UNITED NATIONS (Reuters) -- Lamenting that "stronger borders are not necessarily smarter ones," UN Secretary General Kofi Annan on Friday said governments could better deal with their concerns about immigrants by working together to harmonize their policies.

Some 175 million people, or 3 percent of the world's population, live outside the country where they were born, Annan said in a lecture at New York's Columbia University.

The mobility this demonstrates, the $88 billion migrant workers send back to their home countries each year and the resulting cultural diversity should be cause for celebration.

But the phenomenon has also raised concerns about migrants committing terrorist acts, taking away peoples' jobs or depleting limited social services budgets, Annan said.

"These are understandable concerns and they must be answered. The answers are not easy. But I have come here today to say that they do not lie in halting migration -- a policy that is bound to fail," he said. "I say the answer must lie in managing migration -- rationally, creatively, compassionately and cooperatively."

Annan's speech, billed as a major policy address, comes during a U.S. crackdown on immigration as part of its global war on terror and amid years of European efforts to exclude foreigners to protect domestic jobs.

Other nations routinely tighten border controls to keep out refugees driven from their homes by war, hunger, poverty, natural disaster or human rights abuses.

But while "homeland security" was vital in an era of increasing alarm about terrorist attacks, Annan said it would be a tragedy for the United States to try to keep out migrants or violate their human rights.

America was "a land where constant renewal and regeneration are essential elements of the national character. That character must never be lost," he said.

"We need to protect society and fight terrorism, but I don't think there is a tradeoff between security and human rights and civil liberties," he said in response to a question.

While various UN and other international agencies deal with some aspects of immigration, no single global institution deals with all the issues raised by "this quintessentially global phenomenon," Annan said.

For this reason, he endorsed a recent initiative to form a Global Commission on International Migration to study how to improve cooperation.

The commission is co-chaired by former Swedish Development Minister Jan Karlsson and World Bank Managing Director Mamphela Ramphele, a South African. Other members are Australia, Brazil, Canada, Egypt, Italy, Mexico, the Philippines and Switzerland.