Sri Lanka Must Leverage its Diaspora for Development, But It’s More than Just the Money (‘Smart Future’ Article #4)

This is the 4th article in the ‘Smart Future’ column originally published in the Daily Mirror Business on Wednesdays.

Sri Lanka has struggled with engaging its diaspora. The protracted conflict polarized diaspora communities abroad and created negative perceptions at home. Yet, a conference held last week attempted to reverse this. Titled ‘Our Sri Lanka: Engaging Persons of Sri Lankan Origin Overseas’ the Consortium of Humanitarian Agencies (CHA) and International Alert brought together inspiring and committed individuals from the UK who are demonstrating how diaspora communities are already positively engaging with Sri Lanka. Over the two-day conference, I shared some thoughts on diaspora engagement, anchored to a draft paper titled ‘Leveraging the Diaspora for Investment and Knowledge in Sri Lanka: Challenges and Policy Options’ I co-authored with a member of the Sri Lankan diaspora community in Canada. Interestingly, she was part of a successful diaspora engagement initiative called the LankaCorps Fellowship (The Asia Foundation). While there is much debate on what constitutes “the diaspora”, here is it taken to generally mean persons of Sri Lankan origin who are living overseas, regardless of when they went or how long they’ve been away for.


Unpacking the Motives for Engagement


Diaspora groups are not homogenous. They not only vary in terms of their ethnicity, religion, and political views, but also in their interests in and motives for engaging with Sri Lanka. According to the literature, motives forpeople map engagement are classified as financial, social, and emotional (or sentimental); sometimes these motives overlap no doubt. The paper revealed a few key findings that are interesting in this regard. Firstly, those born in Sri Lanka have a greater frequency of re-visiting and 77% of them are likely to return on a visit or short stay at least once every five years. Secondly, of those who do engage with Sri Lanka 50% said they do so purely due to sentimental connections; a further 21% for philanthropic reasons; and 11% for social recognition of their efforts. Only 14% said they do so for financial gains. Thirdly, engagement in terms of ‘sending money to friends and family’ and ‘donating to charities’ are the most popular forms of engagement among the 45-64 age-group, but the highest proportion of those who ‘donated professional time to a Sri Lankan institution’ were among the 25-44 age-group. So, when devising policy approaches for diaspora engagement, we must be acutely aware of such heterogeneity in motives; it has implications for the success or failure of any programme.

Remittances – Positive and Perverse Effects


The most basic form of diaspora engagement or investment in their country of origin is remittances – a hands-off approach by which diaspora communities send money to family, relatives and friends. And the numbers are staggering. Globally, over US$ 400 billion was sent in remittances to developing countries in 2013, and it surpassed Official Development Assistance to developing countries. Studies have shown that a 10% rise in remittances in a developing country can reduce poverty by up to 1.6% in that country. In Sri Lanka, too, remittances (around US$ 6 billion annually) have played a strong role in raising prosperity of provincial economies, and could explain part of the recent poverty reduction that we have seen. Sometimes, however, it can cause distortions to the labour market. On a visit to Jaffna last year I found that families in Jaffna town were receiving considerably more remittances than those in Point Pedro. Youth here were spending a lot of it on consumption activities and were ‘picky’ about the work they wanted to do. Businesses couldn’t find workers. Remittances had skewed the incentives to work. In Point Pedro on the other hand, the news of an ice factory expanding was attracting dozens of youth queuing up every morning inquiring about when they can start work. Diaspora communities – and indeed those managing diaspora engagement – must be mindful of the positive as well as perverse effects of remittances and ensure that the money can be productively and sustainably invested in local communities.


Not Just the Money, but Talent


While remittances are the most obvious form, financial engagement by diaspora includes instruments like sovereign diaspora bonds and diaspora investment funds. Sri Lanka, too, has both of these. But it is also important to think beyond the money, and this was a key recommendation that came out of the ‘Our Sri Lanka 2025’ conference. I argued that diaspora knowledge transfer and ‘brain-gain’ initiatives could be as valuable as direct financial investment. Several countries that have seen high growth in the past have launched programmes specifically for this purpose. The TOKTEN (‘Transfer of Knowledge Through Expatriate Nationals’) programme devised by UNDP and implemented in Turkey, Lebanon, Pakistan and Rwanda, the ‘Reverse Brain Drain Project’ in Thailand, and the ‘Thousand Talents Programme’ in China, are excellent examples of this. Sri Lanka can learn from these to design a credible, and open scheme that provides a meaningful and organized mechanism through which Sri Lankans living overseas can connect to knowledge, intellectual, cultural, technological needs and opportunities in Sri Lanka. The National Science Foundation has already initiated some schemes to attract diaspora scientists.


Government Championship Needed


To do many of these activities, there needs to be support and coordination at the highest level. I proposed that Sri Lanka establish a lead agency to deal with diaspora engagement in all areas – financial, scientific, cultural, educational, etc. In fact, our study revealed that there is plenty of support for such an idea – two-thirds of those surveyed believe that Sri Lanka could benefit from a specialised government institution solely dedicated to handling diaspora affairs. I advocated for careful thinking, though, on where this should be placed; the Ministry of External Affairs should not be the default choice as diaspora engagement is more than visa matters. I argued for a model like the former Peace Secretariat where professionals with diverse expertise and experience work in an agency that is trusted by all stakeholders, has sponsorship from the highest authorities, but operates at a ‘meta’ level. An agency that generates new ideas on ways to engage the diaspora, facilitates such engagements, and advises line ministries implement policies and programmes around it. The work would not only focus on citizenship issues, but also on building networks and knowledge partnership opportunities, conducting surveys and information gathering on diaspora motives and interests, and curating a repository of diaspora contacts, their interest/abilities, and their achievements.


With around 3 million Sri Lankans living overseas, it’s essential that diaspora engagement becomes a stronger priority area. There is ample evidence on the socio-economic benefits accruing to a country from it. Admittedly, more work needs to be done to strengthen this case but a coherent and credible government strategy is an important first step.


This is the 4th article in the ‘Smart Future’ column that advances ideas on economic reforms, innovation, and competitiveness. The draft study referred to in the article is co-authored by Madushi Seneviratne.


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