By Kalyeena Makortoff (photo)*
Rich countries should prepare for levels of mass migration like those hitting Europe, but it could be the key to global economic growth, a report by the World Bank and International Monetary Fund says.
Inequality will continue to drive migrants toward developing states, the report explains, but these flows have the potential to reverse demographic imbalances, boost prosperity and ultimately end extreme poverty, according to Development Goals in an Era of Demographic Change, released in Peru at the start of the annual meetings of the World Bank and the IMF.
Refugees and migrants disembark from the passenger ship "Tera Jet", following their trip from the island of Lesbos to the port of Piraeus, near Athens, Greece September 1, 2015. The International Organization for Migration (IOM) says 1,500-2,000 are taking the route through Greece, Macedonia and Serbia to Hungary every day and that there is "a real possibility" the flow could rise to 3,000 daily.
While developed countries face shrinking and aging populations, low-income states aren't able to provide enough quality work for their own working-age citizens, who can be held back further by regional conflict and state fragility. With about 74 percent of international migrants between the ages of 20 to 64 according to United Nations and official European statistics, freer cross-border migration can help stabilize economies across the globe, the World Bank and IMF report explained.
"If countries with aging populations can create a path for refugees and migrants to participate in the economy, everyone benefits. Most of the evidence suggests that migrants will work hard and contribute more in taxes than they consume in social services," World Bank Group President Jim Yong Kim said in a press release. "With the right set of policies, this era of demographic change can be an engine of economic growth," he added.
Global economic growth projections by the World Bank and IMF now suggest a drop from 3.4 percent in 2014 to 3.1 percent growth this year — though a small pickup in the rate of growth to 3.6 percent is expected in 2016.
Low-income states, where more than 90 percent of global poverty is concentrated, should be implementing policies that improve education, health care and lower fertility rates, the report recommend.
Developed countries like the U.S. and U.K., meanwhile, should open themselves to higher level of international trade, investment and migration, but also implement policies that strengthen social safety nets and welfare systems, the report suggests.
But it may take more than talk of long-term economic benefits to convince those countries to open up their borders.
Leaders across Europe are still torn on plans to redistribute hundreds of thousands of people fleeing countries across Africa and the Middle East, war-torn Syria and areas attacked by radical Islamic State militants.
The economic benefits, May said, would be "close to zero."
"When immigration is too high, when the pace of change is too fast, it's impossible to build a cohesive society," May said.
However, IMF Managing Director Christine Lagarde said this won't be the end of the migration debate — an issue which promises to stay a hot political topic for some time.
"The demographic developments ... will pose fundamental challenges for policymakers across the world in the years ahead," said Lagarde.
"These issues will be at the center of national policy debates and of the international dialogue on how best to cooperate in handling these pressures."
*Kalyeena Makortoff is News Assistant at CNBC.com