USAID Administrator Dr. Rajiv Shah’s Remarks at the 2012 Global Diaspora Forum

Good morning.  Thank you for being here bright and early.  It is excellent to see such an engaged group.

Thank you, Maura.  I’m very proud of what Maura [O’Neill] has accomplished as our Chief Innovation Officer and as the leader for our Innovative Partnerships Group.  I also want to thank Romi Bhatia.  I know you’ve seen and worked with Romi through the year and we’ll be hearing from him in more detail later today.  But Romi, why don’t you put your hand up in case there are folks who don’t know you?

Of course, everyone knows Kris Balderson.  Kris is our guiding light on this subject and is responsible for the Secretary’s Global Diaspora Forum.  I also want to thank other members from the interagency, Mimi and others who are here who really do enrich the quality of what we’re able to do together as a community.

It is an incredible honor to be here and to be here with so many members of diaspora communities from around this country and around the world.  I’m one of you, and so, I’m pleased to be able to join.  In fact, joining you last year and hearing about the businesses you’ve started, the volunteer programs you’ve supported, the innovations you’ve generated and the resources and inspiration that you’ve offered to your original home communities was one of my more personal and inspiring moments of the year. So, thank you for allowing me to participate.

Today, more than 62 million Americans, a full fifth of this nation are first or second generation diaspora community members. That undoubtedly is what makes our country great.  We all collectively represent a vast and diverse community, and we do so much both here and with our home communities and the countries from which we came that we’re excited to now have the opportunity to partner more deeply together to improve on the results we can accomplish when we do work together.

In 2010 alone, remittances from our communities in the United States to developing countries were $95 billion, three times the U.S. official development assistance. Global remittances are now nearly at about 400, $372 billion, growing 12% over 2010.  In fact, in this role, I have the opportunity to work in what we call hotspot countries, countries that are going through deep crises, and we always sit together in the National Security Council and we hear these reports from the Treasury Department and others about the balance of payment situation in country after countries, countries that look like they would lose the confidence of the international financial community or maybe even experience significant capital flight from countries.

So, the conversation usually says there’s been a large-scale political upheaval in a certain place.  I won’t name the particular nations.  We then worry a lot about balance of payment crises or country reserves being dramatically depleted.  We brace ourselves and expect the worst.  The IMF issues all kinds of dire warnings, and then, six months after the fact, we look back and we say well, why didn’t things really fall apart, and the answer time and time again through this last decade has been increased remittance income.

That’s not a public flow of cash or commitment.  As you all know, those remittances increase in those moments because many of you make the determination that it’s precisely in those moments of crisis, of peril, of danger, that you have an opportunity to step in and provide even more comfort and stability to the communities that nurtured you and gave you the opportunity to be here.  So, it is a sense of pride, but I also think we tend to talk a little too much about remittances because it makes it seem like what diaspora communities are good for are dollars or in the case of my family, dollars converted into rupees.  The reality is we know that that’s just a very small part of the way we think about engaging with home countries and communities.

Many of you are role models for your families and your extended families. Many of you have become beacons of hope and aspiration for young people in the communities from which you came, and nearly all of you are connectors, helping educational opportunities and institutions connect to young kids who are smart and seeking those opportunities, helping businesses and financial institutions connect more directly with home communities and working to support entrepreneurship here and abroad.  So, I hope as we work together going forward, we talk about remittances with a sense of deep pride but also talk about what we do with our communities back home in a manner that’s broader and more comprehensive because that’s more representative of what this is all about.

In the past couple of years, we’ve worked hard to change the way we work at USAID to be better partners, to be more innovative and at the cutting edge of ideas and technology and to focus more completely on delivering results in communities where we work.  We call this reform agenda USAID Forward, and I really do believe that now that we’re in the midst of it, we are better suited to part with diaspora communities in the United States for the purpose of supporting efforts abroad than we ever have been.

I had the honor of spending time with the Somali-American community outside of Minneapolis a few times during the last year and during the devastating and tragic drought that led to a famine which led to nearly 35,000 children under the age of 5 actually perishing because they didn’t have enough food to eat and they suffered from the consequences of malnutrition and disease.  I was struck by a number of stories along the way, but most notably, I was struck by the fact that 200 young Somali-Americans and their supporters walked from Minneapolis to St. Paul to raise awareness about the famine.  I was struck by the efforts of the community there to work with banks to allow for remittances to flow despite difficulties with respect to OFAC licensing.

I was struck by some of those community members who actually flew to Somalia, worked with local institutions and NGOs and did all kinds of things to help get aid out to people.  I was struck by our own partnerships with organizations like the American Refugee Committee that did extraordinarily effective work.  Taken together, all of those efforts undoubtedly saved hundreds of thousands of lives.  It’s often the story of loss and suffering is easier to tell than the story of humanity and saving lives and giving people opportunity in the face of darkness, but what that community did in partnership with humanitarian actors like USAID and around the world was really a shining example of what’s possible when we work together.

I recently came back from Yemen where I had the opportunity to similarly visit communities that had actually just been through a military engagement with Al-Qaida and had expelled Al-Qaida from the south of Yemen.  We walked to a local government office surrounded by schools and health clinics that had either been destroyed or even worse had been mined because the terrorists know that when people come back to their communities that’s where they will congregate first.  So, they literally placed bombs in many of these settings.  Today, we’re working together with the Yemen-American community but also with our partners in Yemen to help not only raise funds but demine schools, demine health clinics, make sure that there’s a capacity for those communities to return and rebuild peaceful and more prosperous livelihoods.

In Pakistan, we signed an MOU with the American Pakistan Foundation.  Pakistan was in fact one of the countries I was referring to and I mentioned that we worry about its overall macroeconomic fiscal situation and I’m constantly surprised by the strength of the diaspora communities that step in on behalf of the Pakistani economy one household and one family at a time.

These kinds of partnerships are emblematic of what we can do if we start working more closely together.  We hope to build on these relationships and you’ll hear through the course of today about the global development alliances that we have created with many of your diaspora communities and our aspirations to grow and build more of those types of partnerships.  You’ll hear about our innovative Development Credit Authority, which now works with local banks including two Ethiopian banks to encourage them to lend to members of the Ethiopian diaspora who are willing to launch small or medium sized businesses with ties in Ethiopia.  That type of creative application of resources can generate real growth.  In that particular effort, we’ve had 23 businesses that have received nearly $4.5 million in loans and the borrowers don’t even have to move back to Ethiopia, but they’re creating jobs and economic activity in that country.

Today, I’m pleased to announce two new engagements.  We’re working with Gravitas Capital Advisors to expand an exciting platform that facilitates investment in development projects around the world.  Founded by Eric Guichard, who I believe is here today—Eric, are you here?  Maybe he’ll be here later today, a Ghanaian-American who wanted to expand opportunities for diaspora individuals to pool their capital and support projects back home.  So far, more than a thousand individuals with an average of only about $25,000 each have participated each year.  We’re now adding 50 to 100 investors, new investors, every month.  That kind of model of pooling what we might call in this country angel or early stage venture capital to support entrepreneurship abroad is one of the best forms of connecting American entrepreneurship and values of risk taking and aspiration with the knowledge and creativity and connections that you bring as a diaspora community.

We’re also working with the African Development Bank to support the Migration and Development Fund and help ensure that hard-earned money doesn’t get lost in high transfer costs.  In fact, as you all know, transfers for remittances and other forms can be as high as 12% or 15% in terms of the costs that are taken away from those precious resource flows, but in Latin America thanks to a lot of work with the partnership with the Inter-American Development Bank, they’re now lower than five percent and we believe we can work around the world to help achieve that goal.  It’s in fact a goal that the G20 group of leader countries have set together of decreasing transfer costs in Africa by five percent in five years, which would lead to an increased savings for receivers of $2.5 billion a year.  It’s those types of creative partnerships that can really create change at scale and do it in a way where the results will be observable and felt one household, one family at a time.

So, I want to thank you for the opportunity to be with you.  My compass for this work is my dad because at the end of the day, it was my dad who helped me understand that remittances aren’t just flows of income you send back home.  They’re a personal commitment to where you came from, and they’re, in many sense, the reason you’re here or the reason he was here.  It was also my dad that helped me understand that every one of his extended family members, and I think I’m still going through life trying to track them all down, there are like 50, 60 people in multiple different cities, have reached out to him seeking opportunities for education, for migration, for jobs, for opportunity, for capital to start businesses; for ideas and for connections.

And I’ve always felt that if we could use USAID in some small way to help people like my father, who did put a lot of effort and energy into trying to be responsive to the opportunities that came to him.  He was like a one-man, mini development agency with no staff and no resources, actually, but he managed to try anyway.  If we could do that just a little bit, then we could really help change the world for the better.

One of the things that makes this country great is the fact that there are 62 million of us.  And the fact that so long as we’re the country where people aspire to come to succeed, we’ll be the greatest country in the world.  And so long as we connect that success back to where we came, that’s the embodiment of our humanity and our commitment to ourselves.

So thank you.  We’ll keep working.  We’ll try to get better.  We’ll work in partnership. We hope today results in more of those partnerships.  But please know that our commitment is sincere and we really do want to create the better world by working more closely with all of us.  Thank you very much.  Bye.