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The ECA diaspora can contribute to development

Sudharshan Canagarajah's picture

At approximately 46 million, the diaspora population originating from the ECA (Europe & Central Asia) countries is the largest of all the development regions. Over ten percent of the population of the ECA countries currently lives outside their home countries, a much larger share than the 3 percent of the world’s population who are defined as migrants. Even if some immigrants choose to fully assimilate in the recipient countries, there is still a significant number who maintains active links to their countries of origin. The flow of remittances in ECA coming from this Diaspora is also quite significant, more than 30 percent of GDP in some ECA countries. This financial contribution has led to a dialogue on potential Diaspora Bonds to attract much needed investment for capital projects (see Dilip Ratha’s work).

However, there are other good examples and much more potential for other kinds of contribution that the diiaspora can make:

  • Advocacy:. The influence of Diaspora with government, media, private sectors, and other prominent groups in both countries of origin and of settlement is well documented (e.g. Voice After Exit: Diaspora Advocacy by K. Newland
  • Entrepreneurship: Bringing back the skills, new technologies, lessons learned in other countries is equally important if not more than sending home cash. (e.g. Yvegney Kuznetsov, Competitiveness Foundation of Armenia).
  • Voluntary financial contribution and advice: These include, for example, rural development projects in Philippines, Sri Lanka, Bangladesh or Central European University graduates can volunteer to provide advisory assistance to potential students from FSU countries.
     

The ECA diaspora members in high-income OECD countries are highly educated, have higher incomes than the native population, and are more than proportionally represented in management and professional occupations, thus making them well-positioned contribute to their home countries. There are multiple ways in which Diaspora can turn “brain drain” into “brain gain”.

However, weak governance and non transparent business environment in many ECA countries have inhibited the full potential of the Diaspora to be realized. National governments need to make an effort to reach out to their compatriots abroad. This can range from institutionalizing migrant protection to facilitating a forum for the diaspora to exchange lessons and best practices from other countries.

The size, composition and destinations of the ECA diaspora populations demonstrate that differentiated country-by-country policies are needed. For some countries in the region, facilitating remittances is the goal, while for others return or engagement of highly-skilled is the primary policy.

More research is needed to understand the characteristics of the ECA Diaspora population such as levels of education, income levels, family composition, legal status, duration of time abroad, geographic distribution of destination countries, and entrepreneurship which have implications for their ties to their home countries and ability to contribute to development. There are a variety of ways the Bank can assist with strengthening diaspora ties.

Some ECA countries have well-developed diaspora policies and institutions dedicated to diaspora relations but most are just developing policies and erecting the necessary institutional infrastructure.
 

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