How Diasporas Can Help The Motherland
by Sam Vaknin, Ph.D.
The following steps are considered to be the "minimum package" in the
strengthening of relationships between countries of origin and national
1. The granting to the diaspora of unlimited or, at the very least,
restricted voting rights in the Motherland (e.g., Macedonia)
2. The institutionalized involvement of political structures representing
the diaspora in the politics of the Motherland (e.g., Israel) and vice
versa (for instance, the Jewish Congress and the Jewish Agency).
3. Holding common sports events (e.g., the Maccabia or Maccabead Games
as a Jewish Olympiad with participants from all over the world); the
exchange and transfer of students and professionals between the diaspora
and the Motherland.
4. The establishment of a fund for the purchase of land, the restoration
of national treasures to the Motherland, reforestation and preservation
of nationally or historically significant sites (e.g., the Jewish Keren
Hayesod and Keren Kayemet le-Israel)
5. The solicitation of donations, scholarships, and sponsorships from
wealthy individuals in the diaspora
6. Emphasis on cultural activities and the promotion of the national
language (e.g., various Francophone activities by France)
7. Selling bonds and stocks exclusively to the diaspora (e.g., the
Israeli Bonds) and the creation of various investment funds and vehicles
to encourage greater economic involvement of the diaspora in the Motherland.
8. Leveraging the nation's common history, religious affiliation, and
cultural roots to further national cohesion and political lobbying and
9. Encouraging remittances with the implementation of a special, lenient
tax regime, the issuance of remittance-bonds, and by providing foreign
investors with tax holidays, one-stop-shop facilities, business incubators,
and direct access to decision makers.
10. Fostering knowledge-based networks of local and foreign (diaspora-based
exapts) businessmen, scientists, and experts; forming migrant associations
to share contacts and business opportunities and otherwise socially
network; encouraging returning citizens and providing them with tax
concessions, loans, and employment opportunities (e.g., Israel, China,
Venezuela, Uruguay, Ethiopia).
Barry Chiswick and Timothy Hatton demonstrated ("International Migration
and the Integration of Labour Markets", published by the NBER in its
"Globalisation in Historical Perspective") that, as the economies of
poor countries improve, emigration increases because people become sufficiently
wealthy to finance the trip.
Poorer countries invest an average of $50,000 of their painfully scarce
resources in every university graduate - only to witness most of them
emigrate to richer places. The haves-not thus end up subsidizing the
haves by exporting their human capital, the prospective members of their
dwindling elites, and the taxes they would have paid had they stayed
put. The formation of a middle class is often irreversibly hindered
by an all-pervasive brain drain.
Politicians in some countries decry this trend and deride those emigrating.
In a famous interview on state TV, the late prime minister of Israel,
Yitzhak Rabin, described them as "a fallout of the jaded". But in many
impoverished countries, local kleptocracies welcome the brain drain
as it also drains the country of potential political adversaries.
Emigration also tends to decrease competitiveness. It increase salaries
at home by reducing supply in the labour market (and reduces salaries
at the receiving end, especially for unskilled workers). Illegal migration
has an even stronger downward effect on wages in the recipient country
- illegal aliens tend to earn less than their legal compatriots. The
countries of origin, whose intellectual elites are depleted by the brain
drain, are often forced to resort to hiring (expensive) foreigners.
African countries spend more than $4 billion annually on foreign experts,
managers, scientists, programmers, and teachers.
Still, remittances by immigrants to their relatives back home constitute
up to 10% of the GDP of certain countries - and up to 40% of national
foreign exchange revenues. The World Bank estimates that Latin American
and Caribbean nationals received $15 billion in remittances in 2000
- ten times the 1980 figure. This may well be a gross underestimate.
Mexicans alone remitted $6.7 billion in the first 9 months of 2001 (though
job losses and reduced hours may have since adversely affected remittances).
The IADB thinks that remittances will total $300 billion in the next
decade (Latin American immigrants send home c. 15% of their wages).
Official remittances (many go through unmonitored money transfer channels,
such as the Asian Hawala network) are larger than all foreign aid combined.
"The Economist" calculates that workers' remittances in Latin America
and the Caribbean are three times as large as aggregate foreign aid
and larger than export proceeds. Yet, this pecuniary flood is mostly
used to finance the consumption of basics: staple foods, shelter, maintenance,
clothing. It is non-productive capital.
Only a tiny part of the money ends up as investment. Countries - from
Mexico to Israel, and from Macedonia to Guatemala - are trying to tap
into the considerable wealth of their diasporas by issuing remittance-bonds,
by offering tax holidays, one-stop-shop facilities, business incubators,
and direct access to decision makers - as well as matching investment
Migrant associations are sprouting all over the Western world, often
at the behest of municipal authorities back home. The UNDP, the International
Organization of Migration (IOM), as well as many governments (e.g.,
Israel, China, Venezuela, Uruguay, Ethiopia), encourage expatriates
to share their skills with their counterparts in their country of origin.
The thriving hi-tech industries in Israel, India, Ireland, Taiwan, and
South Korea were founded by returning migrants who brought with them
not only capital to invest and contacts - but also entrepreneurial skills
and cutting edge technologies.
Thailand established in 1997, within the National Science and Technology
Development Agency, a 2.2 billion baht project called "Reverse the Brain
Drain". Its aim is to "use the 'brain' and 'connections' of Thai professionals
living overseas to help in the Development of Thailand, particularly
in science and technology."
The OECD ("International Mobility of the Highly Skilled") believes
that: "More and more highly skilled workers are moving abroad for jobs,
encouraging innovation to circulate and helping to boost economic growth
around the globe."
But it admits that a "greater co-operation between sending and receiving
countries is needed to ensure a fair distribution of benefits".
The OECD noted, in its "Annual Trends in International Migration, 2001"
that (to quote its press release): "Fears of a "brain drain" from developing
to technologically advanced countries may be exaggerated, given that
many professionals do eventually return to their country of origin.
To avoid the loss of highly qualified workers, however, developing countries
need to build their own innovation and research facilities ... China,
for example, has recently launched a program aimed at developing 100
selected universities into world-class research centers. Another way
to ensure return ... could be to encourage students to study abroad
while making study grants conditional on the student's return home."
The key to a pacific and prosperous future lies in a multilateral agreement
between brain-exporting, brain-importing, and transit countries. Such
an agreement should facilitate the sharing of the benefits accruing
from migration and "brain exchange" among host countries, countries
of origin, and transit countries. In the absence of such a legal instrument,
resentment among poorer nations is likely to grow even as the mushrooming
needs of richer nations lead them to snatch more and more brains from
their already woefully depleted sources.
Immigrants and the Fallacy of Labour Scarcity
The Labour Divide - II. Migration and Brain Drain
Sam Vaknin is the author of Malignant Self Love - Narcissism
Revisited and After the Rain - How the West Lost the East. He served
as a columnist for Global Politician, Central Europe Review, PopMatters,
Bellaonline, and eBookWeb, a United Press International (UPI) Senior
Business Correspondent, and the editor of mental health and Central
East Europe categories in The Open Directory and Suite101.
Mr Vaknin's web site is at http://samvak.tripod.com