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2/9/2007 Television Economic Bulletin
Al Jazeera

The Opportunity Cost of Visa Denials

Al Jazeera: What is the direct and indirect economic impact of US visa obstacles in the Arab world?

IRmep: In this first detailed study we have estimated approximately $101 billion dollars in losses to manufacturing industries in the US. Losses for travel and tourism are approximately $1.8 billion. Higher education, which is not usually considered a service export, has had losses of around $2 billion which is equivalent to 9,000 jobs. This is problematic because the Arab market is extremely attractive to the United States. It has grown in terms of import demand from approximately $170 billion at the beginning of this century, or rather, the year 2000, to over $345 billion dollars estimated for this year. So as the US "locks out" industrial and commercial buyers, along with the students and tourists, the losses are mounting.

Al Jazeera: What, if anything are American businesses and government officials doing about this situation?

IRmep: I think there is greater awareness and motivation to do something now that there is a benchmark opportunity cost, which creates pressure on the Department of Homeland Security along with the State Department to invest more resources in visa processing. The global ratio is one US consular officer for every 4,000 applicants. If the opportunity cost of turning away, wrongly, industrial buyers, and officials don't necessarily know who is a tourist and who is coming for big business, on average $1.4 million for some countries, then clearly the US has to invest more people and resources in visa processes. People are beginning to understand that.

Al Jazeera: Is the US willing to make the tradeoff between national security and letting more travelers from the Middle East enter?

IRmep: There is no trade-off. Before 9/11 we were on our way to a greater share of the region's commerce as well as academic interchange with the entire 22 country Arab market. There is really no tradeoff with security if we understand that the necessary security processes simply weren't in place before 2001. By having adequate security processes as well as understanding the huge opportunity costs for not processing visas securely and in a timely fashion, we can identify the problem. A lot of Americans are beginning to understand this from academia, to the business world, and in government.

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