The Caribbean Diaspora - An Untapped Resource for ...

1 1 The Caribbean Diaspora - An Untapped Resource for Impacting Economic Development through Investments in the Caribbean . Roger Hosein1 Martin Franklin2 Samantha C. Joseph3 Abstract Globalization has brought with it an integration of people across national, political and geographical boundaries. The Caribbean has one of the largest net migration rates and has evolved from being a net importer of labor to a net exporter. The widening of the income gap amongst different regions in the world as well as an increase in labor shortages has spurred a continued increase in migration rates in the Caribbean region.

2 The Caribbean Diaspora is located in the United States, Canada, United Kingdom and countries that were previously colonial empires . Much work has been done on remittances and its impact of development, however, a scant amount of literature is available on the Caribbean Diaspora and its investment potential in the region s developmental plans. It is in this light that this paper seeks to assess the investment potential of the Caribbean Diaspora . The paper highlights the importance of leveraging and tapping into the resources of the Diaspora to facilitate human capital investment, financial and real sector investments.

3 Keywords: Caribbean Diaspora , Economic Development Introduction 1 Senior Lecturer, Department of Economics, University of the West Indies 2 Head of Department of Economics, Lecturer, University of the West Indies 3 Research Assistant/Mphil/PhD Candidate, Department of Economics, University of the West Indies 2 Globalization has brought with it the integration of systems, including the temporary and permanent movement of people across national borders. The Caribbean has been created from migratory flows of people into the region.

4 Evidence of this goes as far back to the rediscovery of the Caribbean in 1492, which made an indelible mark on the region s demographic composition. There are two types of migration: external migration, which consists of intra-regional migration and extra-regional migration, and internal migration which refers to movement from rural to urban areas within a This paper however, focuses on external migration which is the movement of people outside the region. External migration from the Caribbean has continued to increase over the years, with significant levels of migration occurring in countries such as, Jamaica, Guyana, Suriname, and St.

5 It has been argued that the Caribbean has lost over five million people over the last fifty Data provided by the United Nations (2002) suggest that the Caribbean has one of the largest net migration rates7 which is spurred by the widening of the income gap amongst different regions in the world as well as an increase in labor Nurse (2006) has argued that the Caribbean is now a net exporter of The majority of migrants from the English speaking Caribbean originate from the OECS countries, Guyana, Jamaica, Haiti and Migration offers benefits and disadvantages to the home and host countries as well as the migrants.

6 Table 1 below gives a summary of some of the cost and benefits of migration, however, the Caribbean region is yet to tap into many of the benefits of migration. There is a large amount of resources and wealth available for the home country to tap into so as to facilitate the development process in the Caribbean . Table 1; Cost and benefits of Migration Benefits of Migration Cost of Migration Provide opportunities to migrants that are not available in the home country Loss of highly skilled labor which means a reduction of the quality of service.

7 Help reduce the level of unemployment in the home country Reduction in growth and productivity of the labor force. Inflow of remittances from the people who have migrated increases foreign exchange and income to family members Lower returns from public investment in public education. Technology , investments and venture capital from the Diaspora Possible loss of fiscal revenue from taxation of workers. 5 Migration in the Caribbean : what do we know?

8 Expert Group Meeting on International Migration and Development in Latin America and the Caribbean , UN/ POP/EGM-MIG/2005/09, 13 January 2006 6 ECLAC (2006), Migration in the Caribbean , What Do We Know, (Expert Group Meeting on International Migration and development in Latin America and The Caribbean ) 7 Ibid pg. 10 8 Keith Nurse(2006), Migration, Diaspora and Development in the Caribbean Policy Paper, Focal FPP-04-6 10 Ibid pg. 12 3 Can increase the level of trade between the host and home country Remittances may diminish over time Lead to investment in domestic education and human capital by migrants.

9 The possibility of inflationary potential of remittances, especially on real estate, in some areas. Transfer of skills and knowledge by return migrants as well as linkages of local enterprises to foreign enterprises Selective migration may cause increasing disparities in incomes in the home country. Source: UN/DESA (2004). There are many costs associated with the migration of skilled nationals; much of these can be reduced by engaging the Diaspora . Diasporas though not part of development policy in most developing economies can make contributions that can directly impact social, economic and political spheres.

10 The Diaspora has the ability to make valuable investments in the home country through human capital investment, financial and real sector investments. These investments have the potential to stimulate economic growth in the Caribbean region. However, effective policies and programs need to be put in place to facilitate the engagement of the Diaspora in economic development as well as to ensure that the Diaspora is recognized for its contributions to the development of an economy. To facilitate all this from a Caribbean perspective, some quantification of the Diaspora s investment interest in facilitating economic development in the Caribbean is required.