Australia’s Asylum-Seekers and Qatar’s Art Acquisition Budget

Australia has a strong claim to being the most successful of the market democracies in recent decades. Though it is entirely possible that Australia will fall into a recession in the months to come, it has managed to avoid one since the early 1990s. Australia is also by far the most egalitarian of the English-speaking market democracies, with a Gini coefficient of .303, which is closer to Denmark’s .248 than to America’s .467. It is true that, as Anahad O’Connor reports, Australians are getting fatter, but there is much to be said for its model of “low-tax egalitarianism.” One of the reasons Australia manages to combine low taxes and low child poverty could be its approach to immigration policy, which places a heavy emphasis on skills, including English language proficiency. “Competing for Skills,” a study sponsored by the Australian government, found that the level of welfare dependence among migrants was extremely low, consistent with the relatively high wages earned by migrants. Australia’s Labor government has sought to reduce legal immigration, in part due to popular concerns about exceptionally high population growth, driven in no small part by high levels of net immigration. And so visas for international students and the General Skilled Migration program have been downsized.

This is the context you need to understanding Australia’s new policy regarding so-called “boat people” or asylum-seekers. Kevin Rudd, the Australian prime minister, has forged an agreement with Papua New Guinea to settle asylum-seekers coming to Australia in PNG, and in exchange Australia will provide PNG with an undisclosed sum. The Economist is critical of the new policy, which it suggests is little more than a political ploy to fend off Australia’s right-of-center Liberal-National alliance:

On the boats, [Rudd] admits his “regional resettlement arrangement” with PNG is a “very hardline decision”. Some refugee-law experts go further. James Hathaway, of the University of Melbourne, calls it the “most bizarre overreaction”. He reckons refugees are paying the price for Mr Rudd’s “wanting to appear more butch than Julia Gillard and more reactionary than Tony Abbott”. Australia does not have an asylum problem, says Mr Hathaway. “It has a political problem.”

The figures bear him out. Political leaders of all stripes tend to underrate Australia’s capacity to absorb outsiders. Last year the country admitted almost 200,000 immigrants. Most of the 47,000 boat people of the past five years were found to be “genuine refugees”. In 2011 Australia received 3% of asylum applications lodged in industrialised countries, a proportion roughly in line with its population.

Note that there is a broad political consensus in Australia that net migration should decrease, and that Australia’s immigrant as of last year was roughly twice that of the United States as a share of population. The Economist’s correspondent is indifferent to this political consensus, confident that Australia has an impressive capacity to absorb outsiders. Yet he neglects the possibility that the selectivity of Australian immigration policy contributes to the perception that the country has a very high absorptive capacity – absorbing skilled English-speaking migrants who earn the median income or above is not necessarily easy, but it is presumably easier than absorbing rural refugees from radically different cultural backgrounds. The article goes on to detail the difficulties the Australian authorities have experienced with refugee resettlement in the recent past:

Just this week at least nine people drowned, 180 were rescued and an unknown number were missing after a boat sank off the Indonesian island of Java. Over 1,000 people are thought to have drowned trying to reach Australia in the past ten years. Iran, Afghanistan, Sri Lanka and Pakistan are now the main sources of asylum-seekers.

Since their hasty reopening last year, the camps have proved politically more explosive than ever. Much of the Nauru one burned down in a riot among its 544 detainees on July 19th. And after an outcry earlier this year about the children held at the Manus Island camp in PNG, Australia moved them and their families to Christmas Island and the Australian mainland. After a visit to Manus Island in June, the UN’s refugee agency reported that conditions were still below international standards. On July 23rd Rod St George, who used to work there, told Australian television that men had been sexually and physically abused by fellow detainees.

Mr Hathaway calls Manus Island “the hellhole of PNG”. With Mr Rudd’s PNG idea, Australia plans to expand the camp’s capacity fivefold to hold about 3,000 asylum-seekers. It will also give Mr O’Neill’s government more aid, on top of the A$500m ($463m) a year Australia already provides, for health, policing and university education. Ben Saul, a human-rights lawyer, reckons the PNG solution could breach the spirit of Australia’s obligations under the UN’s refugee convention, which stipulates that countries capable of dealing with refugee flows should not shift responsibility onto others. For Mr Rudd that seems of less importance than shoring up votes at home. He calculates that the prospect of living indefinitely in PNG will stop the boat people, where earlier lurches to the right have failed. It is a gamble.

Given the volume of refugees willing to risk death to reach Australian shores, the notion that Rudd’s decision is entirely cynical seems strange. What might happen — how many would-be refugees would take to water — if Rudd didn’t seek to deter asylum-seekers from believing that Australia would welcome them in large numbers? 

Bloomberg View reacts even more harshly to Rudd’s PNG decision:

Despite Rudd’s tough talk, the country is not being swamped by ocean-going refugees. In 2011, it received just 3 percent of global asylum seekers. Last year, 7,379 people arriving by boat were processed as refugees, an increase of 43 percent over the previous year. But the 4,766 maritime asylum applications approved still represent just 0.02 percent of the country’s population, or about one for every 5,000 Australians.

By contrast, there will soon be one Syrian in Jordan for every six Jordanians, the result of Syria’s drawn-out civil war. Jordan, the 115th-richest nation in the world, can’t afford to pay its neighbors to take refugees off its hands. Australia, the 10th-richest nation, can. For both countries, however, there remains a moral obligation to provide a refuge for those fleeing persecution. Is it acceptable for a country to essentially buy its way out of it?

Bloomberg treats a 43 percent increase in the space of one year as trivial, because the annual influx of refugees nevertheless represented a small share of Australia’s total population, neglecting the possibility that a more lax policy might yield a larger influx in the future. This larger influx, in turn, may well lead to more deaths at sea. 

And as for Jordan, there is no question that it faces serious economic constraints. Several of its neighbors, however, are in a strong position to lend a hand. Consider, for example, a recent article by Robin Pogrebin in the New York Times, “Qatari Riches Are Buying Art World Influence“:

No one knows exactly how much Sheika al Mayassa has spent on behalf of her family or the museum authority since she was named chairwoman by her father, the former emir, in 2006. But experts estimate the acquisition budget reaches $1 billion a year and say the Qataris have used it to secure a host of undisputed modern and contemporary masterpieces by Francis Bacon, Roy Lichtenstein, Andy Warhol and Jeff Koons.

Where all this art will eventually end up remains something of a mystery. But it seems clear that, just as Qatar has used its oil riches to boost its influence in the Middle East with ventures like arming Syrian rebels, its wealth is also being deployed to help the country become a force in the world of culture.

This effort to create a first-class contemporary art collection, essentially from scratch, has buoyed the international art market, experts say, and contributed to some of the escalation in prices.

Until Qatar’s 2007 purchase, for example, the most expensive Rothko ever sold at auction (“Homage to Matisse”) had drawn $22 million in 2005, less than one-third of the price Qatar paid. In 2011 the $250 million spent for “Card Players” was four times the highest public price ever paid for a work by that artist.

Far be it from me to criticize Qatari public policy. But while Qatar is raising the floor on the price of Rothkos, Australia is committed to spending large sums ($463 million per annum, an amount that is set to increase substantially under the new policy, though we’ll see if it ever gets as high as Qatar’s acquisition budget) to resettle refugees in Papua New Guinea, a country that is, as Bloomberg View reminds us, very poor:

Papua New Guinea, where life expectancy is 63 years and the average adult has fewer than four years of education, ranks 156th (out of 186) on the UN Human Development Index. Whether the country can properly care for asylum seekers is at best an open question.

Even if it can meet that test, Australia’s decision faces a second challenge. The UN claims that the convention commits states to sharing the responsibility of protecting asylum seekers, rather than trying to shift that burden elsewhere. By that benchmark, Australia looks to be violating the spirit of the convention, if not the letter.

But Papua New Guinea is also relatively safe, particularly when compared to war-ravaged Syria. The purpose of refugee resettlement is to shelter individuals from war-ravaged societies, or who face persecution or even extermination. Refugees from Syria will face no such danger in PNG.

Moreover, the idea that Australia can’t discharge its duty to refugees by offering compensation — in the form of subsidizing their presence in PNG — defies logic. Baumol’s cost disease tells us that it is far more expensive to deliver labor-intensive services in rich countries than poor countries, as the medical and education sectors in rich countries have to compete for skilled labor with firms in highly-productive tradable sectors. If refugees can be offered a reasonable standard of care at much lower cost in PNG, it makes little sense to try to do to the same in Australia. Indeed, Australia’s decision has the potential to give the economy of Papua New Guinea a boost, a development that shouldn’t be scoffed at given PNG’s relative poverty. Bloomberg View isn’t explicitly asking that every individual Australian welcome a Syrian into their home. Rather, its editors are asking Australian taxpayers to pay much more than is strictly necessary to shelter refugees from horrendous violence, despite the fact that doing so will deprive PNG of jobs and resources that it can use to better the lives of its own citizens.

Given that PNG is relatively safe, and that Australian resources can purchase a standard of care at least comparable to what is on offer in Jordan, the only explanation for why Australia should allow asylum-seekers to settle in Australia proper is that this is not about seeking shelter at all, but rather about offering asylum-seekers the superior economic opportunities offered by a more affluent urban country. That, of course, leads us into an entirely different debate about whether or not Australia should abandon what has proven a quite successful immigration policy in favor of an entirely different policy that might lead to a far less egalitarian society. 

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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