OFWs: Harnessing the Filipino diaspora

Last of two parts
(Ric Saludo’s colleague Bill Huang contributed this guest column.)

IN tapping its nationals abroad, India has gone from indifference to engagement within the past decade. The first prominent achievement may have been its successful issue of foreign-currency-denominated “Resurgent India Bonds” in 1998, marketed specifically to non-resident Indians (NRIs) on the heels of the country’s first nuclear tests that year. The government raised the equivalent of £2.3 billion in a couple of weeks. Two years later, it got over £3 billion with its Indian Millennium Deposits bonds.

Considering that India is the world’s largest recipient of remittances, Migration Policy Institute notes that little official attention has been given to the money flow, with direct and portfolio investments, and humanitarian or philanthropic assistance being the focus of official debate about the diaspora’s contribution to development.
The study goes on to theorize that the Indian government might see remittances per se as not “developmental” or self-sustaining, associating it with small-scale investment. It also observes that remittances are seen as the province of blue-collar migrants, whereas India’s diaspora strategy targets successful professionals, technicians, and entrepreneurs.

The study notes that the Philippine government’s development strategy is not diaspora-oriented.
It does mention LINKAPIL (Lingkod sa Kapwa Pilipino, or Link for Philippine Development), which channels financial and in-kind donations primarily from overseas Filipinos to projects in education, health care, small-scale infrastructure and livelihood, through a system called PHILNEED, which provides information on local development projects that need support. It reports that up to 2003, donations coursed through LINKAPIL comprised nearly $900 million.

On the whole, however, the assessment is that the Philippine government appears to treat both diaspora and OFW remittances as income flows rather than investment stock, and ”does not appear to have a strategy to maximize the developmental potential of established communities of Filipinos overseas, which might have a more lasting impact on poverty reduction” than direct income transfer.

The National University of Ireland’s National Institute for Regional and Spatial Analysis has devised a comprehensive framework for harnessing nationals abroad. The NIRSA Diaspora Strategy Wheel and Ten Principles of Good Practice lists eight key strategies for involving emigrant communities in homeland development.

Maximizing remittances and donations is one of them, but important ingredients in the mix are increasing knowledge about the diaspora and its own awareness of culture and affairs back home. Citizens rights and interests abroad are advanced, even as the way is facilitated for returnees. Business networks between motherland and adopted land are enhanced for economic growth, while long-term bonds are cultivated with those who feel special affinities with the old country.

Back home, the Economic Resource Center for Overseas Filipinos (ERCOF, est. 2003) also espouses strategies to tap the diaspora. On its website www.ercof.com are papers, conference proceedings, and development initiatives. Its brief concept papers expound on OFW bonds issued by local governments, diaspora support for rural banking and microfinance, overseas Filipinos’ involvement in Philippine politics, and remittance studies. Also instructive are proceedings of a 2002 international conference on economic links between overseas Filipinos and rural communities.

One further must-read study on harnessing expatriate Filipinos is the Asian Development Bank study, “Promoting Knowledge Transfer Activities Through Diaspora Networks: A Pilot Study on the Philippines.” One telling statistic cited in the report: in 1995, nearly half of OFWs had college degrees, compared with just one in every five workers back home. Clearly, the exodus of Filipino minds and hands are draining the pool of knowledge and skills. And with the global economy putting more and more of a premium on expertise, boosting national competitiveness demands that the Philippines finds effective ways to harness Filipinos abroad for transfer of knowhow.

The ADB report evaluates programs like the Balik Scientist scheme, business exchange councils, and philanthropic initiatives. Unpopular schemes include taxes and fees for departing expert nationals, and compulsory domestic service before going abroad. But more palatable and probably more productive too are initiatives targeting less developed, job-short areas for knowledge transfer, providing incentives for migrant groups to support former OFWs, and assessing and addressing brain drain in industry.

So next time one sees a line of OFWs at the airport check-in counters, let’s not see just another herd of cash cows to milk for families back home. With the right strategies, the Filipino diaspora can bring capital, knowhow and development, and become a top competitive advantage for the Philippines in the global economy. –RICARDO SALUDO, Manila Times

The first part of this column was published last Friday.

Bill Huang (M.A. Financial Economics, Fordham) is senior editor at the Center for Strategy, Enterprise & Intelligence (bill.huang@censeisolutions.com), which publishes The CenSEI Report providing analytic research of major national and global issues.