This is the concluding part of yesterday's article. The original version of this article was published by Pambazuka News.
A long-standing critique of traditional aid is that it fails to properly target the most useful areas of development because it does not always hold the best interests of the recipients at heart and that it does not possess the understanding of the unique, local conditions in which programmes are operating. The increase in donor influence over specific projects greatly diminishes the possibility of long lasting positive outcomes. The power of diaspora backed projects is that they can exist on an intra-familial or intra-community basis so it is clear what the motives behind them are and they are able to overcome the information gap which can exist between local communities and multinational organisations. According to IFAD, diaspora investments in agriculture a four times larger than the official development funds; if this power could be harnessed intellectually as well as financially then local projects would have a higher chance of working.The ODI especially, believes that localised aid is, and would be, a far more effective use of the funds and resources, and would most certainly involve much more local knowledge of the particular project and area.
In a recent article, a research fellow for the ODI argued that not only is localising aid work better for the project and the local area, but that it strengthens aid systems, producing optimum results. In particular several areas are highlighted that would be enhanced from localising aid, including the national economy and a strengthened national government due to better control over project management. The difficulty of such schemes is that at present they are not tracked or analysed to a professional standard, so while they may have the best interests of the right stakeholders at heart, they may lack the professionalism to deliver a project most effectively. The lack of formality in this sector, then, is both a strength and a weakness.
Several schemes have been established to amplify the impact of diaspora cash-flows such as the improved structures of sub-Saharan African financial sectors and the increased money lending capacities in such areas. Of course, there is still a huge amount of potential to be unlocked.
There are some clear areas that policymakers in both the developed and developing worlds can help to improve the effectiveness of diaspora contributions. Domestic bank charges account for around 12% of remittances to Africa currently, which clearly limits the scope for contributions of any sort. The complex and off-putting visa demands of, for example, countries in the European Union represent an enormous stumbling block for well-functioning diaspora schemes. Policymakers have recognised these issues but change will not occur overnight. It is crucial that the diaspora and related diaspora organisations seek to improve relevant structural issues themselves. If the diaspora improves organically, those policymakers seeking to complement this growth will have a stronger case to make.
Globally, transparency has become a major issue for policymakers and businesses alike in the last ten years. This is a movement that is built on data - how to measure it, how to manipulate it, how to test it. It embraces governments, civil society organisations and the commercial sector by unifying these different groups under the simple ideal that better data equals better results. Because transparent schemes let the public scrutinise the associated data there is less chance that the needs of local stakeholders can go ignored - those stakeholders are now able to check and prove or disprove claims of assistance. This sort of process is one that would greatly benefit diaspora investments - rather than simply claiming to hold the interests of local stakeholders closer to heart than traditional aid or business models, they will be able to show it.
In 2004, a paper by the Migration Policy Institute called for organisations to focus on combating the information deficit surrounding diaspora funds to help nascent development and investment projects to be more effective and transparent. Developed Africa believes that opening up the commercial potential of Africa is also best served by combating this deficit. There are millions of opportunities in the continent for investment and other support; the main issue for those on the outside is a lack of knowledge about what is available and, crucially, what returns they can expect.
If members of the Africa’s diasporas know everything they need to know about where these opportunities are, what they are seeking to achieve and what support they are seeking, they will be empowered to become involved in development. Diaspora organisations are ideally suited to drive such projects forward as they have better local understanding and have a clear commitment to seeking sustainable change. Developed Africa offers a platform for this.