A new initiative was launched this week to spur development with funds from the Diaspora.
The Diaspora Investment in Agriculture [DIA] initiative is co-sponsored by the U.S. State Department and the International Fund for Agricultural Development [IFAD]. The program aims to tap into the hundreds of billions of dollars a year in Diaspora remittances – money sent from foreign workers to their home countries.
The initiative will target Somalia, Angola, Burundi, Ivory Coast, the DRC, Egypt, Liberia, Sierra Leone, Sudan and Tunisia, as well as Afghanistan and Iraq.
“Last year, over $320 billion was sent to developing countries. That’s more than foreign direct investment or [development assistance] combined. That just gives you an idea of the importance that remittances have,” said Pedro De Vasconcelos, coordinator of IFAD’s remittances program.
The money puts food on the table.
“These are private flows. This is money that migrants send back to their families 10 times, 12 times a year in [amounts] of $200, $300. And this is directly to meet the daily needs of their families. So, the impact that these flows have is very important at all levels,” he said.
They money goes directly to families or relatives and does not pass through any government agency.
“This idea of the DIA, Diaspora Investment in Agriculture, is related to the phenomenon of remittances because part of those remittances normally remains – 10 to 20 percent – for investment. And besides the remittances they send, it’s been calculated that the Diaspora itself has accumulated savings of $400 billion. There is a willingness to invest back home. Migrants want to do something about the communities they left behind. And this initiative is actually providing what is missing,” said De Vasconcelos.
What’s been missing has been the mechanism to allow easy, direct investment in particular programs in particular countries. The State Department and IFAD said they are providing that mechanism.
“Supporting the migrants associations, supporting the systems that exist right now, so migrants can invest back in their homeland,” he said.
Investments would include the agricultural sector in rural areas in countries considered fragile or affected by conflict.
De Vasconcelos said, “The Diaspora has been the first to respond in trying to reach their loved ones.” But he said they also are interested in long-term investments to create opportunities back home and ‘it actually can create a more stable situation.”
DIA has a country-based approach and is expected to be operational within a few months. Right now, the initiative will first identify programs needing investment with potential investors.