Increasingly, diasporans are searching for avenues to extend their development impact beyond politics and philanthropy. They seek ways to leverage the human, social, and financial capital they have acquired to make investments and establish new businesses in their countries-of-origin.
- Liesl Riddle, Associate Dean for MBA Programs, George Washington University
Diasporas are increasingly recognized as a source for economic growth. The World Bank estimates that Diaspora groups from developing countries likely hold upwards of $400 billion in savings, and the amount of money that migrant workers send home to developing countries is triple the amount of aid budgets of the rich donor countries. Global remittance flows are estimated to reach $550 billion in 2013 – their highest levels ever.
But remittances, while crucial to helping developing nations grow, are transmitted directly to households rather than to shared community resources. To create sustainable development in emerging economies, remittances alone will not suffice. Strategic investment is needed.
Members of a country’s diaspora tend to be wealthier than its resident citizens, making them more likely to have means to invest in their homeland. And according to George Washington University’s Liesl Riddle, when diaspora members invest in their homelands, they are motivated by more than just profit: “Social and emotional motivations also play a role.” In situations where the project faces great difficulties, diaspora investors generally show greater tenacity and resilience.
In additional to expanding vehicles that have been used successful in the past such as diaspora bonds, many countries and organizations are now working to create new investment vehicles that will tap into this pool of diaspora investment capital and allow for members of the diaspora to easily invest in their countries-of-heritage with small amounts of capital.
Diaspora members often start businesses as well as invest in them. “Diaspora entrepreneurs are uniquely positioned to recognize opportunities in their countries of origin and to exploit such prospects as ‘first-movers’,” notes Kathleen Newland, co-founder of Migration Policy Institute in the book DIASPORAS: New Partners in Global Development Policy. Diaspora entrepreneurship creates businesses, jobs and innovation, in addition to transnational knowledge linkages.
Investment & Entrepreneurship Initiatives
African Diaspora Marketplace (ADM) aims to identify and support entrepreneurs seeking to launch business ventures in Africa that could contribute to long-term economic growth. ADM awardees have access to our partners’ services such as financial resources, research and technical assistance and connections to local African businesses. Visit the ADM partner website to learn more.
The La Idea Business Pitch Competition for Latin American/U.S. business partnerships hosted 16 businesses that pitched their concepts to an audience of industry professionals. Entrepreneurs received grants, prizes, and connections to mentors, as well as to resources that will help them cultivate and grow their innovative businesses. Business partnerships that reached the Final Showcase hail from across Latin America: Chile, Colombia, Costa Rica, Ecuador, Guatemala, Mexico, and Peru. Visit the La Idea partner website to learn more.
The Diaspora Investment Initiative (in development) will allow U.S.-based members of diaspora communities to invest in the development of their country of heritage. Visit Calvert Foundation’s website to learn more. Note: this website is neither an offer to sell nor a solicitation of an offer to buy any securities.
- Mobilizing Next-Gen Diaspora Engagement and LeadershipSunday, 12 October 2014Read More
- DiasporaEngager: A Global Diaspora Engagement Network PlatformFriday, 19 September 2014DiasporaEngager is an online platform for diasporas to connect with one another and opportunities for engagement and career advancement. Read More
- African Diaspora Investment SymposiumTuesday, 15 July 2014Read More
- Milaap: Loan a Little, Change a LotTuesday, 1 July 2014Read More
- Engaging Diasporas in Development through InvestmentThursday, 8 May 2014Read More