Category: Africa

Will more than 1 million refugees and migrants arrive in Europe by sea in 2016? (update)

@redacted writes in response to an earlier post:

The physical constraints imposed by the actual watercraft that are required for various routes need to be considered. Longer distances require more substantial (expensive) boats. Rubber dinghies, more or less “disposable,” and suitable for the Turkey-Greek Aegean route, won’t suffice for Libya to Sicily runs, will they? Beside the logistics and manpower involved in transiting the middle of the Mediterranean, smugglers would be losing valuable (and difficult to replace) watercraft assets via confiscation of vessels.

Of course, @redacted is quite right. Smugglers need both labor and capital to get refugees and migrants to Europe. That said, seaworthy craft are relatively easy to acquire on the white market. Hell, you can even buy them on eBay. Okay, don’t take that too seriously. But the labor part of the equation would be, I believe, much harder to solve in the short run than the capital problem, and that’s why I focused on it above.

Of course, what I just said, assumes that [1] the smugglers (Should I call them “Coyotajes”?) would be able to pass these costs on to their customers, and [2] that the customers would be able to pay these costs. I’m pretty sure [1] is correct since this is a clandestine black market transaction, and as a result there wouldn’t be a lot of open price competition. (I lived in Colorado before the new pot laws took effect, and I used to see signs that said “$25/for an Eighth” in some seedy shop windows, but that was pretty rare.)

I’m confident, though not certain, about [2]. There’s _some_ reason to believe that refugees and migrants coming from Syria, Iraq, and Afghanistan would have more wealth than those coming from the countries that are currently taking the north Africa-Italy route. Approximate GDP/capita –> Nigeria=$6,000, Gambia=$1,800, Senegal=$2,300, Guinea=$1,200, Ivory Coast=$3,000, Somalia=$600 (not a misprint: $600), Mali=$1,700. In contrast, Syrian GDP/capita was about $5,000 before the war began. Iraqi GDP/capita is about 3 times larger. While Afghan GDP/capita lags well behind both Syria and Iraq at about $2000, it is still higher than that of Gambia, Guinea, Somalia, and Mali.

Obviously, GDP/capita is a very, very crude measure of the expected wealth of people who are fleeing for their lives from their war ravaged homes. And it doesn’t take into consideration, for example, the considerable expenses involved with the longer overland passage to North Africa. But reports of, e.g., middle class (by the standards of their situation) Syrians being among the refugees have been common for some time[1][2]. And the reports[3][4] about the absolutely disgraceful practice by some European states of confiscating the wealth of refugees presupposes that they have wealth worth confiscating. One might add to this the fact that at least some bourgeoisie migrants and refugees[5] bring with them professional skills that can be used to generate wealth too. A doctor, nurse, engineer, car mechanic, skilled machinist, etc. would be in a better position to earn a buck than someone from a much poorer country who wasn’t lucky enough to have this kind of training.

So, yeah, I guess I do think that there’s a good chance that if refugees and migrants coming from Syria, Iraq, and Afghanistan make it to North Africa, some – perhaps even most – will be able to pay higher prices to the human smugglers in order to cover the cost of the capital involved. But not all. And that’s even more reason to think that we’ll see fewer than 1,000,000 refugees and migrants arrive by sea in Europe this year.

NB: GDP/capita numbers taken from the IMF, CIA, and World Bank via https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

[1] http://www.ibtimes.com/europe-refugee-crisis-facts-wealthy-educated-syrians-risking-lives-leave-war-2089018

[2] http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10450787/Rich-refugees-pay-thousands-to-flee-war-torn-Syria-in-luxury.html

[3] https://www.rt.com/news/329736-germany-denmark-refugees-confiscate/

[4] http://www.theguardian.com/world/2016/jan/26/danish-parliament-approves-plan-to-seize-assets-from-refugees

[5] http://america.aljazeera.com/articles/2015/10/2/syrias-battered-middle-class-hopes-for-a-fresh-start-in-germany.html

Will more than 1 million refugees and migrants arrive in Europe by sea in 2016? (update)

There’s strong evidence that the EU’s (ham-fisted and ill-considered) attempts to reduce the inflow of migrants and refugees is working. During the period of April 1-15, less than 8,000 migrants and refugees have arrived on Europe’s shores. That’s about half of what we saw last year during this same period[1]. As @Anneinak, @dkc, and @Milosz (as well as others) have pointed out, migrants and refugees are already seeking out other routes – especially Libya-Italy – in place of Turkey-Greece. But it is in no way clear that these alternative routes will support that average of 100,000 migrants and refugees/month for the rest of the year that would be necessary to reach 1,000,000 sea-borne arrivals that is the subject of this question. At the moment, the “human smuggling infrastructure” (I’m sorry, but I can’t recall from whom I’ve borrowed that phrase) does not appear to be in place to move so many people. That might change in the long-run, but I have some doubts about it doing so before 2016 ends. All that said, caution is warranted. Most of the inflow of migrants and refugees to Europe occurs during the last 4 months of the year. So there’s a very real possibility of reaching a million, but right now I don’t think that possibility can be much more than 2-to-1 against.

Let me add a little perspective. Almost four months into 2016, less than 25,000 migrants and refugees have arrived on Italian shores (mostly Sicilian shores, to be precise). So (assuming that seaborne arrivals via the Turkey-Greece route fall to about 10% of 2015 numbers), you’d have to see about a twenty-fold increase of migrants and refugees coming from North Africa to get close to 1,000,000 total. I doubt that that kind of increase is likely during the next 8 months.

Why? Well, here’s the a priori case: Smuggling isn’t easy. Generally, it’s a reprehensible line of work, but clandestinely getting people across the Mediterranean Sea from North Africa to Sicily, landing these folks on the coast, and then skedaddling it back home to do it all again involves a lot of skill. It’s not as if fishmongers and waiters are going to enter the smuggling market. Nor is it likely that smugglers could hire qualified people to do this work on short notice.

To repeat, that’s just the a priori case. Maybe there are facts on the ground that make this easier than I’m imagining. Tell me if I’m wrong! Along these lines, in an intriguing comment, @Milosz suggests that ISIS in Libya might get into the smuggling game. Quite right, but I suspect it would take them some time to ramp up production (as it were), and that means ISIS (or a similar jihadist group) would be unlikely to have a decisive affect on whether we’ll see 1,000,000 seaborne arrivals this year.

Four brief points: First, Syria is much closer to Turkey than it is to Egypt, Libya, and Tunisia (which are the major points of embarkation to Italy). Trust me on this, even though I’m an American; I looked this up on a map and everything. Anyway, getting from Syria to Tunisia will take a lot of time, and that means (once again) less relevance for the number of seaborne refugees and migrants in 2016.

Second, if I’m reading the data right, at least 96% of the seaborne refugees and migrants who’ve arrived in Italy this year were themselves African. Nigerians, for instance, have been the most numerous. There just doesn’t seem to be a history of Syrians, Iraqis, and Afghans making their way across north Africa in order to make it to Europe, and that means (I think) a lot of informal barriers to travel. (Think of the time you went on vacation where people weren’t used to folks from your country – it’s much harder and slower to get around.)

Third, though arrivals in Italy were 4 times higher in March 2016 than in March 2015, the pace has slowed a lot since then. There were more than 16,000 arrivals in Italy during March 2015, but there have been less than 6,000 halfway through April 2016. So perhaps we’re not seeing the uptick that I expected when I thought about a few weeks ago.

Fourth, while the overall flow of seaborne refugees and migrants peaked during November of 2015, the peak of the north Africa-Italy route was already falling fast in September of 2015. Let’s assume (as seems reasonable) that these ebbs and flows are a result of seasonal weather conditions. If so, we’re likely to have a pretty good guess about how many seaborne refugees and migrants will arrive in Europe via this route long before the end of the year[2].

[1] http://data.unhcr.org/mediterranean/regional.php
[2] http://data.unhcr.org/mediterranean/country.php?id=105

Will Moody’s downgrade South Africa’s government issuer rating to B or below before 1 April 2016? (update)

“Moody’s Investors Service has placed South Africa’s Baa2 bond and issuer ratings on review for downgrade”[1] according to multiple sources[2][3]. But no one is talking about downgrading South Africa multiple levels. So I’ll stick with a 1% chance of this happening, though I think the correct number is some fraction of 1.

[1] http://allafrica.com/stories/201603090325.html

[2] http://www.bloomberg.com/news/articles/2016-03-09/south-africa-s-gordhan-seeks-to-appease-investors-on-economy

[3] http://af.reuters.com/article/investingNews/idAFKCN0WB0U5

Will Moody’s downgrade South Africa’s government issuer rating to B or below before 1 April 2016? (update)

The economic news out of South Africa is unremittingly bad: 25% unemployment, less than 1% expected GDP growth for 2016, public debt as a percentage of GDP nearing 50%, a 10% drop in the rand’s value since December, etc.[1]. The current South African Finance Minister, Pravin Gordhan, has gone so far as to describe his country as being in a “crisis”[2]. However, “Moody’s Investor Service said on Wednesday Finance Minister Pravin Gordhan’s planned tax increases in his 2016 Budget Speech were well targeted, given the weak economic backdrop”[3]. Clearly, Moody’s is not jumping for joy about the situation in South Africa: “South Africa’s budget aims to quickly consolidate spending by cutting a large public sector wage bill, but has not identified specific revenue measures to achieve smaller deficits, Moody’s said on Wednesday”[4], and it seems very hard to avoid the conclusion that Moody’s will downgrade South Africa at least one level. But a 4 level drop doesn’t seem to be in the cards, as far as I can see. 1% probability at best.

[1] http://www.weforum.org/agenda/2016/02/can-south-africa-avoid-another-credit-rating-downgrade

[2] http://www.bbc.com/news/business-35650701

[3] http://allafrica.com/stories/201602250881.html

[4] http://www.reuters.com/article/safrica-budget-moodys-idUSL8N163505

How many Eritrean citizens will apply for asylum in Europe for the first time in the first quarter of 2016? (update)

I’m just slightly modifying my forecast on word that “Eritrea is not prepared to stop forcing its youth into lengthy stretches of work as soldiers and civil servants, a conscription policy that is driving waves of refugees to make the perilous trip across the Sahara desert and Mediterranean Sea to Europe”[1]. @cdob63 and others mention that this article reports that “Each month as many as 5,000 people flee Eritrea according to U.N. figures.” Good find, but the number of Eritrean migrants who try to come to Europe varies seasonally (probably because of difficulties crossing the Mediterranean during poor weather and in less than fully sea-worthy vessels), and last year it was at its lowest during Q1. So I think the number is much more likely to be south of 10,000.

  • 94% Less than 10,000
  • 5% Between 10,000 and 15,000, inclusive
  • 1% More than 15,000

[1] http://www.reuters.com/article/us-eritrea-politics-insight-idUSKCN0VY0M5

Will Moody’s downgrade South Africa’s government issuer rating to B or below before 1 April 2016? (update)

No change in my forecast but it’s worth noting that South Africa _does_ seem to be following through on its promises to do everything is can to prevent a significant downgrade from the ratings agencies[1]. When does it become safe to say that there’s a zero percent likelihood that Moody’s will drop South Africa a full 4 grades?

[1] http://www.reuters.com/article/safrica-budget-idUSL8N16331Z

Will Moody’s downgrade South Africa’s government issuer rating to B or below before 1 April 2016? (update)

I’m sticking with my original forecast (1%) because a 4 grade drop seems so unlikely, but the probability of a significant drop does seem considerable.

Money is pouring out at a record pace as inflows dwindle. The rand has plunged and unemployment is the highest among almost 40 developing nations tracked by Bloomberg. Drought is driving up food costs. Hanging in the balance is the investment-grade credit rating South Africa sweated to achieve in 2000, shortly after Mandela left office.[1]

Tough times.

[1] http://www.bloomberg.com/news/articles/2016-02-21/tipping-point-looms-for-south-africa-as-economy-s-despair-grows