SHRIDATH RAMPHAL CENTRE FOR INTERNATIONAL TRADE LAW, POLICY & SERVICES
SRC TRADING THOUGHTS – January 2020
Some four million people of Caribbean descent live outside of the region, according to data from the United Nation’s Population Division. Persons of Caribbean descent can be found across the world, but their main hubs are in the United States (US), the United Kingdom (UK), Canada and parts of continental Europe, such as France and The Netherlands. With regard to emigrant stock as a percentage of their national populations, the percentage for Caribbean countries in 2013 varied from as ‘low’ as 11% in the Dominican Republic to as high as 103% for the Commonwealth of Dominica.
In their policy discourse, Caribbean governments increasingly recognise the potential of the region’s sizable diaspora for catalysing trade and development efforts. A constant challenge, however, is how to translate this potential into a reality by strategically mobilizing the diaspora into sustainable development actors.
This first SRC Trading Thoughts for the year explores how the Caribbean can leverage its diaspora to improve its trading prospects and boost opportunities for sustainable development.
The Contribution of the Caribbean Diaspora
The International Organization for Migration (IOM) defines a diaspora as “emigrants and their descendants, who live outside the country of their birth or ancestry, either on a temporary or permanent basis, yet still maintain effective and material ties to their countries of origin”.
A World Bank study of 2013 on the business and investment interests of the Caribbean Diaspora described the Caribbean diaspora in general as “a well-educated and affluent group of individuals, who have great potential to make valuable contributions to the Caribbean’s economic development”.
Many Caribbean people in the diaspora maintain links back home and already contribute in some form or fashion to development in the region. For example, the same World Bank (2013) study found that 70% of the Caribbean diaspora belongs to a formal or informal organization in their resident country or back in the Caribbean. Several Caribbean diplomatic missions, particularly in major cities with Caribbean diasporas, host events and other activities for their nationals living there.
At the household level, the “barrels” and other remittances Caribbean migrants send home to loved ones sustain households and abate poverty. At the macro-level, remittances to GDP ratios for some Caribbean countries are quite high, such as Haiti (39%), Jamaica (16%) and the Dominican Republic (8%).
On the macro-level, pioneering research by Wood & Watson (2015) on the use of migrant remittances in Barbados found that over the three decades from 1990 to 2010, remittance flows proved to be a valuable resource flow to Barbados and that between 1980-1990s they were the leading capital flow. Similar results were found by a 2010 survey conducted by the Bank of Jamaica which showed that remittance flows to Jamaica became an important source of foreign exchange and balance of payments support in the last two decades.
However, the contribution of the diaspora goes beyond remittances. Caribbean migrants often return to the region as tourists to visit family and friends, for holidays and festivals, contributing to tourist arrivals and spend. They also often encourage their friends to visit their homeland. Demand by Caribbean migrants for nostalgic goods from their homeland, such as rum, agricultural produce, condiments and seasonings, help facilitate trade between their homeland and host countries.
Caribbean migrants also invest in the regional credit union movements, real estate, some financial instruments and establish and invest in start-up businesses back home. They also engage in philanthropic endeavours by making donations to their alma maters and charities, and establishing scholarships in their home countries. Further, persons in the diaspora also bring invaluable skills, know-how and networks.
One of the challenges developing countries face in seeking to achieve the Sustainable Development Goals (SDGs) is the large financing gap estimated to be US$ 2.5 – 3 trillion per year according to the UNCTAD World Investment Report, 2014. Research conducted by the Commonwealth Secretariat (2017) on how investment by Commonwealth Countries’ diasporas could help finance the achievement of the SDGs in those countries, estimated the baseline diaspora investment potential for Commonwealth countries to be approximately US$73.2 billion per annum. Diaspora investment, therefore, could be a critical contributor to SDG achievement.
How can Caribbean Governments engage their diasporas more meaningfully?
Traditionally, Caribbean government’s engagement with their diasporas has been largely ad hoc and informal. However, this is changing as policymakers increasingly recognize the development value of their national diasporas. Jamaica, for instance, has a long history of diaspora engagement, including its regular biennial Diaspora conferences since 2004.
To encourage persons to invest, governments and other actors must establish a relationship of trust with the diaspora, as well as formalize and sustain engagement efforts. Below are some ways in which the region has been doing this:
Diaspora Engagement Policies and Action Plans
A broad-based diaspora engagement strategy and action plan linked to the country’s national development plan or strategy is needed. Jamaica, Dominica, Suriname and Guyana, for example, have drafted national diaspora engagement strategies. Trinidad & Tobago specifically includes the diaspora as part of its Vision 2030: National Development Strategy. Suriname has created a diaspora portal (diaspora.sr) as part of the Suriname Diaspora Project.
Institutionalisation of Diaspora Relations
IOM (2013) found over 400 institutions in 56 countries globally which have policies and programs for directly engaging their diasporas and divide them into six types: those which function at a ministry, sub-ministry, national, or local level; are part of a consular network; or are a quasi-governmental institution. Dominica and Haiti, for example, have ministries with a diaspora affairs portfolio. Jamaica has the Global Jamaica Diaspora Council, the principal organ of its National Diaspora Strategy. Institutions for diaspora relations help to change engagement from being ad hoc into a more formal process.
Special Programmes targeting the diaspora
Several Caribbean countries have held diaspora conferences, as well as special programmes targeting the diaspora. The Barbados government has, for example, launched a year-long homecoming initiative in 2020 to invite all Barbadians living in the diaspora to visit their homeland this year, with the aim of mobilising the diaspora for contributing to Barbados’ economic recovery and transformation. A similar initiative was held by Scotland in 2009 “Homecoming Scotland 2009” and again in 2014 “The Year of Homecoming”. An independent study commissioned by VisitScotland found that Scotland’s Year of Homecoming in 2014 attracted 326,000 visitors and generated £136m for the Scottish economy.
Political and Legal Rights
Caribbean countries generally extend some political and legal rights to their diasporas by providing for dual citizenship and citizenship via descent if born to a parent who is a national. Barbados has, further, indicated it will amend its immigration legislation to allow for persons with a Barbadian grandparent or great-grandparent to qualify for Barbadian citizenship. Suriname has created the status of “Persons of Surinamese Origin (PSA)” in 2014 for persons in the Surinamese diaspora with parents or grandparents born in Suriname.
Better Statistics and Skills Mapping
Evidence-based diaspora policy making and targeting will require better statistics on the Caribbean diaspora, including a thorough mapping of its geographical distribution as well as a skills database. A few Caribbean countries like Haiti and Suriname have launched diaspora mapping exercises.
Removing barriers to diaspora engagement and making the fundamentals right
Similarly, a diaspora engagement strategy will fail to yield the desired results if the fundamentals in the home country are not in order. Macroeconomic and social instability, weak legal framework and poor enforcement, difficulties of vetting potential partners and conducting due diligence were among the concerns identified as barriers to diaspora investment in a 2016 World Bank Study on the potential economic role of the Caribbean diaspora.
Despite some reforms, ease of doing business remains a problem in many Caribbean countries, evidenced by our low scorings overall in the World Bank’s Ease of Doing Business rankings and the World Economic Forum’s Global Competitiveness Index, where included. A functioning legal system, efficient and responsive institutions and a conducive business climate are indispensable for fomenting trust and encouraging members of the diaspora to invest and do business in their home country.
Greater mobilization of the diaspora for development will require, therefore, removing obstacles to diaspora involvement in national development. Unnecessary bureaucratic red-tape can quickly turn a desire to give back into a frustrating exercise. Governments can also try to make remittance flows easier by investing in Fintech options. It would also be useful to ascertain from the diaspora what barriers they are encountering when seeking to invest and do business in the home country, and use this information to craft diaspora-friendly strategies.
Alicia Nicholls, B.Sc, M.Sc, LL.B. is a Trade Researcher with the Shridath Ramphal Centre for International Trade Law, Policy & Services of The University of the West Indies, Cave Hill.