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By National U.S.-Arab Chamber of Commerce
I hope that our Saudi friends will be patient as they apply for their visas, but I do encourage them to come to the United States even though it's a little bit more difficult now than it might have been several years ago. Please understand the reasons for it, but do come.. ..We want to remain an open country, and we want to remain open to our Saudi friends to come and visit us.
U.S. Secretary of State Colin L. Powell
Jeddah, Saudi Arabia
July 29, 2004
EDITOR'S NOTE:
This report was prepared by the National U.S.-Arab Chamber of Commerce on September 10, 2004 and is reprinted here with permission.
EXECUTIVE SUMMARY
Changes brought about in the aftermath of 9/11 have had, and will continue to have, a profound impact on U.S. society. Nowhere is this more apparent, perhaps, than in America's visa policies and their effects on nations and individuals around the world.
Many leaders in the Arab world today, as a result of early exposure to the United States, have an affinity for the USA, respect for American institutions, and an appreciation for the way business is done in the United States. However, the next generation of Arab leaders, particularly those who are being denied an opportunity to study in the USA, will lack this appreciation for America.
In the immediate aftermath of 9/11, many companies and sectors were adversely affected, particularly those that depend on foreign buyers and investors coming to the United States. In the three years since September 2001, a significant percentage of the most affected companies concluded that this difficult situation will not improve anytime soon and they changed the way they do business: diversifying products and services, opening offices in overseas markets, and affiliating with foreign entities in order to capture business that formerly came to the United States. �
U.S. companies doing business internationally have been profoundly affected by restrictions on visas to the United States. Despite this fact, there has been little apparent effort to quantify the effect that these new policies are having across-the-board on U.S. firms. To date, most of the data that are available are anecdotal and on a sector-by-sector basis, thereby frustrating efforts by the U.S. business community to provide a "big picture" assessment of how the new visa policies are undercutting America's private sector.
A June 2004 study by The Santangelo Group entitled "Do Visa Delays Hurt U.S. Business?" found that U.S. companies suffered $30.7 billion in financial impacts between July 2002 and March 2004 due to delays/denials in the processing of business visas. This figure was based on extrapolations that included revenue losses of $25.53 billion and indirect costs of $5.15 billion. The U.S. trade deficit during this period totaled $798.5 billion, so the $30.7 billion loss due to visa delays equates to nearly four percent of the U.S. trade deficit.
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Academia:
According to an October 2003 survey by the Institute of
International Education (IIE), 59 percent of respondents said that the
single biggest reason for the slowdown in foreign students coming to the
USA is the more restrictive visa application process.
IIE found that there was a 14.5 percent drop in Arab students from
academic year 2001-02 to 2002-03. Based
on the IIE's findings, it is estimated that losses to the U.S.
economy due to a drop in Arab students that year amounted to at least $43
million.
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Culture and the Arts:
Many in the cultural and artistic community, like their
counterparts in the academic community, depend heavily on international
exchange programs. Approximately
30,000 artists apply each year to work in the United States.
In the past, visa applications took about three months to process.
Today, they take six months or more.
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Medicine and Healthcare:
Anecdotal evidence offered by some of the nation's leading
facilities suggests that the U.S.
medical community is losing at least $1 billion per year in direct
international patient care. When indirect revenues are
figured in (losses by hotels, restaurants, transportation firms,
etc.) this number jumps to some $4
billion per year that is now going to other nations. New visa requirements are also precluding international
medical graduates (IMGs) from entering the country.
According to the American Immigration Law Foundation, foreign-born
medical professionals in the United States account for 25.2 percent of all
physicians, and 1.1 million immigrants account for 13 percent of health
care providers in the United States.
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Travel and Tourism: According to
Global Insight (DRI-WEFA), "Spending by international visitors in the
United States is a significant contributor to the U.S. economy, comprising
nearly 10 percent of total exports."
The Travel Industry Association of America (TIA) says that over
three years, the loss of international travel to the U.S. has cost
the U.S. economy $15.3 billion in expenditures.
The Institute for Research: Middle Eastern Policy (IRmep) notes,
"If new procedures turn away desirable Saudi visitors, U.S. education,
business travel, and tourism industries could easily lose
an estimated $4.7 billion in Saudi travel revenue over the next
decade."
During 2000-02, according to data in the U.S. Commerce Department's "Survey of Current Business" (October 2003), total travel receipts from the Arab world dropped by nearly half, with an even larger drop in Saudi Arabia -- more than 60 percent. The drop in passenger fares was even more dramatic, representing a 100 percent drop in fares from Saudi Arabia and a drop of 97 percent among the other Arab nations. �During the three-year period from 2000 to 2003, arrivals from Saudi Arabia on all airlines plummeted from 75,320 to 18,727, representing a drop of more than 75 percent.
The National U.S.-Arab Chamber of Commerce estimates that in the Arab world alone, the direct impact of America's more restrictive visa policies is currently costing the USA nearly $1.5 billion per year, and hundreds of billions of dollars' worth of new business opportunities hang in the balance. This represents losses to business in general (-$400m.), academia (-$50m.), culture & the arts, medicine & healthcare (-$500m.), and travel & tourism (-$500m.). �
This estimate is conservative and does not include many services or indirect revenues lost. Adding these multipliers to the equation could well place the loss from reduced contact with the Arab world at more than $5 billion per year. �Nor do these estimates take into account the loss of new Arab investment in the United States, as well as disinvestment, and the attendant out-of-pocket costs, opportunity costs, and job losses for Americans.
The Executive Branch and Congress need to hear from America's private sector about the impact that visa policies are having on U.S. national interests. This issue will not receive the attention it deserves unless there is a concerted, consistent, and ongoing effort by the private sector to make this issue an even higher priority.
Recommendations:�
1) Establish a broad-based coalition that enables the private sector to speak with one voice.�
2) Establish a working group that would open a clear channel of communication between the public and private sectors and disseminate data and information more effectively. �
3) Standardize procedures to eliminate policies that appear inconsistent, arbitrary, or discriminatory.�
4) Dedicate sufficient resources so that public officials can do their jobs without "cutting corners."�
5) Broaden the Scope of Inquiry to gain a better understanding of the cumulative impacts that these new visa policies are having on U.S. interests. �
The U.S. Government, at the instigation of Congress, needs to undertake a comprehensive assessment, one that covers the globe and takes into account as many different sectors as possible. �Until this happens, there will be no reliable understanding of the long-term implications of America's new visa policies and what they mean for current and future generations. �
Click here to read the complete report (PDF). �
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