Daniel W. Drezner

Gideon Rachman, security risk

Gideon Rachman, security risk

Over at his FT blog, Rachman points out that excessive regulation for admitting both foreigners and foreign capital is posing some problems for the United States:

[T]he survey for the Discover America partnership ? a group of big businesses that seeks to promote tourism ? also suggested that 39 per cent of regular travellers rate the US ?worst? for immigration and entry procedures; the Middle East came second on 16 per cent. Discover America complains of a ?climate of fear? and a ?travel crisis?. It cites a ?near 20 per cent drop in the United States share of overseas travellers since 2000? and claims that this has cost 200,000 jobs and $93bn in revenue. There is always a slightly spurious precision about figures like these. But it is not just the tourism industry that is complaining. A McKinsey report into America?s financial services industry, also published in January, warned that New York risks losing its status as the ?financial capital of the world? within 10 years. The first two problems it cited were over-regulation and fear of litigation. But problem three was ?US immigration restrictions which are shutting out highly skilled workers?. Getting foreign businessmen into the US for one-off meetings can be a problem. Long-term work visas are an even bigger issue. One financial service executive is quoted as complaining: ?It is much easier to hire talented people in the UK ? I couldn?t hire the team I need in the US and I wouldn?t bother trying.? The McKinsey report says Wall Street is still the best place to find talent. But the City of London is catching up, as it benefits from free movement of workers within the European Union and the fact that Britain does not have a quota-limit on work visas, even for non-Europeans. Testifying before Congress last week, Bill Gates of Microsoft argued that US computing companies are also suffering from a severe skills shortage and that: ?America?s immigration policies are driving away the best and brightest, precisely when we need them most.? Mr Gates sees an interlocking set of problems. A smaller proportion of international students are now studying at American universities, partly because it is made so hard for foreign graduates to then get a job in the US. In 2001, the US issued 200,000 H-1B visas for highly skilled workers. That figure has now shrunk to about 65,000 a year. A big increase is promised, if and when a new immigration act is finally passed. But in the meantime Mr Gates complains that American companies are shifting research and development work overseas. Presenting an unwelcoming face to the world has political as well as economic implications. Surveys regularly show that foreigners who have actually visited the US have a much more favourable impression of the country. The same report that uncovered widespread fear of American immigration procedures reported that 72 per cent of visitors had a ?great? experience inside the US. The good news for the US is that so far the damage is at the margins. American universities, investment banks and computing companies are still clearly the world leaders. The American government has shown that it is keen to improve immigration procedures. The annual number of student visas issued for the US, after falling for some years, rose in 2006. The number of business visas issued for the US also rose. The waiting time to get a visa interview in India, which used to be notorious, has been cut back to a few days. Tourist numbers are also going up again. A lot more needs to be done. But at least there is an awareness of the problem.

You’ll have to read his whole post to understand the title of this post.