A new ILO paper on The Contribution of Migrant Organisations to Income-Generating Activities in Their Countries of Origin. Very relevant to the initiative embarked on here, and I would encourage those keeping an eye on that initiative to read the paper. Key conclusions :
Migrant organisations contribute to income-generating activities in their countries of origin through collective donations, collective investments and collective savings. Each type of activity has its respective potentials, challenges and constraints. All three share a mixture of an economic with a philanthropic logic. Income-generating development projects financed through migrants’ collective donations need to be economically profitable for the target group in order to be sustainable. There needs to be a demand for the products produced and the access to the market must be guaranteed. Collective investments need to take the often non-favourable business and investment climate in migrants’ regions of origin into account as well and have to be profitable also for the investors. As not all migrants are able to successfully engage in an entrepreneurial activity, collective savings that are channelled to Micro Finance Institutions (MFIs) and then made available to local entrepreneurs might be a more viable alternative in this case. Migrant time deposits in MFIs seem promising if the safety of the deposited savings is secured but it is still too early for a final evaluation of the related potentials and risks.
Governments and social partners can support all three forms of activity but need to respect their respective logic and design activities and programmes accordingly (c.f. also Moctezuma Longoría/Rodríguez Ramírez 2000: 59). Besides, their activities must also take the characteristics of the migrants and their regions of origin into account. How remittances are used and in which way they can and will be employed for productive projects depends on the local context as remittances are shaped by local social processes, i.e. local actions, relationships and values (Iskander 2005b: 251). There can thus be no universal knowledge of how to use remittances for income generating activities.
Against this background, an exchange of information and experience between migrant organisations, governments and donors seems of utmost importance. More evaluations of existing programmes and projects need to be made and shared. Systematic research needs to been done on the impact of migrant collective activities and the related public interventions, also looking closer at the type and quality of employment created.
The potential of collective remittances should not be overestimated as a panacea for employment generation and development. Migrants’ engagement can not be a substitute for state or private direct investment. Moreover, for governments trying to foster these collective activities, interaction with migrant organisations can be difficult and the transactions costs are high: the organisations are dispersed across recipient countries and their activities are based on voluntary work, therefore reaching operational limits (Word Bank 2002: 17). Nevertheless, targeting migrants and their social networks and organisations, instead of the local households receiving remittances, might be a promising complementary approach in the attempt to increase the use of remittances for income-generating activities (World Bank 2002: 13). Their impact on the local level can be important, effectively complementing state and private direct investments.