The role of Diaspora in their countries of origin: the paradigm of business, investment & industry
AimThis panel discussion will try to examine the role of Diaspora in promoting business, Investment and Industry in their countries of origin and the impact this may have on influencing the economic and industrial strategies there.
BackgroundThe present economic situation of third-world nations is in part the result of low levels of development, their backward industry, and outdated agricultural methods. According to UN documents, at present, most of the global research and development effort is devoted to military purposes or the commercial objectives of large corporations. Little of this is of direct relevance to conditions in developing countries. Developing countries therefore have to work, individually and together, to build up their technological capabilities. Recall that all the developing countries that managed to get out of the poverty trap and significantly improved the standard of living of their citizens; such as the South East Asian countries, have adopted a clear industrialisation path as part of their development models (Dafa’Alla et al 2016). Likewise, to get out of the poverty zone, Under-developed countries need to adopt an integrated sustainable development plan, in which industry, business and investment represent the pivotal point. An injection of heavy industrialisation to their economy, with particular focus on higher value chain products for export, is required in order to improve the trade balance and lift the country out of the poverty zone. According to OECD, poor and struggling countries will need national development strategies which respond to global macroeconomic trends to ensure that they thrive in a global economy. And this is where the role of Diaspora comes into play. According to the Migration Policy Institute (MPI), Diaspora groups may have a role to play in peace and reconstruction process, and governments that host them should carefully consider encouraging the involvement of those who can be seen as honest brokers. For many countries, the Diaspora are a major source of foreign direct investment (FDI), market development (including outsourcing of production), technology transfer, philanthropy, tourism, political contributions, and more intangible flow of knowledge, new attitudes, and cultural influence. This emphasises the potential role of Diaspora in promoting business leading to poverty reduction in their own countries of origin, provided their huge resources and impact can be utilised intelligently and effectively. There are different models for how countries of origin have elected to benefit from their respective Diaspora. For example, 26% of the Jordanian GDP comes directly from Diaspora remittances. China, India and Taiwan, however, focuses less on remittances in favour of pursuing three very different business-oriented models in seeking Diaspora contributions to development. China has long worked to attract direct investment and open trade opportunities through overseas Chinese communities. India’s recently launched Diaspora policy is multi-pronged, pursing direct investment, portfolio investment, technology transfer, market opening and out-sourcing opportunities. Taiwan, on the other hand, has pursued a “brain trust” model, focused on attracting human capital from the Diaspora. While the Chinese and Indian models are attractive from business and investment perspectives, the Taiwanese model is of special interest as it is the key to building up a technological capability as part of the national development strategies in the under-developed countries of origin of the Diaspora. But, can these models be universally applicable to the Third World?
In this panel discussion, we want to address specific questions regarding the under-developed state of the Third World and the role of promoting business, investment and industry in leading to sustainable development and mechanism for poverty reduction, if at all possible. These questions are:
- What is the role of industry, business and investment strategies in improving the economic situations and improving the living conditions in the Third World?
- What is the role of the Diaspora in this? Are they part of the problem or the solution?
- Can Diaspora have a role in promoting business, investment and industrial sectors benefiting from their external exposure and expertise?
- How can this role of Diaspora be integrated in in national development plans, if at all possible? Should host countries of Diaspora encourage this role and how? Are there any legal issues to be promoted or overcome to ensure positive outcome?
- What can we recommend as a “winning formula” or “Diaspora Model” to promote business, investment and industry in the under-developed countries and hence get the Third World out of the poverty zone? Is this “universal” or “local”?