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Fadzai Chingozhoro Correspondent
We live in a global village where interconnectedness and globalisation has become the order of the day.
The Diaspora community is at the core of this discourse, and it needs to actively participate in the affairs of its home country. Therefore, efforts by the Second Republic to engage this crucial constituency is commendable.
Foreign Affairs and International Trade Minister Ambassador Frederick Shava has committed to fully engage this important pool of brand ambassadors, which is testimony to the Second Republic’s thrust of moving from Old Diplomacy to New Diplomacy.
Unlike Old Diplomacy, which was mainly State-centred, the advent of New Diplomacy embraces non-State actors to be part of establishing and mending international relations.
It is interesting to note how the Diaspora has continued to contribute to the growth of the country’s economy through foreign currency remittances. Figures from the Ministry of Finance and Economic Development indicate that remittances from the Diaspora have now overtaken foreign aid.
This shows how the Diaspora community maintains umbilical links with the Motherland. In 2020, Zimbabweans in foreign lands sent home a total of US$1 billion, a significant contribution to the local economy. This buttresses the fact that remittances are the strongest link between human mobility and development.
From a macro-economic perspective, remittances contribute to stability by lowering the probability of account reversals, since they are a stable source of foreign currency.
It is further argued that when international reserves are falling, or external debt is rising, remittances can contribute to macro-economic stability in times of emergency as they are measurable and predictable.
In light of the illegal economic sanctions imposed on Zimbabwe by some Western countries, which are bedevilling the country, a boost in investments through Diaspora development investments (DDI) from companies connected to citizens based in foreign countries may be the panacea required to bolster productivity.
Diaspora members can foster such investments in various ways. For instance, Zimbabweans who are top executives of multinational firms can use their managerial and technical expertise to persuade their respective companies to invest in the country.
Also, those who are managers or owners of firms, whose parent companies are in Zimbabwe, may work with start-ups and help them develop and finance viable projects.
Diaspora investments have the potential to bring in knowledge on emerging markets, skills, superior technology, and improved business practices in addition to financial capital. Positive externalities and spill-overs take effect when local firms observe and imitate practices by foreign investors.
The Zimbabwe is Open for Business call can be realised through supporting free trade economics philosophy, which advocate labour, goods and capital as factors of production that should be allowed to move freely in order to maximise welfare gains at both personal and global levels.
Additionally, Diaspora-related foreign firms benefit from established social links between those in foreign lands and local entrepreneurs which may help them reduce transaction costs on new entries. New partnerships can also be built.
This is so because in business there is a strong link between social networks and firm performance, since Zimbabwe is largely an informal economy. Diaspora social networks in the homeland are also effective enablers of trust and contract enforcement.
Moreover, Diaspora-owned firms, or firms managed by Diaspora members, can act as the “first movers” into a country. This may act as a catalyst for further investment from other companies by providing market and operational information about the mother country to potential investors.
Relationships with buyers, suppliers, partners, government officials, and lending institutions in the homeland can also be brokered.
With scores of Zimbabweans scattered around the world possessing skills, or studying, there are higher prospects in the foreseeable future of brain gain. At some point, these well-skilled and talented migrants will return to their home country and bring knowledge, capital, and access to advanced markets as well as give advice to local entrepreneurs.
Therefore, they are a force to reckon with.
In terms of trade and investment flows, the Diaspora facilitates bilateral trade and investment streams between their country of residence and their homeland through matching producers of consumer goods in one country with appropriate distributors in the other. Hence, in future there is a need to create a Diaspora taskforce comprising experts in diverse fields so as to promote service and technical exchange programmes. Investment opportunities may also be explored in line with expectations of Vision 2030.
Online Reporter