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New opportunity for SME development by migrants and diaspora involvement

New opportunity for SME development by migrants and diaspora involvement. Ugo Melchionda International Organization for Migration. UNITED NATIONS ECONOMIC COMMISSION FOR AFRICA Small and medium-sized enterprises, actors of sustainable development Experts Group Meeting March 10 to 12 2008

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New opportunity for SME development by migrants and diaspora involvement

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  1. New opportunity for SME development by migrants and diaspora involvement Ugo Melchionda International Organization for Migration UNITED NATIONS ECONOMIC COMMISSION FOR AFRICA Small and medium-sized enterprises, actors of sustainable development Experts Group Meeting March 10 to 12 2008 Rabat, Morocco

  2. Presentation Aims • My first considerations are aiming at identifying diasporas and migrants as a strategic asset for SMEs development In the framework of economic development in the North Africa region”. • The presentation will illustrate some aspects of the international experience, some of the success cases and learned lessons about diaspora involvement in different home and receiving countries • The presentation will eventually focus on IOM MIDA strategy , Migresssources project in Morocco , IMIS project in Egypt all aiming at developing SME through migration entailment

  3. Main features of contemporary migration • Figures of contemporary migration: 191 million migrants worldwide; on average, 7.5% of the total population in OECD countries • Remittances: USD 276 billion worldwide • Exceeding Official Developments Aide (106,372 billion$ in 2005) and close to Foreign Direct Investment in developing countries ($334 billions): the second largest source of external funding for developing countries: • Qualification of migrants: more qualified than OECD native born (23,6% tertiary education against 19%) sometimes overqualified (in southern Europe and in some countries of northern Europe the percentage of foreign-born workers holding jobs for which they are overqualified is at least twice that observed for the native-born)

  4. Transnationalism, migrants and diasporas • Migration is an important factor on the international political stage. • Involvement of diasporas in countries’ development agendas is an essential factor in ensuring improvement of socioeconomic performance and good governance • “International migrants who, although dispersed from their homelands, remain in some way part of their community of origin” This feature characterizes at the same time Diaspora and the new transnational migration flows. • In order to meet these challenges, Not only the mobility but also the mobilization of the diaspora and its human and financial capacities are integral parts of IOM strategy

  5. Diasporas and receiving countries • The UK Department for International Development (DFID) produced the Indian Country Assistance Plan in consultation with the Indian diaspora and involved the Bangladeshi diaspora in the design of the Bangladesh Country Assistance Plan. • France set up a federation of NGOs to facilitate access to funding for projects for their communities of origin. Bilateral collaboration involving diasporas exists with Senegal, Benin, Congo and Sierra Leone. In 2002-04 France funded 2.6 million euros to mobilize Malians in France to contribute to education and small businesses in Mali.

  6. Diasporas and receiving countries • DFID and the Swedish International Development Agency (SIDA) finance diaspora-led development events and projects, supporting entrepreneurship and small business creation. • The development agencies of Denmark, Sweden, Finland, Norway, New Zealand and Japan support activities engaging diasporas in specific professional sectors or regions. • Australia finances development programmes with a specific interest in remittance flows to Indonesia and Papua New Guinea

  7. Diasporas as Development Partners in Home Countries • South Korea has benefited from the effectiveintegration of diaspora inflows into the local economic growth mechanisms. • Benin, Burkina Faso, Mauritania, Cape Verde, Madagascar and Mali in cooperation with IOM elaborated country strategies in order to match the development concerns of these countries with available resources from the diasporas. • Ethiopia aims to expand private sector activities by engaging the members of the Ethiopian diasporas. • Ghana initiated a Poverty Reduction Scheme promoting SMEs in the agro-industry that explicitly recognizes diasporas as a source of mobilizing funds to finance the anti-poverty strategy.

  8. Diaspora ProfessionalNetworks • Advance Australian Professionals in America is a network funded by Australian businesses in America. • The Global Korean network aims to promote the formation and expansion of decentralized cultural, social, and economic networks among Korean communities overseas. • The worldwide Indian Network and the Reverse Brain Drain Project Thailand target all types of skills, whereas the Hungarian Medical Association of America focuses on medical professionals. • The Ethiopian North American Health Professionals Association (ENAHPA) is a partner for the IOM project MIDA in Ethiopia.

  9. Diaspora Scientific networks • The USA Chinese Association for Science and Technology was established in 1992 with 500 members and counts today 3,000 – • Scientific networks based on university networks: Red de Estudiantes Argentinos en los Estados Unidos, Red Academica Uruguaya, the Ethiopian Knowledge and Technology Transfer Society (EKKTS) partner for IOM MIDA in Ethiopia. • ALAS (Latin American Scientific Association) and ACAL (Academia de Ciencias de America Latina) have been working together since 1987 supported by UNESCO and the French Ministry of Foreign Affairs from 1994 to 2000. • ECOMED is a network of scientists founded in 1995 in Quito, Ecuador, and brings together the Université de Paris V, the Institut Pasteur, the Universidad Central de Quito and the Colombian University Barranquilla.

  10. Business exchanges via Diasporas and Chambers of Commerce • For many countries, diasporas facilitate business exchanges with the support of the chambers of commerce, such as, USA-Bangladesh, UK-Bulgaria. • The Network of Colombian Chambers of Commerce and Sierra Leonean Diasporas Council actually have representatives of their diasporas in the chambers of commerce of the host country • The Caribbean American Chamber of Commerce and Industry, or the Federation of Indian Chambers of Commerce embed diasporas’ activities directly in the business community. • Armenia High Tech Council and Silicon Armenia relate Armenian diasporas in the US to home country projects.

  11. Diasporas Contributions to FDI and Enterprise Creation • Diaspora contributions to FDI, enterprise creation and trade are growing in size and in importance. • In 2002 about half of the US$ 48 billion FDI in China originated from the Chinese diaspora • 19 of the top 20 Indian software businesses were founded ormanaged by professionals from the Indian diaspora: note that software industry has created 400,000 new jobs in India and exported over US$ 6 billion worth of goods and services on 2002 • The Lebanese Business Network links Lebanese entrepreneurs abroad and business opportunities in Lebanon.

  12. Migrants Entrepreneurship in Receiving Countries: Europe • In most of European countries migrants and diaspora have given a great contribution to SMEs development

  13. Migrants Entrepreneurship in Receiving Countries: the Italian Case • In Italy: 225.408 is the overall amount of enterprises carried out by foreign born citizens • 37.531 (+8%) are new SMEs created by foreign born citizens in 2007 • Main nationalities • MOROCCO 42.416 • CHINA 29.771 • ALBANIA 23.253 • SWITZERLAND 16.304 • SENEGAL 13.640 • TUNISIA 10.424

  14. The IOM MIDA Strategy • The MIDA strategy was ratified by the Heads of State of the African Union at Lusaka in 2001 • MIDA was initiated as a demand-driven institutional capacity building programme to facilitate the transfer of vital skills and resources of the African diaspora to their countries of origin. Main aspects of IOM global strategy: • Bottom-up approach: involvement of the diasporas in countries’ development agendas • Decentralized cooperationbetween migrants’ countries of origin and host countries, with the migrants themselves • Productive investments in origin communitiesmobilization of the diaspora and its human and financial capacities

  15. Main Outcomes of Mida Italy Strategy • 200 migrants’ associations recorded • More than 150 SME project proposals received • 5 pilot SME projects (agriculture-Cassava) selected, co-funded and started up in Ghana • Web site for the Ethiopian Diaspora and data base • Start up of GhanaCoop: An enterprise directly promoted and managed by an association of migrants, acting for the development of their country of origin, respecting the principles of economic ethics.

  16. Ghana Senegal New Mida Programme • 5 SME projects, proposed by migrants’ associations or individuals selected in Ghana, 7 in Senegal • Sector: agriculture (cultivation, processing), woodwork and reforestation in Ghana ; agriculture/agroprocessing (5), responsible tourism (1), mixed (agriculture, tourism) in Senegal • SMEs budgets ranging between 45.000 and 130.000 Euros Ghana / 100.000 Euros Senegal • MIDA contribution: between 9.000 and 30.000 Euros (max 30% of the total budget)

  17. Mig-resources Marocco: Migration and Return Resources for Development • Qualified migration without brain drain and temporary or virtual return • 80 qualified migrants working in italy candidates to invest in SME projects in Morocco or cooperation projects selected • 65 completed their training in Italy • 46 (until now) projects evaluated by Foundation Hassan II • 40 (at least) beneficiaries will be assisted to implement their return project via: • Analysis of SME project proposals • Assessment of training needs • Technical assistance (legal, market research ) • Tutoring (including assistance for access to credit)

  18. Lessons learnt: some Measures to Favour Diaspora Investments • Tax exemptions (India and the Philippines Ethiopia) • Bonds, guaranteed by the State Bank for non-resident (India) • Institutions specialized in attracting foreign direct investments of diaspora (Ghana) • Diaspora entrepreneurship programmes channelling diaspora investments (Senegal)

  19. Emerging Consensus on the Development Potential of Migration At the global level: - United Nations High-Level Dialogue on International Migration and Development, September 2006; - Global Forum on Migration and Development, Brussels, July 2007 & Manila 2008; At the regional level: - Regional Consultative Processes, such as Colombo Process, building dialogue, capacity and cooperation; At the interagency level: - Global Migration Group - 10 agencies working together.

  20. Conclusions Now is our chance to turn raised consciousness into action. (Michele Klein Solomon, Director Migration Policy, Research and Communications International Organization for Migration)

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