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A SUBSIDISED TRAGEDY: Saving Mediterranean migrants channels $40 million a year to organised crime

Operations to rescue migrants from the Mediterranean may inadvertently be subsidising organised crime by $40 million a year, according to research by Carlo Amenta, Paolo Di Betta and Calogero ''Gery'' Ferrara, to be presented at the Royal Economic Society''s annual conference at the University of Bristol in April 2017.

Following the tragic death of 368 people in the Lampedusa shipwreck in 2013, the military operations to intercept migrant boats prioritised rescues. Using the results of an investigation into a Palermo-based people-smuggling gang, the researchers analyse the many factors that give migrants incentives to make the crossing.

Their research shows that by increasing the safety of the crossing for migrants, the operations encourage an average of 574 more migrants per month to the shores of Southern Italy. The average price for the crossing is $1,392.52 per migrant, with a 65% profit for the smugglers.

Various characteristics of countries of origin also affect the rate of arrivals, including GDP per capita, religious and ethnic fractionalisation, age structure and urbanisation, but these cannot be easily changed in the short term. This suggests that an immediate response to the crisis requires ad hoc solutions adopted with the collaboration of Northern African countries, perhaps under the aegis of supra-national organisations that provide oversight for the whole operation.

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A subsidised tragedy: enforcement and the migrant crisis in the Mediterranean Sea

The military operations in the Mediterranean Sea subsidise all the criminal organisations operating on the migration routes to the order of at least $40 million per year, the preliminary results of this research show.

The tragic shipwreck off the island of Lampedusa (Sicily) that occurred on 3 October 2013, in which 368 persons died, marked an upheaval in expenditure on the sea operations (five-fold compared with the preceding period) and a turning point in their goals –by stressing rescues.

Are the sea operations a necessary response to the crisis or are they unintentionally stimulating departures and consequently the demand for human smuggling? Indeed, there is a striking resemblance between the pattern of departures and that of the money spent on the sea operations – see Figure 1 below.

The results of the research show that the sole effect of the operations is to bring an average of 574 more migrants per month to the shores of Southern Italy. Indeed, 254 migrants would have arrived anyway through the sole Central Mediterranean Route, regardless of the operations in force since October 2013.

The amount of money spent on the sea operations across the Mediterranean is not relevant. Thus, the overall net effect of the operations is to increase departures and the increase in arrivals proves that the sea operations after the shipwreck are ineffective for enforcement.

Regardless of the declared purpose (to rescue and/or to enforce), these operations provide a safety net for migrants and as such they transfer a subsidy to the criminal organisations, because the safety net at sea works as an insurance package that accompanies the set of ''services'' rendered by smugglers.

Estimating the amount of the subsidy was possible thanks to the investigations conducted by the Prosecutors in Palermo (Sicily) that uncovered a large criminal organisation active in human smuggling across the Mediterranean and in kidnapping migrants on their routes through Africa.

The investigation allowed a deeper understanding of the services provided by a specific criminal organisation, used as a case study, and the estimation of the annual turnover and profits earned. Since the average price for the journey to Italy is $1,392.52 per migrant, total annual turnover estimated for the organisation tops more than $60 million (with a 65% profit).

Many factors concur in increasing or decreasing the arrivals of migrants from the 44 countries in the period under investigation (January 2011 through March 2016). Deaths on the month before do not stop migrants, but increase arrivals (one more migrant for each reported dead), while arrivals decreased after the death of Gaddafi (-348 per month).

Some characteristics of the country of origin increase arrivals (higher GDP, religious fractionalisation and higher urbanisation); others have a negative effect (higher per capita GDP, ethnic fractionalisation, higher percentage of people in the 15-34 age cohort).

The colonial past is not relevant, except for countries once under Italian dominion (+818 arrivals per month). Irrelevant factors are foreign direct investments, the percentage of the population having electricity, linguistic fractionalisation, being the country in a current conflict and the country''s history of conflicts.

Although the authors do not address policy issues directly, it appears that the structural characteristics of the countries of origin that influence arrivals cannot be easily tampered with in the short term.

In turn, this suggests that an immediate response to the crisis requires ad hoc solutions adopted with the collaboration of Northern African countries, perhaps under the aegis of supra-national organisations that provide oversight for the whole operation.