Country Interdependence

Geography: Edexcel A Level, topic 4.4.3

Interdependence between Countries

Elite migration and low-wage economic migration both increase the interdependence between countries and their economies.

If there is a recession in one country, it will have a knock-on impact on the economy of the other country and vice versa.
If the construction industry in the UAE suffers, then there may be a fall in demand for low skilled migrants. Some Indian construction workers who planned to work in the UAE may no longer be able to go there.

Migrants often send remittances (money) to their families at home.
In 2016, an estimated $12.5 billion in remittances was sent home from the UAE to India.
Remittances make the Indian economy dependent on the economy of the UAE. A recession of decline in economic growth in the UAE would cause a fall in remittances being sent to India.

The source location is the country that the migrant has come from. The host location is the country to which the migrant has travelled.

Large-scale migration can put a strain on the host location's housing and services (schools and healthcare).
Some people argue this has happened in the UK since 2004 when European migrants started arriving from the A8 countries.

An increase in workers willing to work for lower wages and do low-skilled work is an example of an economic benefit to the host location. In Dubai, 80% of the construction workforce are migrants from another country.
Migration can help to rebalance a population and reduce the impacts of an ageing population by increasing the tax base. This is particularly key in Western European countries such as Germany.

The source location may suffer from brain-drain and a skill shortage if a large number of skilled migrants leave the country. This would be an economic cost to the source location.
This brain drain happened in Poland following their accession to the EU, which enabled their population to freely migrate to the UK.
Migrants may send remittances back to their families in source locations. These payments should benefit the local economy in source locations.

What can a recession in one country lead to in another country?
Remittances and Interdependence
What can the source location suffer from if a large number of skilled migrants leave the country?
Which group of countries provided lots of European migrants to the UK after 2004?
Which nation suffered from 'brain drain' after joining the EU?