Aleksandr V. Gevorkyan, Ph.D. and Vladimir Asriyan, Ph.D.
On April 9th the Armenian Economic Association hosted two special guests as part of the organization’s seminar series on “Diaspora for Development.” Kingsley Aikins and Martin Russell, Ph.D. of The Networking Institute shared with an audience of economists and policy makers their views on the diaspora-engagement strategies globally and with a specific focus on the case of Ireland.
The discussion touched on the successes and failures in the diaspora centric policies, leading to some broad and some specific conclusions relevant across small economies with large diasporas. Ironically, in the words of the speakers, “those who lost the most stand to gain the most” if a functional diaspora engagement mechanism is developed.
The panelists brought up a concept of ‘diaspora capital’ defined as being made up of three flows - flows of people, flows of knowledge and flows of finance. As such, it is fair to say that today every country possesses a diaspora capital but in varying degrees. There are three related questions: 1. Who are the diaspora? 2. Where are the diaspora living? 3. What are they doing? All three require a data-driven perspective to diaspora policy and research.
Data collection, recognizing the heterogenous composition of the diaspora, listening to and learning from the diaspora are key to a successful national strategy towards connecting with expatriate networks. The evidence on the role of the diaspora’s financial capital, especially at the early stages of country development, ranges from strong diaspora participation (e.g., Israel bonds of 1950s) to a more diverse pattern. In Ireland itself, there appears to be some correlation with the country’s macroeconomic improvements and rising role of the diaspora’s led business. Yet, there remains a critical element of the first-mover advantage and scale, as diaspora investors may lead large multinational supply chains into their home economy.
From economic development perspective it is not that much of the immediate connection that is critical but a more sustainable cultural relationship between the home country and diaspora, centered around identity. The short-term take on diaspora, ad hoc fundraising or viewing diaspora as either a monolithic entity or represented by a few leading groups, is counter-productive to a sustainable engagement model, which implies routine longer-term networking with diverse diaspora communities. But what sustains, despite the pressures of assimilation, diaspora’s interest in the home economy?
For the panelists, “culture, culture, and culture” goes to the bedrock of the home-diaspora relations, economic and other. It is the national cultural identity that helps maintain diaspora’s cross-generational interest in the home country. And while some productive tension, between diaspora groups and home country, may be helpful for competitive outcomes, unless the rapprochement is founded in mutually accepted core principles of a national economic development, there is a risk of failure. The trust gaps between the diaspora and home and then within the diaspora communities are seen as the major obstacles to the shift from the individual gain to a common good in economic development.
To balance the above challenges and maximize the possible diaspora potential, the home country government should assume a role of facilitator, empowering the diaspora and cultivating the sense of belonging. A cornerstone to any diaspora engagement strategy is the home country’s ability to formalize its structures vis-à-vis diaspora. There are three lessons in this for Armenia.
First, migration, and seasonal labor migration specifically, is now part of the Armenian economic model as remittances remain significant for household incomes and as a share of the national economy. However, it is not enough to manage labor migrants’ remittances flows to balance inflationary or exchange rate pressures. Undoubtedly, remittances may have a strong short-term poverty alleviation effect. But there is a recognized dependence on the source country’s business cycle and migrant’s individual preferences and connections with home. Instead, every attempt should be made to leverage such flows into longer-term scalable development projects that would go to the core push factors behind migration and beyond remittances.
Second, the trust gap between home and diaspora is a dynamic phenomenon that requires constant treatment and attention. Despite patriotic and altruistic sentiments, the connection between an individual living abroad and the country of their birth or their ancestors will remain subjective. Individual perceptions are layered upon the complexity of maintaining one’s identity abroad and challenges to the host-economy’s social mobility. Recognizing such diversity of diaspora outcomes, testing the strength of the mutual bonds, is key in fine-tuning the message from home.
This brings us to the third lesson and that is about formalizing diaspora structures. Dedicated government sponsored and individual agencies, with diaspora participation, play a crucial role in in nurturing the trust that goes into the sustainable models of economic development with diaspora’s participation. The role of inter-generational knowledge and capacity transfers is critical as home country’s formal structures maintain institutional legacy of diaspora relations.
Lastly, much, though not all, of the above conclusions are tentative, as they are based either on anecdotal evidence or on the rich field experience of the speakers. Yet, if Armenia and/or diasporan institutions are to muster scarce resources towards the deepening of the diaspora-homeland engagement, a more systematic data-oriented policy approach is needed. Such approach requires answering a set of three critical questions: 1. What motivates the diaspora to engage with Armenia? 2. What is the realistic economic assessment of the Armenian diaspora’s potential? 3. What engagement infrastructure may be helpful to facilitate a mutually productive and sustainable relationship?
Perhaps the efforts of the Armenian Economic Association’s Diaspora-for-Development series may offer some tangible direction to social scientists seeking a more applied understanding of diaspora-home relations. Until then, diaspora’s potential in the home country’s economic development remains just that a potential, unless the enablement conditions are put in place. The pressure is on both diaspora and home. It is the latter that holds the keys to the necessary centralized resources.
Aleksandr V. Gevorkyan, Ph.D. is a macroeconomist with focus on open economy development, economic history, labor migration, diaspora, and post-socialist transition economics. He is the Henry George Chair in Economics and Associate Professor of Economics at the Department of Economics and Finance of the Peter J. Tobin College of Business at St. John’s University in New York City. Dr. Gevorkyan is the author of Transition Economies: Transformation, Development, and Society in Eastern Europe and the Former Soviet Union (Routledge, 2018).
Vladimir Asriyan, Ph.D. – is a macroeconomist who studies the (fragile) interaction between financial markets and the macroeconomy, and the implications this has for economic fluctuations and growth. He is a Professor at the Centre de Recerca en Economia Internacional (CREI) and Barcelona Graduate School of Economics, in Barcelona, Spain.
All views and interpretations expressed in this article are those of the authors and do not represent the opinions of any organizations or companies.