Let's incentivise Diaspora participationSunday, April 18, 2021
Our Jamaican patriots on the global stage have made us proud as they engage in every facet of human development and continue to exemplify extraordinary achievements in their areas of operation. The conscious benevolence of members of our Jamaican Diaspora of nearly three million strong keeps our hope alive especially in times of despair. Time and again, when problems besetting our nation seem intractable and beyond the capacity of our local expertise, our Diaspora resources and voluntarism are given unconditionally in an effort to assist us at all levels and areas.
We must surge ahead in pursuit of strengthening our relationship with our Diaspora, ensuring our attention to them is not episodic, but sustained with more urgent, practical, tangible, and implementable programmes for mutual and economic reciprocity.
The Caribbean Policy Research Institute (CaPRI), in studying the value of Diaspora investments to our economy in 2017, suggested that Jamaica could increase the value from US$1.2 billion to higher rates if we diversified our economic options to their group.
At the eighth Biennial Jamaican Diaspora Conference, in 2019 at the Jamaica Conference Centre, Minister of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith stated the Government's intention “to create pathways for increased engagement with and involvement of the Jamaican Diaspora across the world”. This she said would be supported through the minister responsible for Diaspora affairs, Diaspora councils, and the National Diaspora Policy once adopted.
The Government has not made a serious effort to cultivate relations with the Diaspora. A careful review of the draft policy reveals a comprehensive mission statement of 10 overall goals without mentioning the proposals made by the Economic Growth Council in 2016, which to date have not been implemented. It proposes, however, flows for economic investment and trade through the “mobilisation of remittances for investments and for national development purposes…”
Inflows of patriotism
The significant foreign exchange inflows to Jamaica provided by our Diaspora through their remittances has underpinned the strength of our economy. With total inflows exceeding US$2.4 billion in 2019, representing 15.6 per cent of our gross domestic product (GDP), Jamaica beat the world average by 339 per cent. In other words, in relative terms, the commitment of overseas Jamaicans to their homeland and families is 3.39 times more than the average world citizen.
During the height of the novel coronavirus pandemic, despite significant layoffs in the global marketplace, Jamaica bucked the international trend with increased remittances and, most recently, in January 2021, remittances to our island increased by 39 per cent. This increase came at the right time, given our significant fall-off in tourism revenue by 85 per cent, which is perhaps the main reason our exchange rate has not moved significantly.
Moreover, there is no institution that does not, nor has not benefited from the multiplier effects of these inflows as they are directly circulated throughout our economy with local payments and general consumption. Remittances are the real social cushion of our economy.
In my interactions with Jamaicans living abroad, their ultimate desire is to help make Jamaica and the communities they originate from better places to live and work. They tell me that they would move home in a heartbeat if they could feel safe, access good health care, and earn a good living. How can we involve them to help create the Jamaica we all yearn for?
With global interest rates being low, keeping cash in the bank is providing little or no return to the average investor. In Japan and parts of Europe interest rates have been negative, and more so when compared to inflation. Herein lies an opportunity for members of our Diaspora to earn more, while helping their homeland develop.
Given the macro stability of our economy, local banks and other private and public institutions can develop investment instruments which have appeal to the ardent overseas Jamaican investors. Furthermore, our relatively low borrowing rates could even be lower with access to international funds.
Remittance-linked loans, Diaspora bonds, as well as relevant innovative financing tools are a few of the solutions being developed by other countries for poor households and small businesses (Dilip Ratha, World Bank). Diaspora bonds, which have been used by Israel to tap into the wealth of the Jewish Diaspora since 1951, have raised nearly US$30 billion to fund education and other projects. Other countries, such as India, Lebanon, Nigeria, and Sri Lanka, have also used these instruments to enhance their national development
Access to lower-cost mortgage financing for locally owned hotels, guest houses, tourist attractions, and retirement homes would add value to our construction sector. The National Housing Trust (NHT) could administer and guarantee a Diaspora mortgage bond for a fee and list it on Jamaican Stock Exchange, making it liquid and easily tradeable. The proceeds from the mortgagors' loan repayment would settle the bond in the long term.
Similarly, the business processing outsourcing sector (BPO) is one of the fastest growing in Jamaica and has created thousands of jobs for Jamaicans with more room for growth. A robust national broadband infrastructure goes hand in hand with expanding this sector, as well as our educational instruction throughout our primary and secondary schools. The growth of the BPO industry owes a great deal of its success to the low-cost financing by Venezuela's PetroCaribe, which is no longer available. However, a Diaspora Broadband Bond, issued by the Development Bank of Jamaica (DBJ), could facilitate building our national broadband capabilities to internationally competitive standards as well as continuing the growth in BPO building infrastructure.
Finally, many Jamaicans have never had the luxury of potable piped water to their homes, which is truly an indictment on our people's human rights. The National Water Commission and Rural Water Supply have both blamed inadequate resources for the lack of their capital development for enhanced water supply to citizens, especially those living in rural areas.
We have always depended on our Diaspora and they have always answered our call during times of great turmoil. It is time to incentivise their participation with higher rates of return and other benefits so as to stimulate our country's economic development.
Lisa Hanna is a Member of Parliament and People’s People’s National Party spokesperson on foreign affairs and foreign trade.
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