How can countries leverage their diaspora for economic development?

Countries can leverage their diaspora for economic development through remittances, investments, knowledge transfer, and tourism promotion.

Remittances are a significant way diaspora contribute to their home country's economy. These are funds sent by overseas workers back to their families in their home country. According to the World Bank, remittances to low and middle-income countries reached $529 billion in 2018, larger than foreign direct investment flows and official development assistance. These funds can stimulate consumption, increase investments in education and health, and reduce poverty levels. However, high transaction costs can limit the benefits of remittances. Therefore, countries should work with international partners to reduce these costs.

Investments from the diaspora can also boost economic development. Diaspora members often have a strong emotional connection to their home country and may be more willing to invest there than foreign investors. They can invest in various sectors, such as real estate, infrastructure, and small and medium-sized enterprises. To attract diaspora investments, countries can offer incentives such as tax breaks, simplified investment procedures, and guarantees against political risks. They can also organise diaspora investment fairs and establish diaspora investment funds.

Knowledge transfer is another way diaspora can contribute to economic development. Many diaspora members have acquired skills, expertise, and networks in their host countries that can be valuable for their home countries. They can transfer this knowledge through various means, such as mentoring, consulting, teaching, and research collaborations. To facilitate knowledge transfer, countries can establish diaspora professional networks, organise diaspora skills databases, and offer incentives for diaspora members to return home temporarily or permanently.

Finally, diaspora can promote tourism in their home countries. They can act as ambassadors, recommending their home countries to their friends, colleagues, and business partners in their host countries. They can also invest in the tourism sector, for example, by opening hotels, restaurants, and travel agencies. To leverage diaspora for tourism promotion, countries can offer incentives such as tax breaks and simplified business procedures. They can also involve diaspora in tourism marketing campaigns and organise diaspora tourism fairs.