I attended the FfD Conference where the Addis Ababa Action Agenda (AAAA) was adopted. Migration and remittances were positively included in the outcome document. However, it will be important to ensure policy coherence and alignment on what have been adopted in Addis and what will be adopted in the SDGs.
The International Conference: Harnessing Migration, Remittances and Diaspora Contributions for Financing Sustainable Development organized by the Global Migration Group (GMG) will be held next Tuesday and Wednesday May 26-27.
We will stream live to viewers around the globe on the UN Web TV website at: http://webtv.un.org.
The hashtag for the conference is #GMGconference. Use this to refer to the event, make your views known and get the latest discussions and comments from the conference.
The potential for mobilizing diaspora savings for financing education, healthcare and infrastructure in countries of origin is massive. Some 170 million international migrants from developing countries send over $400 billion in remittances to their countries of origin. At the same time, migrants also save a part of their incomes in the country of origin, mostly as bank deposits. Migrant savings can be mobilized, through diaspora bonds or non-resident deposits, for financing development efforts in countries of origin.
We make some back-of-the-envelope calculations of diaspora savings using data on migrant stocks, skill composition, and assumptions about migrant earnings. We assume that the high-skilled migrants earn the same as the native workers in destination countries, but that the low-skilled migrants earn less – one-third in the OECD countries, one-fifth in the GCC countries, and one-half in other destination countries.
I went to Bosnia and Herzegovina (BiH) last week to help Oxfam Italia develop advocacy and campaign skills among local civil society organizations. They have their work cut out.
Firstly, there is a crisis of trust between the public and CSOs, which are poorly regulated, often seen as little more than ‘briefcase NGOs’, only interested in winning funding, and under constant attack from politicians. Many CSOs seem pretty disillusioned, faced with a shrinking donor pot and public hostility.
I think there’s a strong case for the CSOs to take the lead in putting their house in order, practicing what they preach on transparency and accountability, and working with government to sort out the legitimate organizations from ones that have registered (there are some 10,000 in the country) but do nothing, (or worse).
Meanwhile, Oxfam is working with some of the more dynamic ones to develop the advocacy and campaign skills of what is still a maturing civil society network (after decades of state socialism, followed by a devastating war, and then an influx of donor cash that had mixed results). Two days of conversation and debate with some great organizations working on everything from disability rights to enterprise development to youth leadership identified some big issues and dilemmas:
Remittances have been the main source of foreign exchange supporting Somalia during the conflict for the last twenty years. A recent IMF fact-finding mission to Somalia found that about $2 billion in remittances are handled by money transfer companies. These companies are located throughout the country and they are providing shadow banking services since there are no licensed commercial banks. Somalis called this system “xawilaad” which is the Somali rendering of the Arabic word “hawala”.
Since the events of September 11, 2001, many countries have adopted stringent Anti-Money Laundering and Combatting the Financing of Terror (AML-CFT) regulations for funds transfers. Several banks in the US (Wells Fargo, US Bank, the TCF bank, and Sunrise Community Bank) and in the UK closed the accounts of money services business to avoid incurring in penalties for not complying with the new regulations. (Note: HSBC was fined $1.9 billion for not complying with money laundering controls in 2012.)
(In observance of the International Migrants Day, Dec 18)
While diasporas by country of origin are typically bundled together in broadly held conceptions, they are not monolithic, and are separated by numerous other characteristics, including socioeconomic status. I was privileged to participate in the South Asia Diaspora Convention 2013 (SADC) that took place in Singapore on November 20-21, 2013, and the stark contrast with the riots that occurred in the Little India district of the city state just a few weeks later, serves as a reminder of these chasms. Strengthening the connections between varied diasporas, and continuing integration efforts that enable all to build a stake in society, will be essential to realizing shared aspirations.
“We have the money, but it’s just not that easy to find the deals back home.” These words, from a Barbadian entrepreneur in Silicon Valley tell the story of a successful tech entrepreneur whose family left the Caribbean almost a generation ago. They moved to the USA and over the years he was able to build a successful business based in Northern California.
The remittances sent home every year by the African Diaspora should create a doorway to still greater opportunities, and the key to this door is financial access. While remittances do impact the living standards of beneficiaries directly, the banks that pay out the remittances month after month should offer recipient families a basic financial package including savings accounts, payment services and small loans for microenterprise. This should facilitate growth from current levels of remittances saved and invested. Leveraging of remittances through financial inclusion is certain to increase their development potential.