Remittances and Diaspora Resources
Since its inception, KNOMAD has spearheaded research and advocacy on harnessing remittances and other resources for the development of origin countries. More recently, KNOMAD prepared the background brief for the preparatory sessions of the GCM, and many of the recommendations of the paper are included in the GCM objectives 19 (create conditions for migrants and diasporas to fully contribute to sustainable development in all ocuntries) and objective 20 (Promote faster, safer and cheaper transfer of remittances and foster financial inclusion of migrants).
On remittances, this Thematic Working Group will continue its work on:
- Reducing remittance costs through research analysis and evidence base of the remittance prices, interoperability, opening of markets and new technologies (SDG 10.c.1 reducing remittance costs)
- Inform country and regional strategies on regulations impacting remittances (taxes, AML/CFT) based on data and research. This will serve as inputs for the proposed country-level migration diagnostics
- Examine the use of regulatory sandboxes for reducing the cost of remittances for unserved populations (women, youth, refugees and migrants)
- Convene a dialogue involving financial service providers, governments, international organizations and humanitarian organizations on how law and regulations can be adapted to enable safe and effective development of fintech and remittance channels
The diaspora of developing countries can contribute to development in their countries of origin by increasing trade and investment, providing market information and matching / referral services, improving access to technology, making remittances for health, education and infrastructure projects, supporting philanthropic activities, and providing access to capital markets (such as through diaspora bonds). While some countries have devoted resources to fostering contacts with their diaspora, for many sending countries the diaspora remains a resource that is largely untapped. Policies that could help enhance benefits from the diaspora include providing dual citizenship and voting rights, working with overseas diaspora organizations to improve contacts with origin communities, easing restrictions on foreigners’ economic activities (including land ownership) for diaspora members, and providing information (and perhaps subsidies) to facilitate return.
Going forward this thematic working group will:
- Facilitate the mobilization of remittance and diaspora resources for development efforts including diaspora bonds. A key output could be the production of diaspora profiles of up to 50 countries as a global public good, for use by all stakeholders, especially, for the issuance of diaspora bonds
- Undertake feasibility studies for relevant pilot projects, such as remittance-backed bond financing for SME or infrastructure funding
- Engage local authorities, local communities, the private sector, diasporas, hometown associations and migrant organizations to promote knowledge and skills transfer between their countries of origin and countries of destination, not limiting to mapping the diasporas and their skills, as a means of maintaining and enhancing links between diasporas. This will be done on a demand-basis by national governments
- Engage the diaspora of conflict-affected countries and facilitate knowledge exchange on activities, support to home country, remittances and investment opportunities
- Facilitate the engagement of the diaspora to support entrepreneurship (through venture capital funds, start-ups, incubators, and accelerators in both host and home countries)