about immigrant "burdens" suggest. At the lower-skilled end, they do jobs locals won’t do. But immigrants are also a massive source of entrepreneurial drive. Immigrants or their children founded 44 percent of Fortune 500 firms, including Apple, Levi's, and Google. They are 80 percent more likely than natives to start businesses in the US, and they account for 25 percent of new firms while making up only 14 percent of the population. Although immigrants make up only 16 percent of U.S. inventors, they account for 36 percent of patented inventions – 23 percent directly, another 13 percent through collaborations that make their native-born colleagues more productive. When firms unexpectedly lose immigrant colleagues, native innovation actually falls.
The fiscal arithmetic also works. Each immigrant in the United States makes a lifetime contribution of $259,000 to public coffers in present-value terms. Even unauthorized immigrants pay roughly 26 percent of their income in taxes, totaling close to $100 billion in 2022.
Demand for migrants will increase
But on top of that, receiving countries need people to replace retirees as their working age populations decline. Merely keeping the working-age share of high-income populations steady would require migrants equal to about half a percent of the total population of those countries every year – roughly 200 million additional working-age migrants over thirty years. Demand for migrants is forecast to outstrip supply by more than 30 million people by 2050.
That is why while politicians in many destination countries continue to campaign against immigration, those same politicians are quietly increasing visa quotas, easing language requirements, and shopping internationally for nurses, plumbers, and IT specialists.
For developing countries, this is a moment to design a migration strategy as deliberately as Korea once designed export promotion. Bilateral labor agreements increase migration flows by roughly 76 percent – they are amongst the most straightforward policy levers for emigration as a growth strategy. The Senegal–Spain agreements of 2006 and 2007, which channeled 4,700 Senegalese workers into legal jobs on Spanish farms and fishing boats, are one example. But most likely to support origin country transformation is skilled migration to high-productivity countries, with circular movement, formal channels, and a domestic environment back home that makes the returning skills usable. That goes far beyond a simple labor agreement and calls for broader government strategy.
Protecting workers in foreign countries
Origin countries should tailor university curricula to skills the rich world needs and negotiate bilateral skills partnerships in which destination countries fund the training. They should lower passport fees and remittance taxes and allow dual citizenship. They should build agencies that protect workers abroad (like the Philippines’ Overseas Workers Welfare Administration), and channel their savings into productive investment at home. When Salvadoran migrants were offered matching funds for educational remittances, for example, it led to considerably increased educational expenditures. And they should strengthen the investment climate so that returning migrants – and migrant-owned firms abroad like those of Baktat or Şahinler – actually want to invest in growth industries.
Destination countries can help meet their own needs and improve origin country growth prospects as well. More than 50,000 Indian students were enrolled at German universities in 2024, drawn in part by the fact that German public university education is free regardless of citizenship, for example. And regarding circular migration, since 2019, Germany's Migration & Diaspora programme, run by the Federal Ministry for Economic Cooperation and Development (BMZ), has helped more than 970 employers in BMZ partner countries hire returnees through its "Returning Experts" program. The complementary Business Ideas for Development scheme has supported about 700 prospective founders launching companies in their countries of origin.
The European Free Zone in Edirne did not happen because Turkey wrote an emigration plan in 1973. It happened because a young engineer won a scholarship, kept his ties back home, and had a good idea that benefited his origin and destination country alike. But the point of an emigration-led growth strategy is to make that kind of serendipity more common – to turn the Şahins and Baklans from accidents of biography into a feature of policy.
The old playbook of factories-and-exports is not closing entirely; it can run in parallel with an emigration-based strategy. But for many developing countries – especially those too small or too remote for manufacturing-export miracles – the next quarter-century of growth is more likely to be written in the language of people moving than of goods moving. The countries that build the institutions to make that work will reap huge rewards.
