Globally, the DRC Diaspora Programme strives to effectively engage with diaspora networks both within and outside of their country of origin with the aim of enhancing their recognition within the humanitarian system and fortifying their long-term economic objectives. Recognizing the incredible potential of globally united diasporas, the DRC Diaspora Programme aspires to lend a helping hand to not only diasporas confronting crisis, but all diasporas across the world.
At a global level, the Danish Refugee Council (DRC) endeavors to leverage the positive impact of diaspora economic engagement to benefit households and local communities impacted by displacement in their countries of origin. Presently (2023) DRC is actively engaged in promoting diaspora economic engagement in Ethiopia, Lebanon, and exploring potential opportunities in Tunisia, Mali, and Kenya.
Diaspora communities play a pivotal role in providing economic support to their countries of origin through various means such as remittances, investments, and community grants, often surpassing the levels of international aid. These financial streams are essential for ensuring access to education, healthcare, food security, and supporting local businesses, which, in turn, generate employment opportunities. Despite regulatory and banking barriers, diaspora communities persevere in maintaining these vital financial flows.
In spite of the size and propagation of diaspora economic engagement at household and community level in diaspora countries of origin, the effects at local level and the modalities used between diaspora and households and communities are generally poorly documented.
For design of interventions and to avoid harming or usurping the essential flows, DRC is committed to always conduct a piece of research at the local level before any programming can start.
Whereby diaspora have supported relatives to use their remittances to become self-reliant. This is typically done through the use of social media platforms that are used within diaspora networks and between diaspora and relatives.
This is a simple set-up whereby recipients of remittances can apply for a top-up to their remittances from DRC, to start up a small business. It works as a tri-partite agreement between the recipient (contributing 10% of the investment), the sender of remittances (40%) and DRC (50%). Apart from the 50% top-up DRC provides training and coaching to the businessperson.
The basic idea is to allow senders and recipients of remittances to convert small monthly transfers to a larger business investment by using the track record of remittance sending/reception as collateral (together with a loan guarantee) for a loan. Once the business is profitable, the loan is repaid through those remittances they would have received anyway
Diaspora businesspeople who want to partner, or invest, in existing local companies, start up their own business in country of origin, or otherwise engage in ways that can support local job creation is the target group for this component.
The activities have so far included training and coaching on entrepreneurship, national legislation, and processes for investment/engagement.
Local authorities are supported to constructively reach out to and facilitate diaspora economic engagement at the local level. Activities have included website establishment, training, and mapping of existing processes and requirements for businesspeople to engage.
It is a widespread practice for diaspora groups /associations to mobilize funding in support of community initiatives in countries of origin. DRC is yet to do any programming to actively support such initiatives but is currently being explored as another type of engagement for DRCs diaspora programme. This could include top-up of diaspora contributions to community development initiatives.
In collaboration with DRC Lebanon and funded by Novo Nordisk Fonden under the CHASE Project, the DRC Diaspora Programme has in 2023 conducted research on diaspora business engagement in Lebanon.
The report documents how the Lebanese and Syrian diaspora contribute to the local economy and job growth in five selected communities in Lebanon. It outlines various business engagement models by the diaspora, detailing their dynamics with relatives in their countries of origin. The research underscores the vital role diaspora engagement plays in livelihoods and job creation in Lebanon. The chosen villages in North and East Lebanon (Burj Al Arab, Wadi Al Jamous, Baalbek, Shmustar, Zahle, and Majdal Anjar) were selected due to their hosting of a significant number of Syrian refugees and aligning with DRC's economic recovery initiatives.
1. Investing to support relatives: Diaspora primarily aids relatives in establishing businesses to replace traditional remittances for daily expenses.
2. Two main business initiatives: Diaspora members assist relatives in starting businesses through for-profit or for-charity approaches.
3. Family as business partners: Diaspora engages family members as primary partners for initiating and managing business investments.
4. Familiarity and trust: Trust and familiarity drive business collaborations within the family, considered essential for diaspora financial contributions.
The diaspora is the backbone of Lebanon's economy, contributing significantly with 6.84 billion USD in remittances in 2022, accounting for 33% of the GDP. While the majority of diaspora members send remittances for immediate family needs, others support relatives to establish self-reliant businesses and thus reducing dependency on transfers.
Diaspora business engagement had a clear positive impact on business owners and their families. Respondents attribute their business starts and growth to diaspora support, enabling job creation, improving working conditions, providing for the wider family and empowering women. For the diaspora, these investments ensure family well-being, savings, and retirement in Lebanon.
