Promoting Diaspora Linkages: The Role of Embassies July 14, 2009 Sonia Plaza, The World Bank International Conference on Diaspora for Development: World Bank, Washington DC
Outline Background Role of Diaspora Forms of Involvement Instruments Survey Outline Preliminary Findings Policy Recommendations Emerging trends due to economic crisis
Background To fill the gaps in our knowledge of the role of the diaspora in Africa s development To better understand contributions by the African diaspora to development in origin countries through investment, trade, knowledge transfers, collective remittances, etc. To identify constraints that impede diaspora individuals and associations to invest/trade/return to their home country
Role of Diaspora Overcome inadequate information about international trading opportunities: Providing market information Supplying matching and referral services to their members Migrants facilitate host and source country bilateral trade and investment Diaspora can be an important source as well as facilitator of: Research and innovation Technology transfer Skills development
Forms of Involvement Licensing agreements between diaspora owned or managed firms Direct investment in local firms as a joint venture Knowledge spillovers (managerial positions) Networks of scientists and professionals Virtual return, extended visits or electronic communications Return to permanent employment
The diaspora is more willing to take risks in its own country but: It will require: Conducive business environment Sound and transparent financial sector Rapid and efficient court systems Safe working environment
South African Diaspora Main barriers to doing business according to the Diaspora Crime Cost of living Taxation Standard of public and commercial services
Types of Direct Contributions Type of Support Noncommercial financial Commercial financial Examples Collective remittance to community groups Investment in IT in India
Using the diaspora: Some lessons from high skilled migrants Key players: expatriates who have become senior executives in firms They will build awareness in their corporations of their native countries as outsourcing candidates
Using the Diaspora to Supplement Local Capacity Global exchange of knowledge Networks provide: A critical mass of professional peer review not available at the national level An effective mechanism for keeping in touch with the frontier of knowledge A cost effective means for specialized training and skills formation Mentoring, internships, etc
Instruments Case studies of diaspora associations Case studies of diaspora individuals Survey of embassies in select destination countries
Survey of Embassies
Background on Survey of Embassies Purpose: to understand the role embassies are playing in enabling their diaspora to make economic contributions to the home country Coverage: worldwide Washington DC London, UK Paris, France Pretoria, South Africa Abu Dhabi, UAE
Background on Survey of Embassies Progress-to-date: piloted with 10 embassies in Washington DC: Ethiopia, Mauritius, Ivory Coast, Uganda, Senegal, South Africa, Ghana, Kenya, Angola, Zimbabwe, Argentina, Australia, Canada, Israel, Philippines, Pakistan, Bangladesh 11 embassies in London: Pakistan, Uganda, Zimbabwe, Kenya, Nepal, Bangladesh, Ghana, Ethiopia, Senegal, India, Nigeria, 4 embassies in Pretoria: Ethiopia, Ghana, Uganda, Botswana, Zimbabwe, Nigeria 3 embassies in Abu Dhabi: India, Nepal, Pakistan 2 embassies in Paris: Ethiopia, Nigeria
Survey Outline Embassy Section I. Citizenship/Representation/Legislative Issues II. III. Promotion of Home Country Interests Communication and Access to Information Consular Section I. Remittances II. III. IV. Recruitment/Work Opportunities Response to Natural Disasters Engaging with expatriate professionals/diaspora
Challenges No government has complete mapping of diaspora; data mainly based on those who register with embassy Very little involvement with investment, trade & technology transfer, few embassy staff dedicated to this: At most, facilitate forums, or provide matching Little coordination at the embassy/consular level when dealing with diaspora Some instances of government mistrust by diaspora (e.g. Ivory Coast) A few embassies are developing financing instruments to attract diaspora (e.g. Ethiopia diaspora bonds, Ivory Coast no exact information on this)
Boosting Development Impact: Inventory of Select Policies Objective Mobilizing the diaspora Stimulating ties with overseas communities Stimulating investment Outreach to migrant collectives/ Hometown associations (HTAs) Improving the attractiveness of receiving countries to diaspora Dual citizenship Virtual/temporary programs Government invitations Measure Diaspora bonds Foreign currency accounts (Bangladesh) Premium interest rate accounts Investment packages to overseas (China) Establishing a special office (Mexico the Presidential Office for Mexicans abroad Linking up credit union cooperatives or banks with leading commercial bank institutions from developed countries with extensive branch networks in the sender and in the receiving countries Increasing domestic banks presence in transferring remittances Saving mobilization: social security/housing/ microfinance programs Outreach through MFI infrastructure Outreach through migrant s service bureaus Tax breaks on imported capital goods SME schemes (financial, infrastructure or innovative) Training programs Matched funding Public-private ventures Competitive bidding for development projects Research funding and monetary incentives (Ireland) Attractive salary packages, multiple-entry visas Enabling migrants to spend on their relatives behalf
Policy recommendations Data Improve data collection on diaspora Improving diaspora outreach Embassies/foreign service departments need to provide more investment, trade, skills & technology transfer services, as well as more staff training in these areas Better coordination among different departments within the embassies and governments/ Stimulating Investment Innovative ways of developing financing instruments, harnessing diaspora resources, etc
Emerging Trends due to Economic Crisis (Washington, DC) Return migration Some anecdotal cases of migrants returning (Ethiopia, Angola) Ethiopia has seen remittances increase as a result All embassy nationals negatively affected Low-skilled diaspora: moving into poverty, looking for social safety nets from embassy, returning home High-skilled diaspora: job losses, home loses, requesting assistance from embassies Government interest in investment/trade, tapping the diaspora, financing instruments is increasing Impact at home Kenya: sharp drop in investments on the NSE and real estate market Reduction in remittances (no numbers on this)
Thank you For more information, please contact Sonia Plaza at splaza@worldbank.org or Sohini Chatterjee at schatterjee1@worldbank.org or Farai Jena at fjena@worldbank.org
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