By Tarun GeorgeEarlier this month in New York City, a panel of Jamaican trade officials and ambassadors came together to once again make the case for increased investment in the Caribbean island nation. What was different was their audience. Instead of focusing on American executives as usual, this time they targeted the Jamaican business elite, living and working in the US. In other words, they were leveraging potentially their greatest asset outside their own country: the national diaspora.
The Example of Indians
It’s difficult to overstate the potential positive benefits of overseas diasporas to their home countries. “As a national government, how you leverage the migrants living in other countries has tremendous implications,” said Fabrizio Opertti, Chief of Trade and Investment at the Inter-American Development Bank. “It means new ideas, new contacts in the companies in which they work, new opportunities when they decide to come back home, and new practices and ideas which they’ve seen in the countries they migrated to.” Over the years, diasporas have been particularly useful in driving foreign direct investment (FDI) back to their home countries. “For example, the Indians who migrated and set up in Silicon Valley have been responsible for much of the FDI into India since the 90s.”
Opertti did caution against labelling overseas diasporas as the sole cause of successful FDI examples like this. But the IDB is engaged in research around what he called Dimensions Driving Diasporas (DDI), to find out how exactly diasporas grow and contribute to their home economies. “We’re gathering data on a few DDI projects in the Trinidad and Tobago animation sector, and also programs in El Salvador and Mexico,” he said.
Diaspora success stories are well and good, but how can they be encouraged and taken further? As Opertti says, “The challenge for the IDB is to prevent these individual cases from remaining isolated occurrences, but to create the platforms that facilitate this movement of ideas and resources from the diasporas.”
With that in mind, the IDB is currently working on several new diaspora initiatives, specifically with the goal of services realization:
The Colombian Global Services Loan Program: Recently approved by the IDB executive board, and slated to begin operations this year, this is a program that deals specifically with mapping the Colombian diaspora abroad, and match-making for business partnerships and collaborations. This initiative would be focused on the Colombian services and investment sector. Last year, the IDB approved a $12 million loan to help Colombia expand its services trade globally.
Online Diaspora Marketplace: Having just passed the approval phase, this project aims to create a regional marketplace of diaspora resources and business ideas, for the development of the Central American nations. According to Opertti, the IDB is collaborating with the investment promotion agencies of several of these countries in order to implement the program.
Latin American International Diaspora Engagement Alliance (La Idea): A new initiative by the US State Department, La Idea seeks to connect US Hispanic and Latin American entrepreneurs in a wide variety of sectors. The IDB works with this program specifically in international investment promotion.
How to Leverage?
There is a huge role for the investment promotion agencies and ministries of commerce of LatAm countries in building partnerships with overseas diasporas. Opertti said he sees an increasing willingness on the part of these countries to engage nationals living abroad. Jamaica, mentioned earlier, is one example of a proactive approach. In fact, Jamaica is hosting a Diaspora Marketplace Expo in Montego Bay in mid-June, with the specific purpose of showcasing new business ideas to conference attendees, many of whom will be part of the Jamaican diaspora living in the US.
“The IDB provides resources to countries, but they need to do outreach to their diasporas,” said Opertti. “They must identify who the qualified nationals abroad are, provide them with opportunities through meetings and events, and help them consider their home countries as alternatives for investment.”
Possibly the most obvious mistake in this area, according to Opertti, is the temptation to use a blanket approach and tackle the diaspora as a whole. Instead, it’s critical to use a sector-specific approach, even within the services industry. The KPO diaspora for example, is very different from the ITO diaspora. This is where the civil society of a country can be very useful. According to Opertti, there is a significant role for non-profit organizations or trade associations, in developing targeted relationships with diasporas along specific lines of the services industry.