DIASPORA for DEVELOPMENT in AFRICA Sonia Plaza and Dilip Ratha, Editors DIASPORA FOR DEVELOPMENT IN AFRICA DIASPORA FOR DEVELOPMENT IN AFRICA Sonia Plaza and Dilip Ratha Editors © 2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved 1 2 3 4 14 13 12 11 This volume is a product of the staff of the International Bank for Reconstruction and Devel- opment / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. Library of Congress Cataloging-in-Publication Data Diaspora for development in Africa / edited by Sonia Plaza and Dilip Ratha. p. cm. Includes bibliographical references and index. ISBN 978-0-8213-8258-5 — ISBN 978-0-8213-8619-4 1. African diaspora—Economic aspects. 2. Africans—Foreign countries—Economic aspects. 3. Economic development—Finance—Africa. 4. Africa—Emigration and immigration— Economic aspects. 5. Emigrant remittances—Africa. 6. Entrepreneurship—Africa. 7. Migration for Development in Africa (Program) I. Plaza, Sonia. II. Ratha, Dilip. DT16.5.D536 2011 304.82096—dc22 2011013214 ISBN: 978-0-8213-8258-5 eISBN: 978-0-8213-8619-4 DOI: 10.1596/978-0-8213-8258-5 Cover illustration by: Diana Ong/SuperStock by Getty Images Cover design by Drew Fasick Contents Foreword xi Acknowledgments xiii Contributors xv Abbreviations xxiii OVERVIEW Harnessing Diaspora Resources for Africa1 Sonia Plaza and Dilip Ratha 1 Diasporas of the South: Situating the African Diaspora in Africa 55 Jonathan Crush 2 Another Link in the Chain: Migrant Networks and International Investment 79 David Leblang 3 Return Migration and Small Enterprise Development in the Maghreb 103 Flore Gubert and Christophe J. Nordman 4 Diaspora Bonds: Tapping the Diaspora during Difficult Times 127 Suhas L. Ketkar and Dilip Ratha v vi CONTENTS 5 African Diaspora Associations in Denmark: A Study of Their Development Activities and Potentials 145 Lars Ove Trans and Ida Marie Vammen 6 The Financial Consequences of High-Skill Emigration: Lessons from African Doctors Abroad 165 Michael A. Clemens 7 France’s Codevelopment Program: Financial and Fiscal Incentives to Promote Diaspora Entrepreneurship and Transfers 183 Marion Panizzon 8 The Migration for Development in Africa Experience and Beyond 231 Ndioro Ndiaye, Susanne Melde, and Rougui Ndiaye-Coïc 9 Reinforcing the Contributions of African Diasporas to Development 261 Chukwu-Emeka Chikezie 10 Migration and Productive Investment: A Conceptual Framework 283 Valeria Galetto Boxes 1 Defining Diasporas 3 2 The Role of Embassies in Enabling Diasporas 35 5.1 Danish Senior Citizens 150 5.2 The Ghanaian Female Chief 159 8.1 Different Modalities of Transfer of Intellectual and Socioprofessional Resources 237 8.2 MIDA Great Lakes – Enhancing the Capacity of the University of Goma 241 8.3 How the Democratic Republic of Congo and Rwanda Include the Diaspora and Migration Communities in Country Policies and Action Plans 249 CONTENTS vii Figures 1 Top Sources of African Immigrants in the United States, 20105 2 Migration and Trade Go Hand in Hand9 3 Investments in Business and Housing Funded by Remittances from Within and Outside Africa 11 1.1 Official Levels of Migration, South Africa, 1990–2002 61 5.1 Types of Development Activities 152 6.1 Percentage of African-Born Doctors in the United States Who Received Their Medical Doctor Degrees in Their Countries of Birth 169 6.2 Time Elapsed between Receipt of Doctor of Medicine Degree and Arrival in Canada or the United States, for Those Who Received Their Doctor of Medicine Degree in Their African Country of Birth 170 6.3 Annual Remittances to Country of Birth for Physicians Born in Africa, Residing in Canada and the United States in 2006, Including Nonremitters 172 8.1 MIDA Framework 232 8.2 Profiles of the 1,100 Candidates Registered in the MIDA Great Lakes Database 235 10.1 Migration Prevalence Ratio, San Juanico and Xhániro, 1950–2005 309 10.2 Share of Avocado Producers among Household Heads, San Juanico, 2005 310 Tables 1 The Potential for Diaspora Savings in African Countries, 2009 15 2 Countries Permitting and Prohibiting Dual Citizenship for Adults 25 1.1 Cumulative Global Migration Flows, 2005 57 1.2 Global African Migrant Stock by Region 58 1.3 Migrant Stock in South Africa, 2001 61 viii CONTENTS 1.4 SADC Countries of Origin of Migrants to South Africa, 2001 62 1.5 Variable Estimates of Southern African Development Community Migrant Stock in South Africa 63 1.6 Demographic Profile of African Diaspora in South Africa, 2001 64 1.7 Regional Distribution of South African Diaspora 66 1.8 Major Countries of South African Diaspora 66 1.9 Phases of South African Immigration to Australia, Canada, and New Zealand 67 1.10 Health Professionals in the South African Diaspora, Circa 2000 69 1.11 Comparing the Diasporas 70 1.12 Use of Remittances in Countries of Origin 72 2.1 Effect of Organizations, Institutions, and Information on Cross-Border Investment 88 2.2 Endogeneity 93 2.3 Information and Heterogeneous Investments 95 2.4 External Voting Rights 96 3.1 Overseas Destination and Mean Duration of Stay of Returnees 107 3.2 Characteristics of Return Migrants 109 3.3 Characteristics of Return Migrants by Employment Status 112 3.4 Employment Status during Migration, by Last Country of Immigration 116 4.1 Comparison of Israeli and Indian Diaspora Bonds 132 4.2 Countries with Large Diasporas Abroad 135 5.1 Development Activities in Relation to Membership Composition 154 5.2 Funding Sources in Relation to Membership Composition 154 5.3 Typology of the Associations Involved in Development Activities 157 7.1 French Migration Pacts 204 9.1 Correlating Productivity Drivers with Forms of Diaspora Capital 270 CONTENTS ix 9.2 Pros and Cons of Integrated Compared to Dual Diaspora Engagement Strategies 273 9.3 Specific Policies and Initiatives to Harness African Diaspora Resources 274 9.4 Strategies for Matching Diaspora Investors and Entrepreneurs with Possible Actions 276 10.1 Studies Reporting a Significant Association between Migration and Productive Investment in Migrant-Sending Regions 290 10.2 Studies Reporting a Limited Association between Migration and Productive Investment in Migrant-Sending Regions 295 Foreword The diaspora of developing countries can be a potent force for development for their countries of origin, through remittances, but also, importantly, through promotion of trade, investments, research, innovation, and knowl- edge and technology transfers. This book brings relevant experience from both developed and developing countries to bear on issues confronting today’s governments in linking with their diaspora. The chapters present different approaches used by countries that have tried to maximize the pos- sible gains from migration by engaging more comprehensively with differ- ent diaspora groups and individuals. A sizable amount of research has been conducted on the topic of migra- tion over the last several years. Early studies on immigration policy assumed that migrants leave their countries, settle in a new country, start integrating in their new society, and abandon their ties with their country of origin. Today, however, it is possible for immigrants to remain con- nected with—and give back to—their native countries while residing abroad, thus diminishing their loss of identity and separation from their countries of origin. There has been a shift in the discussion from seeing the emigration of skilled people as a loss, to seeing skilled migration as an opportunity to get remittances, trade, investment projects, and new knowledge. China; India; Israel; Japan; the Republic of Korea; and Taiwan, China are examples of xi xii FOREWORD economies that have tapped into their diasporas as a source of knowledge. In addition, there has been a new emphasis on including both skilled and unskilled migrants as contributors to host and home country development. To expand our knowledge about diaspora, the World Bank organized an International Conference on Diaspora and Development, held on July 13–14, 2009, in Washington, DC. The conference aimed to consolidate research and evidence on these issues with a view to formulating policies in both sending and receiving countries. The chapters in this volume pres- ent the findings of 10 papers chosen out of 32 presented at the conference. Some African countries are pursuing policies to develop links with Africans abroad, either to encourage them to return or to use their skills, knowledge, or financial capital to foster African development. The book discusses concrete examples of diaspora initiatives that are being imple- mented in Africa.