How We Can Use a Nation’s Diaspora to Discourage Future Migration

By David North on July 15, 2021

One of the ways to help a down-at-the-heels nation help itself, and thereby (hopefully) relieve some of the pressures for emigration from that nation, is to tap into the (largely hidden) external resources of that nation — notably by enlisting help from the country’s own emigrant communities.

How do you use the resources of the one-time migrants to discourage future migration? Well, a little packaging is in order. The objective of the proposed activity would be described as nation-building, not as emigration-discouraging. It would be both.

In a recent post, I told of my short and grim stay in Haiti 30 years ago when I had a contract with one of the many post-Duvalier governments of that benighted nation, and was putting together a multi-part plan to use the assets of the Haitian diaspora to help the homeland.

Several of the ideas I had at the time can be used with nations that are sending us lots of illegal aliens (such as the Northern Triangle nations of El Salvador, Guatemala, and Honduras) as well as the Haiti of today. While none of them alone would make much of a difference, collectively they could help with the needed nation building.

One of the basic suggestions I made at the time was that citizens of Haiti who no longer live there should be allowed to vote from the U.S. (and other settlement nations). The idea we tried to sell to the government in Port-au-Prince was that this would encourage its emigrants to do things that would help the homeland; also, more specifically, it would require an up-to-date passport from Haiti, and thus some continuing flow of cash to its always broke government.

A by-product I had in mind, but did not mention (there’s a bit of benign duplicity here), is that overseas votes might help reform candidates win future Haitian elections.

Some of the other suggestions made at the time, or having occurred to me since, are these:

  • Promoting reverse tourism;
  • Encouraging, with one-time cash grants, settlement in Haiti of those one-time residents of Haiti with U.S. Social Security incomes;
  • Creating emigre lobbying organizations to help the home country get more funds from Uncle Sam;
  • Using emigrant money to start a home mortgage industry in Haiti; at the time houses were rarely sold for anything but total cash payments, a real burden on the real estate business; this may still be true;
  • Creating a “Wall Street/Haiti mutual fund”; and
  • Making sure that the mechanisms used by the diaspora to send remittances back to Haiti are efficient and not too costly.

Let me elaborate on three of these ideas.

Social Security Payments. A citizen of the U.S. can retire to just about any place in the world (except North Korea) and get his or her Social Security check sent to that citizen monthly. This is attractive to some older migrants on multiple grounds: The check will go further in a Third World nation than in the U.S., the language of the neighbors will be a familiar one, some members of the family may still live in the home country, etc. Meanwhile, the home country’s finances will be boosted by a steady flow of these checks.

Elderly Haitian Americans have, however, not used this option much, and our proposal is that Haiti should promote this practice to help build its own economy. The Social Security Administration’s Annual Statistical Supplement, 2020, Table 5j11, lists the distribution of such checks where more than 500 a month go to a nation and Haiti does not make the cut, but on the other side of the island of Hispaniola, the Dominican Republic has more than 7,500 resident beneficiaries, bringing that nation more than $77 million in benefits in 2019. If Haiti could generate one third of that amount, it would bring $25 million a year into that nation.

Some Haitian emigres in the U.S. might not have thought of that option, and it should be described to them. A one-time travel payment made by the Haitian government might cause more Haitian Social Security beneficiaries to make that move, and bring a steady income with them in future years.

The Wall Street/Haiti Mutual Fund. A more significant suggestion is that a mutual fund be created for members of the diaspora that would serve two purposes: It would enhance the income of the investors and would bring badly needed capital to the island nation. The fund would be 50 percent in U.S. stocks and perhaps bonds, perhaps an exchange-traded fund based on investments in a group of stocks, such as those in the Dow 30. This would provide some income on a steady basis. The other half of the fund would be invested in for-profit activities in Haiti, including home mortgages and export activities.

A Haitian-American businessman wanted my permission to set up such a fund when I was there 30 years ago; I told him that I had no control over the idea, and he was free to explore it without further permission from me or TransCentury, the consulting firm I was with at the time. I don’t know what, if anything, he did with the idea.

In retrospect I should have tried to sell the idea to the gifted and late Jack Bogle, founder of Vanguard, one of the biggest mutual funds in the world. We had had adjacent dorm rooms in college.

Remittances. One of the most efficient transfers of funds to the home country can be wired payments made by one-time residents to their families back home. They, collectively, manage to subsidize poor families in the homeland, and keep them there (though that is not part of the thinking of the emigres.)

At the time of my visit to Haiti there was a wire-transfer firm that was famous for its ability to locate and deliver remittances to people in the deepest of Port-au-Prince’s slums, or in the most remote, address-free parts of the countryside. The firm, whose name I have long since forgotten, used the informal exchange rates when accepting American dollars, but used the formal rates when delivering the Haitian gourde at the other end. The difference was substantial and always in favor of the middlemen, who made a killing.

Some of these ideas, though designed for the Haitian diaspora, could be used with the Central American diaspora as well.

Topics: Remittances