One potentially Pareto-efficient solution is to institute a system of temporary contract employment in the host countries, with various penalties on the migrant and/or his employer to ensure that there is repatriation after a set number of years. In principle, the return migrants would then be in an even better position to contribute to the development of their home economies. [Rodrik 2001, 2] Since the workers are entering the host country for a fixed time period (perhaps in a special visa category), there are no immigration implications, and since the workers are not accompanied<sup>by</sup> families, there are virtually no social implications. There might be other arrangements, but the goals of this sort of arrangement are solely earning to acquire a "nest-egg" which can then be used back in the home country perhaps to capitalize a small business-as well as learning new skills and new ways of doing business which can be applied in the home country. In some cases, the host company may decide to help guest-workers to set up a subcontracting operation back in their home country to produce a low-end product that the guest-workers learned to produce during the temporary work at the company. Thus the temporary labor arrangements might<sup>pave</sup> the way for exports and FDI for the home country.

From the viewpoint of the home country, the regularization of this sort of scheme would help to reset psychological expectations so that work abroad would be seen as a path to local development rather than an escape from local under-development. Regularization itself would also help to take business away from the smugglers and traffickers who prosper with ever tighter restrictions on labor migration. The idea of a temporary labor scheme will be illustrated with an example that grew rather spontaneously out of a World Bank project [see box on MoldovaSlovenia Temporary Labor Scheme].

# _Box 6. The Moldova-Slovenia Temporary Labor Scheme_

In Moldova, the poorest of the former Soviet republics, a rather successful restructuring agency, ARIA, was set up with the help of a World Bank private sector development loan [Ellerman and Kreacic 2002]. Part of the program was for managers and skilled blue-collar workers to spend some time working in enterprises in more advanced countries. In these programs, it is important that the more advanced countries not be too advanced; otherwise the experience will have little applicability back in the home country. In the case of Moldova, this meant selecting a country not in the west, but in the "near-west" of central Europe such as Hungary, Poland, or Slovenia.

In the case of Slovenia, ARIA had consulting services from a Slovene organization with restructuring experience. Out of that relationship, a temporary labor migration scheme emerged that proved to be commercially viable on its own. Groups of skilled blue-collar workers would be selected in Moldova according to certain criteria. They would be financed by their companies to be placed for six months working in Slovene companies and living together in apartments. The workers would be paid at minimum Slovene rates which were over five times their usual wages. At the end of the six months, they would have acquired not only industrial and technical skills but also a nest-egg of savings. Some workers would buy a cheap used car in Slovenia and then drive back to Moldova. Others would use their savings for investments back in Moldova. Another consequence of the program was some subcontracting and investment of Slovene companies back into Moldova. Some workers came for several six month periods. Eventually the Slovene hosts realized<sup>that they</sup> could subcontract some of the low-end items to be produced back in Moldova by the workers they had trained-perhaps with some special machinery supplied from Slovenia. Thus the "trade" in the form of temporary fixed-term migration leads to trade in goods and eventually to capital investment. Worker placements were so successful for both parties that a company was formed in Slovenia to run the program entirely on a private basis.

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