USAID Engagement with Diaspora Communities Mark Hannafin Senior Conflict Advisor Office of Conflict Management and Mitigation.

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1 USAID Engagement with Diaspora Communities Mark Hannafin Senior Conflict Advisor Office of Conflict Management and Mitigation Seminar on Peacebuilding: The Role of Diasporas April Key Comments Responding to a dynamic global phenomenon: migration Migration a cross-government issue Diaspora can play a greater role in development than USAID (volume, DNA, sustainability, networks, etc.) Diaspora engagement more than remittances; avoid glorifying remittances Need better understanding of Diaspora/migration and issues related to conflict/fragility, gender, illicit trade, poverty reduction, etc. Need to understand effects of current global crisis 2 Migration Overview 1

2 Migration Overview 1. Diaspora Remittances 2. Diaspora Philanthropy 3. Diaspora Volunteer Corps 4. Diaspora Direct Investment (DDI) 5. Diaspora Capital Markets 6. Diaspora Tourism & Nostalgic Trade 7. Diaspora Advocacy 5 1. Remittances Uses: consumption, health, education, housing, debt repayment, MSME finance Possible Partnerships: Financial literacy Involve MFIs in banking the unbanked Promote innovative modes of transfer: mobile banking Link indigenous saving schemes with remittances Remittance-backed investments: mortgages, health insurance, education fund or student loans, pension plan, entrepreneurial lending 6 2

3 US$ billions Private debt and portfolio equity Recorded Remittances FDI Official Development Assistance -25 Sources: Global Economic Prospects 2006 (World Bank), IMF Balance of Payments Statistics Yearbook 2008, World Development Indicators 2008, and Global Development Finance Diaspora Philanthropy Also known as collective remittances Indigenous charity organizations Possible Partnership: Hometown Associations (HTAs), USAID/Missions, Foundations, Private Sector ( Migrantserving ), Local governments 3. Diaspora Volunteer Corps Hometown Associations Hyphenated Peace Corps. Notable Examples: Armenia Volunteer Corps (AVC), IndiCorps, EthioCorps USAID s VEGA South Sudan 8 4. Diaspora Direct Investment (DDI) Investment of financial, social, human, and political capital FDI with the soul and resilience of remittances USAID Diaspora Marketplace Initiative: A Diaspora-led social and business entrepreneurial competition to facilitate DDI and generate employment opportunities in the countries of origin. Pilots in Haiti and Africa 5. Diaspora Capital Markets The Diaspora as an institutional investor Diaspora Bonds (private sector) Diaspora-backed P2P Lending Networks Investment Funds or Clubs Securitization of future flows of remittances Foreign Currency Bank Accounts Local Stock Markets 9 3

4 6. Diaspora Tourism & Nostalgic Trade Significant source of foreign exchange earnings Conduits for market entry Research underway to examine size of nostalgic trade Possible partnership: value chain support 7. Diaspora Advocacy & Diplomacy Agents of knowledge networks Advocacy role for good governance Agents for conflict mitigation & management 10 Advocacy and Diplomacy Peace Processes Impact: Negative: Encourage continuation of conflict through material/financial support; destabilize through polarizing communities Positive: Exert pressure on parties to return to talks; expertise to develop moderate/credible positions; foster cooperation 11 Types of Diaspora Peace Process Programs Neutralize Spoilers and build trust among the diaspora Infusing ideas and recommendations into the peace process Build capacity of the diaspora to engage in the peace process Foster internal and external support for the peace process Promoting post-conflict economic and political development 12 4

5 Future/Current Analysis Conflict Mitigation Research on Diasporas Diaspora assistance with disaster response WG on diaspora and development Diaspora groups, ICT Early warning Issues for further analysis Policy and Legal constraints Understanding who are the credible, legitimate and effective diaspora groups Programming diaspora as a means or an end Linking economic and political incentives Do No Harm 13 Additional Information Online resources: Contacts: Mark Hannafin, Sr. Conflict Advisor, Office of Conflict Mitigation and Management, mhannafin@usaid.gov, Borany Penh, Sr. Political Economist, Office of Poverty Reduction, bpenh@usaid.gov, Thomas Debass, Sr. Advisor, Global Development Alliance office & Microenterprise Development office, tdebass@usaid.gov,