Emerging or catching-up economies are eager to fill their skill gaps. That is why they have been working on competitive migration policies which only complement developments such as attractive conditions for outsourcing; well developed higher education systems or ongoing efforts to improve them; growing industries; investments in IT and English language training.
Here is an overview of the latest economic advances, skills shortages and immigrant inflows in the most developed Latin American economies other than Brazil - Argentina, Chile and Mexico.
Argentina
The article Latin America: Where the World’s Jobs Are published by the Christian Science Monitor observes that Latin America appeals to those who start their careers but also to those who want to progress faster or switch careers. Foreigners who moved there for work indicate as reasons the opportunity of a change and the experience of a new culture. The article quotes a young British who went to Argentina to do an internship with an investment bank:
“Compared to Europe, where everything is slowing down, South America seems to be doing the complete opposite”Argentina is the second biggest and the second most visited South American country after Brazil. From a regional perspective, its literacy is the highest (97 %) and its higher education system is claimed to be the most developed.
Due to the fact that almost all of the country’s population are European descendants, mainly from Spain and Italy, it is not surprising that more Southern Europeans have arrived there in the recent years.
In an article - just one of the series Europe: Migration after the Crash, the Guardian presents an overview of the visa regulations in selected countries. It is claimed that contrary to other countries, visas in Argentina are easy to obtain, especially by EU citizens. Upon arrival, the latter are automatically given a free 90-day tourist visa which can be renewed. Once immigrants find a job, they must go to the migration department with a letter from their employer in order to get a work visa.
Although entry and application are easy, both the Guardian and Nearshore Americas claim that bureaucracy in Argentina may cause a delay – the process of issuing a visa can take up to several months.
In another article of the same series - Young Europeans Flock to Argentina for Job Opportunities - the Guardian states that while Europeans come to Argentina mainly as students or tourists, figures for official residency permits have doubled in the past five years to 2,000 for 2011. The real number of new residents is much higher with Spaniards being the most numerous, followed by Italians, French, Germans and British.
A recent article by Gayle Allard revealed some statistics about the Spanish diaspora abroad. The author quotes data from the Electoral Census of Spaniards Living Abroad – Argentina is the leading host country with over 332,000 Spaniards registered by 2011.
It is a little known fact that in 2010 Argentina had more foreign tourists than Brazil - 5.325 vs. 5.161 or an increase of 24 % over 2009. Although the reverse trend happened only in 2010, it is explained by the growth in tourism since 2003: arrivals in Argentina grew by 83% from 2000 to 2010 compared to the stagnation of Brazil (2.6 % fewer passengers in the same period). In fact, to a large extent tourists from Brazil and other neighbouring countries contributed but tourists from Spain increased by 15 % over the previous year.
Since there are links between tourism and migration, it is likely that for some tourists the experience could have weighed in the decision making process for migration. Tourism is also closely related with language courses in Argentina - some agencies offer courses in Buenos Aires and Uruguay or Chile. The official Argentine website addressed to international students claims that the number of students learning Spanish in Argentina increased from 17,000 to 25,000 only in the period 2006-07.
Similarly to labour migrants, students can also come as tourists and then apply for a student permit in Argentina as long as they provide a proof that they have been accepted by a local accredited university or language school. Argentina is attracting students thanks to its quality of education and affordable cost of living.
International students at the Universidad Abierta Interamericana reached 1100: an increase by 900 % for the period 2008-2011. Apart from students from South and North American countries, there were students from Poland, Russia, Ukraine, Uzbekistan, China, Korea, Angola and Haiti.
Chile
With a population of 17 million people, Chile cannot compare with markets such as Brazil, Mexico and Argentina. But Chile stands out from the rest of Latin America because of strong economic indicators such as low corruption, transparent government, high human development index and reputation for stable financial institutions. According to the 2011 Forbes ranking, Chile was among the top 25 best countries for doing business, ahead of Spain, Korea and Japan.
Chile can also compensate for its relatively small market by joining regional organizations. Chile, Colombia and Peru signed the MILA (Latin American Integrated Market) to consolidate their stock markets and thus became the third biggest market in the region in terms of trading volume, after Brazil and Mexico.
The other important initiative is the visa-free agreement between Mexico, Peru, Chile and Colombia, also known as the Pacific Alliance, which will be finalized in June 2012. The four countries represent one third of Latin America’s GDP and more than half of the foreign trade of the region (exports equal to $438 billion). The aim of the organization which will assure the free movement of capital, goods and people, is to be a gateway for trade with Mercosur (the Southern Common Market between Brazil, Argentina, Uruguay and Paraguay) as well as with Asia.
It fact, trade ties with Asia deepened over the last years – according to Corfo, the Chilean Economic Development Agency, in 2011 Korea, Japan and China appeared among the 10 main economies interested to invest in the country and the mining industry accounts for 70 % of Chile’s foreign investments.
In 2010, when Europeans economies contracted and Brazil had a lower growth rate, FDI in Chile increased by 43% - the region’s third biggest growth.
Some of the advantages of Chile as an outsourcing destination are the low corporate taxes, its pool of 75,000 people employed in IT and the fast processing of visas – foreign managers who operate in Chile claim that work permits are processed within a week. The English proficiency of Chile’s technical graduates was perceived as a problem - therefore Corfo has provided 8,000 scholarships in the period 2008-2010.
Given the above initiatives and the economic growth, it is not surprising that Chile is an emerging destination for skilled immigrants, both business and independent ones. Although it is impossible to estimate the exact number of Spaniards living in Chile due to registration at the consulate being voluntary, El Mostador reported that 48,031 Spaniards were registered at the Spanish consulate by 2011 - 4,000 more than the previous year. However, the increase was also due to the Law of Historic Memory which granted Spanish nationality to descendants of Spanish emigrants. At the same time, there was an increase in new arrivals - 464 work visas were granted to Spanish citizens who obtained employment contracts in the period January-October 2011, compared with 388 in 2010.
The Ministry of the Interior of Chile announced that 168,000 workers from 138 countries received work visas in the period 2007-2011. Most foreigners were hired by technology, mining and energy companies. Although Peru received the biggest number of visas, those by the OECD countries increased by 92 %. In 2011, citizens of the US and Spain received 779 and 586 work visas, respectively.
According to Chile’s Secretary of Labour, there are shortages in mining, construction and agriculture, and professionals (in addition to workers) are needed in the first two sectors. A deficit of 23,000 mining engineers alone and 69,000 mining professionals was expected by 2015.
In the decade 2000-2010 Chile experienced a large growth in both foreign students and immigrants. Mercopress reported that Chile’s immigrant population has had the fastest growth in South America – a growth of 64 % from 2000 to 2009, or 290,900 people; and that foreign students on exchange programs at the Pontificia Universidad Católica increased from 22 in the 1990s to 1,400 in 2011 and more than half of them were Americans.
The most popular work visa for independent labour immigrants is the subject-to-contract visa. Workers can apply while being on a tourist visa – as in Argentina, the tourist visa is issued for 90 days and can be renewed. The most important requirement is to present an employment contract from a local company for a maximum of two years. After having worked for two years on such contracts, immigrants are entitled to permanent residency, and in another five years to naturalization. Foreign students can apply for a visa for a maximum duration of one year and then they can renew it. Workers’ and students’ dependents also receive the same visa but are not authorized to work. The visa procedures are explained in the article Visa Requirements for Your Stay in Chile published on the official portal This Is Chile.
However, Chile appeared in the world headlines thanks to the Start-Up Chile – an entrepreneurial program backed by the Government which encourages both local and foreign entrepreneurs to realize their business plans in Chile. The aim of the program is to bring 1000 companies by 2014 and thus to turn Chile into an innovation hub in Latin America.
Applicants are evaluated by Silicon Valley experts and a Chilean Innovation board. The selected ones should work in Chile for a minimum of six months; they receive a US$40,000 grant, a one-year work visa, office space and access to Start-Up Chile’s network of global contacts.
Between 15 and 20 % of the first 84 companies have decided to stay in Chile while others who expressed an interest couldn’t find investors and had to leave.
Mexico
Despite security concerns, Mexico has managed to attract an increasing number of tourists, students and US investments via outsourcing. Chile and Mexico are the only Latin American countries members of the OECD, and NAFTA has positively influenced the development of the Mexican economy.
But Mexico’s economy has its own drivers – it is the world’s seventh largest oil producer, the 10th most visited country, its middle class is growing and educational attainment has improved - trends similar to the ones of Brazil.
Mexico may compete with Brazil not only based on the size of economies and labour force but on the investments in the IT sector – just where Brazil’s acute skills shortage is. The proximity to the US and the fact that Mexico has the biggest number of English-speaking professionals in Latin America led US IT firms to open branches there. According to Nearshore Americas, Mexico graduates around 65,000 IT professionals pa and has an IT labor pool of around 600,000 people compared to 250,000 in Brazil, the second largest market, and 70,000 and 20,000 in Argentina and Chile.
The increase in the number of immigrants to Mexico is a sign that there were economic opportunities. The number of foreign-born people in Mexico in 2010 rose by 100 % compared to ten years ago. The 961,000 foreign-born represent 0.9 % of the population and 77 % of them are American citizens – including children born to Mexican parents - but there were more immigrants from many countries in Southern and Central America, Canada as well as some European ones such as Germany, France and Italy.
Although there were more men than women among French, Spanish and German immigrants, the case of Italian immigrants stands out – the sex ratio of 199 means that there were two men for every woman, i.e. these are most probably self-employed or business migrants, or migrants working in fields in which women are underrepresented (e.g. managerial positions in transport and tourism). In 2009 the Italian consul in Playa del Carmen acknowledged that the Italian community in the Riviera Maya alone accounts for 10,000 people, 50 % of whom are on temporary permits – working or studying in the area.
Tourism is Mexico’s third industry and the direct and indirect effects it might have on other sectors are important. In the case of Italians, the tourism-migration nexus has worked – Italians came first as tourists but then decided to stay and started their own businesses. Tourism has also had a positive effect on retiree migration and medical tourism, mainly from the US. Over 25,000 American retirees settled in Mexico while medical services affect 1 million people from California p.a. as a result of some Mexican hospitals being affiliated with American institutions.
With more than 22 million tourists, Mexico was the world’s 10th most visited country in 2010 but the Mexican president was determined to bring it to number 5 by 2018 by improving the tourism infrastructure, including more flights to the resorts which attract students throughout the year. American tourists decreased by 4 % in 2011 but the year marked an all-time record of international tourists and an increase of 2 % over 2010.
In order to boost and diversify tourism, in 2009 Mexico introduced online tourism and business visas for citizens of Russia, Ukraine and Brazil traveling to Mexico by air while no tourism visa was required from citizens of the US, the UK, Japan and the Schengen Area. As a result, in 2011 there was a significant growth in the number of tourists from Brazil (up 66 %) and Russia (up 55 %).
In addition, tourism might have an impact on prospective incoming students. The Universidad Nacional Autónoma de México (UNAM) emphasizes on the fact that its campus is a UNESCO heritage site. At the same time, it is the only Latin American university among the world top 400 universities for 2011 ranked by Times Higher Education and it scores as high as the University of Sao Paulo in other rankings.
Apart from regular exchange and degree programs, some Mexican universities offer international students short study and internship programs which have a cultural and language component, thus being a bridge between tourism and education supply. For example, various short programs are offered by the Tecnologico de Monterrey – Mexico’s most prestigious private university. Even when in the fall of 2010 violence was a threat to the flow of people, there was a decrease of American but not of European students, and overall 4,000 foreign students were enrolled at its 33 campuses.
A recent report on the internationalization of Mexican higher education reveals that the University of Monterrey has created liaison offices in some countries abroad, e. g. Canada, in order to recruit local students and faculty; and that some private Mexican universities were accredited by U.S. or international agencies while others became part of international networks.
The latest statistics of the Institute of International Education on international students in Mexico are available for 2007 – 2,880 students were enrolled and the top origin countries were the US, France, Canada, Spain and Germany. While numbers were not significant (but they were also incomplete), some experts believe that prospects are good.
Mr. Lloyd, the founder of Intern Latin America (a company which offers all-inclusive internships and which started thanks to the Start-Up Chile) was convinced that Brazil and Mexico would be attractive:
“We see Brazil and Mexico as two definite places to be… The economic rise of Brazil makes it an obvious choice, and Mexico has a pioneer-feel to it. Mexico is going through a somewhat difficult time with the security situation but it would be highly attractive for a young, ambitious student.”
The Pie News recently wrote about the possibility of academic mobility between Mexico and Peru in the framework of the visa-free agreement (the Pacific Alliance). While currently visas are free of charge, the Mexican government is aware that any further facilitation should be implemented carefully, having in mind that Mexico is a transit country in proximity to the US.
According to the article, reactions were not reciprocated - while Peruvians expressed the opinion that students from their country would love to go to Mexico and the language would not be an obstacle which would accelerate procedures, a Mexican agent said that Mexican students would prefer Chile and Argentina.
At the Pacific Alliance presidential meeting held last December in Merida, the Mexican president announced that in the first stage business visas for 10 years will be issued free of charge. Regional integration will certainly facilitate academic mobility. Thus, unless security causes problems, Mexico could capitalize on human capital thanks to US outsourcing and incoming Latin American students. Regional academic mobility may be a step toward a more diverse and global one.
While it became clear that Brazil is working on its skilled immigration policy, it is not the only country in Latin America where skilled migrants would like to go. Argentina and Chile are competing with Brazil not only for Spanish-speaking but also for other foreign professionals because obtaining a visa is much easier. At the same time, Chile is attracting investors and entrepreneurs while Mexico has the biggest pool of IT talent and English-speaking professionals in Latin America. Finally, Argentina and Mexico are trying to position themselves as preferred destinations for tourism and student mobility in the region and beyond.
While skilled migration to the leading LatAm economies may result in brain circulation and return for some migrants from the same region, it is wishful thinking to believe that many of the young highly skilled Europeans who settled in the Americas will return. The younger the people and the greater the distance, the less likely the return. Thus, while immigrants and emerging economies are gaining, Europe seems to be the only loser.
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