human development, social justice and sustainable social systems
Empowering Diaspora Communities
Empowering local actors
In the context of the European-funded and European-wide Caritas MIND project (Migration. Interconnectedness. Development), Caritas Europa’s network aims to encourage EU and MS institutions as well as European society to recognise migrants anddiaspora as real contributors to the integral human development of European society as well as to the development of countries outside of the EU to which they still maintain a connection.
In 2017, migrants and diaspora from developing countries sent 466 billion US dollars home to families and friends in their home country. This is more than three times as much as worldwide official development aid. In some countries from the Global South, such as Kyrgyz Republic, Tajikistan, Nepal or Liberia, remittances amount to almost or more than 30% of the country’s GDP. And the importance of such remittances is only likely to grow in the coming years.
With this money, the migrant and diaspora communities make an important and positive contribution to the development of their country for example by investing in new business ventures or in infrastructure (such as schools, hospitals, community centres, roads, etc.) in their communities of origin.
Understanding the challenges and opportunities of diaspora remittances and investments
Notwithstanding the essentiality of diaspora as active development agents, remittance cost transfer remains too high! Cross-borders money transfer costs on average 7.1% of the amount sent. In this way, millions of the hard-earned savings of migrants are lost and the high transactions costs push migrants and diaspora communities to use informal channels (such as families and friends) to send money back home, thus resulting in a high number of not-registered flows.
As Caritas we are pleased that in the context of the Sustainable Development Goals, the United Nations intends to limit the costs for international money transfers to 3% by 2030 with a number of very concrete proposals which include more clarity about tariffs, changes to the regulations and easier access to banking services for people in developing countries.
However, decreasing costs for transnational transaction alone are not enough. Caritas believes that more can be done to empower labour migrants as international social and economic actors. If they are willing to, migrants should be given the proper tools, opportunities and support in setting up sustainable businesses and productive activities in the country of origin to complement and/or replace seasonal/permanent migration. They should be able to receive training/counselling to ensure some remittances also go in fostering the household well-being (increased access to health, education, etc.)
Good Practices from Caritas Armenia
A promising example can be drawn on the experience of Armenia where some CSOs-led and Caritas Armenia pilot projects try to sensitise migrants on the possibility of using remittances to set up independent business opportunities at home and provide important mentoring support and substantial matching funding.
Armenia has a very rich history of diaspora engagement. Although it is a relatively small country, with a population of 3 million, Armenian global diaspora is estimated to be around 7 million people, especially between Russia (2.5 million) and the United States (1.5-2 million). The Armenian diaspora has traditionally been quite active in engaging with the country ever since the early 20th century and especially since the 1980s. There are more than 20 diaspora organisations around the world, many of whom now have their own branches in Yerevan or other Armenian cities.
Over the years, the engagement of the diaspora has gone through different phases. At first they mainly provided humanitarian assistance in the forms of charity donations, especially following an earthquake disaster and the aftermath of the Nagorno-Karabakh conflict. Between the 1990s and 2000s, they turned to development assistance, for example, by building orphanages or water facilities, or by renovating kindergartens. Over the last decade, diaspora groups have joined forces with the Armenian state and local private actors to push for economic growth, technological innovation and job creation in Armenia.
Many initiatives have been set up over the last few years, including the creation of digital platforms, exchange programmes, or mentorship and training schemes that try to attract Armenian diaspora back to the country and to ensure they contribute to the development of the country with their skills, their know-how and their economic resources.
Regarding diaspora investment and diaspora engagement
Diaspora investment is a vital resource for low- and middle-income countries where the State has limited resources to provide many basic services and/or the needed know-how. While Diaspora investment cannot replace the State, it can still fill the gap and provide needed additional funding.
However, it is also important to go beyond the idea of leveraging diaspora just for business purpose and to involve it through more meaningful social and cultural ties (e.g. provide social support, mentoring, skills transfer, new ideas and norms, etc.).
Diaspora investment and contributions need to be monitored and controlled
The experience form Caritas Armenia showed the necessity to fight corruption and incompetence and to set up mechanisms of mutual accountability between State institutions and diaspora in order to show to everyone (locals and diaspora) that money is being well spent and has a positive impact on the country.
In Armenia, the presence of several diaspora organisations, sometimes with competing interests or overlapping mandates prove that coordination is needed for more efficiency and a more positive impact.
Focus on diaspora cannot come at the expense of local population
States should make sure the local population is not neglected and that limited state funds are not being (almost) exclusively used to attract diaspora back in the country.
For example, Armenian Caritas has joined the NARUZH initiative – an initiative intending to entice Armenian diaspora youth with innovative businesses to settle in Armenia. The project made sure that local youth (including Syrian Armenians who moved to Armenia because of the war in Syria, locals and older repatriates) were eligible to participate. This is essential to make sure the country as a whole can benefit from those projects and diaspora engagement does not create unnecessary tensions in the country.
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