Existing diaspora remittance and investment practices form the basis for DRC's work to leverage self-reliance and resilience outcomes in diaspora countries of origin.
Diaspora engagement for economic recovery, resilience and job creation
Diaspora – through remittances, investment and engagement in business – constitute an essential economic lifeline for many households and communities in their countries of origin. While each individual transfer of remittances, or each individual investment, may be small, the combined streams of remittances and diaspora investments often exceed the total international humanitarian or development aid in countries of origin. Remittances are believed to directly touch the lives of 1 billion people on Earth.
Impact of Remittances
DRC recognizes the huge impact these remittances (including diaspora investments) have for livelihoods of households in receiving countries. Remittances support children going to school, they support access to health services, they ensure basic food security, and they support savings and investments in household-based businesses and job creation. Fundraising within diaspora communities are an essential source of funding for local for community initiatives in countries of origin – many schools, boreholes, clinics etc. have been funded by diaspora.
DRC also recognizes the huge commitments, efforts and sacrifices done by the diaspora to keep the flows going. We see diaspora sending money every month, year in and year out, to their relatives in countries of origin, often at the expense of their own economic prosperity, and in spite of numerous hindrances laid out by anti-money laundering and antiterror financing regulations combined with banks practices that force senders to use informal means of transfer.
DRCs role
DRC works to maximize existing positive impact of economic diaspora engagement in countries of origin with a focus on employment and job creation for refugees, IDPs and hosting communities.
ACTIVITIES INCLUDE:
Research
to understand local impact of diaspora economic engagement, the modalities used between diaspora and households and communities, as well as the institutional framework that supports/challenges a productive and positive economic engagement by diaspora.
Encourage productive use of remittances
Share best practices, whereby diaspora have supported relatives to use their remittances to become self-reliant. This is typically done through the use of social media platforms that are used within diaspora networks and between diaspora and relatives.
Topping-up of remittances to encourage productive use. This is a simple set-up whereby recipients of remittances can apply for a top-up to their remittances from DRC, to start up a small business. It works as a tri-partite agreement between the recipient (contributing 10% of the investment), the sender of remittances (40%) and DRC (50%). Apart from the 50% top-up DRC provides training and coaching to the businessperson.
Support towards diaspora businesspeople, who want to partner, or invest, in existing local companies, start up their own business in country of origin, or otherwise engage in ways that can support local job creation.
The activities have so far included training and coaching on entrepreneurship, national legislation and processes for investment/engagement.
Capacity building of local authorities
to constructively reach out to, and facilitate diaspora economic engagement at the local level have included establishment of website, training of authorities, and mapping of existing processes and requirements for business-people to engage have been implemented.
Diaspora engagement at community level
is explored as another type of engagement for DRC to become engaged in. This could include top-up of diaspora contributions to community development initiatives.
In 2023, activities around diaspora economic engagement and support are ongoing in Ethiopia, Lebanon, Tunisia, Kenya and partially also in Mali.
Diaspora Business Engagement in Lebanon
In collaboration with DRC Lebanon and funded by Novo Nordisk Fonden under the CHASE Project, the DRC Diaspora Programme has in 2023 conducted research on diaspora business engagement in Lebanon.
The report documents how the Lebanese and Syrian diaspora contribute to the local economy and job growth in five selected communities in Lebanon. It outlines various business engagement models by the diaspora, detailing their dynamics with relatives in their countries of origin. The research underscores the vital role diaspora engagement plays in livelihoods and job creation in Lebanon. The chosen villages in North and East Lebanon (Burj Al Arab, Wadi Al Jamous, Baalbek, Shmustar, Zahle, and Majdal Anjar) were selected due to their hosting of a significant number of Syrian refugees and aligning with DRC's economic recovery initiatives.
Key findings
1. Investing to support relatives: Diaspora primarily aids relatives in establishing businesses to replace traditional remittances for daily expenses.
2. Two main business initiatives: Diaspora members assist relatives in starting businesses through for-profit or for-charity approaches.
3. Family as business partners: Diaspora engages family members as primary partners for initiating and managing business investments. 4. Familiarity and trust: Trust and familiarity drive business collaborations within the family, considered essential for diaspora financial contributions.
The diaspora is the backbone of Lebanon's economy, contributing significantly with 6.84 billion USD in remittances in 2022, accounting for 33% of the GDP. While the majority of diaspora members send remittances for immediate family needs, others support relatives to establish self-reliant businesses and thus reducing dependency on transfers.
The impact of diaspora engagement in Lebanon
Diaspora business engagement had a clear positive impact on business owners and their families. Respondents attribute their business starts and growth to diaspora support, enabling job creation, improving working conditions, providing for the wider family and empowering women. For the diaspora, these investments ensure family well-being, savings, and retirement in Lebanon.
Research of Diaspora Engagement in Economic Recovery and Job Creation in Lebanon
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Documentation of Diaspora Business Engagement in the Somali Regional State of Ethiopia
In these videos, see how DRC engages with diaspora in the Somali Regional State of Ethiopia to work with regional governance, support local investors, and help make remittances more productive. Special thanks to Abdiaziz Mohamed Layli for his generous support on this project.
