How Jamaica Can Leverage Its Diaspora To Grow

Jamaican fans are an economic boon to the annual Penn Relays in PA, only one instance of the Jamaican Diaspora in the US’ economic impact. (Penn Relays Facebook image)

By NAN Business Editor

News Americas, WASHINGTON, D.C., Weds. Nov. 23, 2016: The International Monetary Fund, (IMF), recently cited several recommendations made by a new Economic Growth Council in Jamaica to help unlock Jamaica’s growth potential. Among them is what Uma Ramakrishnan, IMF’s mission chief for Jamaica, terms: “leveraging the Diaspora.”

So how exactly will this work?

The main recommendation from the new Economic Growth Council according to Ramakrishnan, is for the Andrew Holness administration to explore the feasibility of establishing an investment vehicle to encourage and facilitate Diaspora direct investments into Jamaica.

It is recommended that by March 2017, the government begins a feasibility study on institutional framework for promoting, coordinating and organizing economic and social investments by the Diaspora.

It is also recommended that a feasibility study of the creation of a Global Jamaican Immigration Card for issuance to members of the Diaspora also begins next March.

Over the past decade, a number of governments and other organizations have established programs to encourage emigrants and their descendents to invest in their home countries. Initiatives range from privately run and funded to government-led, but most involve some sort of public-private partnership, according to the Migration Policy Institute.

MPI’s Kathleen Newland and Hiroyuki Tanaka say members of a Diaspora have both advantages and disadvantages in pursuing investment opportunities in their countries of origin. “They are more likely than people without ties to the country to see opportunities, understand the opportunity structure, and have connections and “cultural capital” that facilitate their undertakings,” they state in “Mobilizing Diaspora Entrepreneurship for Development.

However, they also posit that Diaspora entrepreneurs often encounter entrenched attitudes, resentment from non-migrants and administrative barriers in their home countries.

Still, several countries, from India to Nigeria, according to MPI, have started to hold high-profile events that celebrate the accomplishments and contributions of Diaspora entrepreneurs. China has made attracting Diaspora entrepreneurs a pillar of its “One Thousand Talents” Initiative, an element of its high-profile National Medium- and Long-Term Talent Development Plan.

Jamaicans living overseas in the US, UK and Canada is put at a conservative estimated 3 million, excluding those with Jamaican roots.

Meanwhile, the other areas the IMF suggests to foster growth includes addressing crime in Jamaica, improving financial access and inclusion, reducing red tape and moving ahead on privatizations and public-private partnerships.

The new program recommendations also include improving social spending to support the poor and vulnerable, continuing exchange rate flexibility, improving the ability of monetary policy to impact the real economy, and further reinforcing the financial sector to help secure macroeconomic stability and support growth.

“Every effort is needed, in collaboration with development partners, to execute the structural growth reforms recommended by the authorities’ Economic Growth Council,” said Tao Zhang, Deputy Managing Director and Acting Chair of the IMF. “Resources will have to be redirected to combat crime and ensure national security. Easing of growth bottlenecks will facilitate a stronger private sector job creation, as the government refocuses and streamlines its role.”

The Executive Board of the International Monetary Fund (IMF) on Nov. 15th approved a three-year Stand-By Arrangement (SBA) for Jamaica to support the authorities’ continued economic reform agenda. Access under the SBA arrangement amounts to about US$ 1,64 billion (SDR 1,195.3 million), the equivalent of 312 percent of Jamaica’s quota in the IMF. The Jamaican authorities have indicated that they will treat the arrangement as precautionary, and do not intend to draw on the new SBA unless exogenous shocks generate an actual balance of payments need.

The Executive Board approval will make about US$ 411.9 million (SDR 300.1 million) available, and the remainder in six tranches upon completion of semi-annual program reviews.