It’s not xenophobia
Posted August 24, 2010on:
Cross-border mobility of capital and labor between economic equals poses few problems and offers many benefits but that kind of economic integration is not possible between grossly unequal economies. Although a controlled flow of labor from the poor country may have economic benefits for the rich country, it must strictly control labor flow from the poor country to prevent its high value labor market and social institutions from being overwhelmed by a large number of workers seeking higher wages. Similarly, even though the poor country needs capital investment from the rich country, it must control its flow and extent to keep its relatively tiny asset market from being overwhelmed by the relatively huge money supply of the rich country. Both of these concerns are motivated by economic stability issues and neither may be described as xenophobia. It is not reasonable to expect these countries to have either reciprocal labor flow agreements or reciprocal capital flow agreements.