Contribution of Diasporas to the Economic Development

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Table of Contents

Introduction
Background
Key Scholars and Theoretical Frameworks
Nigerian Diasporic Networks
Conclusion
Reference List

Introduction

Globalization has had a huge impact on the world economy, and on the growth of geographical mobility of the workforce in particular. Huge masses of people change their habitat, type of settlements and sphere of activity in relatively short time intervals. At the same time, they find themselves in a new, unusual environment for themselves, among people. It has a different way of life, a different system of secular and religious values and speakers of a different language. The growth of the absolute and relative share of diasporas leads, respectively, to an increase in their absolute and relative contribution to the economy. This work considers the diaspora as one of the most important subjects of the economic processes of our time. All economic processes related to the diaspora are developing in line with broader ethnic, social and economic trends of modernity.

As a combination of all the new processes of globalization, a major trend is developing: diasporas are playing an increasingly important role in the economic sphere. At the same time, their economic potential becomes commensurate with the economic potential of the States on the main territory. In some situations, it may even exceed the potential of the ethnic groups forming the environment. Today, many members of diasporas, while retaining their ethnic and religious affiliation, change their citizenship, and as a result become associated parts of other nations. In the era of globalization, such a previously private pattern becomes one of the universal ones. The number of people with dual citizenship who simultaneously participate in the economic life of two or more states, nations and ethnic groups is growing. For example, investing in the economy of some states, they direct the earned funds to their historical homeland, pay double taxes, etc. Thus, diasporas contribute to the economic development of local communities to a much greater extent.

Background

Diasporas as subjects of the cultural and historical process are as ancient as ethnic groups and confessional communities themselves. This can be judged based on the oldest written sources and ethnographic materials about ethnic groups that have pre-state forms of social organization. The socio-demographic structure of diasporas can act as a prerequisite for leadership in the economy (Welde et al., 2020). The most famous of all the variants of the genesis of diasporas is their appearance as a result of resettlement from their historical homeland. The flow of migrants is dominated by men of working age, with a level of education and vocational training above average, as a rule, energetic and enterprising (Stone & Scott, 2018). Thus, migrants are more economically active in comparison with the average characteristics of the initial community.

This phenomenon is partly spontaneous, partly purposefully controlled by states interested in the influx or restriction of any categories of migrants. Many states practiced recruitment or, conversely, introduced restrictive quotas in accordance with the age, professional, property, etc. level of migrants (Koinova, 2018a). As a consequence of these spontaneous or purposeful selection, the economic role of the diaspora may be higher than the average in the surrounding society (Seraphin et al., 2019). This is manifested, in particular, in the standard of living, which can be significantly higher than in the historical homeland.

Key Scholars and Theoretical Frameworks

The degree of influence of diasporas on the economic development of the receiving and sending countries is an urgent topic for the work of many researchers. The theoretical frameworks regarding this topic touches on such different aspects of the problem. These are employment and solidarity of migrant workers, as well as the impact of migration on the socio-economic development of countries (Carment & Calleja, 2018). In their works, scientists address various, sometimes opposite aspects of the role of participation of diasporas, migrant workers, remittances and human capital in economic development.

The theoretical framework is interconnected with the processes of globalization of the world, the contact of local cultures, and the formation of new socio-cultural identities. In the 1990s, a new direction for research appeared in it — the transnational approach. It should be noted the developments of the American sociologist Peggy Levitt, who has repeatedly been published in collaboration with Glick-Schiller on the problems of the theory and methodology of the transnational approach (Levitt & Schiller, 2004). She is a major representative of the sociological direction in the study of the phenomenon of transnational. In addition, Levit is credited with introducing the topic of transnational diasporal corporations into scientific discourse.

The concept of “transnational social space”, introduced by the aforementioned scientists, caused a flurry of criticism from sociologists. Waldinger (2017) developed the theory by writing a paper about the limits of transnationalism. He considers it methodologically erroneous to consider a national state without connection with a specific territory (Waldinger, 2017). At the same time, Waldinger is impressed by the very idea of social interactions over diasporas and territorial borders. However, he still suggests replacing the concept of “transnational social space” with the concept of “deterritorialized national state”(Waldinger, 2017). An important factor for him was the involvement of diasporas in the state market, which led to the formation of stable international economic interactions.

One of the aspects of studying the diaspora is its elements. The concept proposed focuses on the elements in which, according to the author, the essence of the phenomenon of the diaspora is reflected. Diasporas are mostly formed as a result of forced eviction. As a result, large groups of people or even entire communities find themselves outside the country of origin (Guo, 2021). At the same time, voluntary emigration of individuals and small groups may take place, which also leads to the emergence of enclaves in host countries. The basis of the diaspora is a community that already has a clearly defined identity formed in the country of exodus.

It can be seen that some characteristics in all concepts are consistent and complement each other. For example, in the concept of Hannaford, the provision on the violent nature of resettlement is highlighted (Hannaford, 2018). The position of concept Hannaford about collective memory as a fundamental element of the identity of the diaspora group is important (Hannaford, 2018). The same opinion is shared by Lapshyna, stating that self-awareness and self-determination as a diaspora is largely connected with the collective memory connecting local communities (Lapshyna, 2019). Collective experience and collective memories prevent cultural forgetting and preserve the diaspora as a whole.

The thesis about maintaining links between communities in concept Hannaford partially coincides with the idea of Han about the communication networks of the diaspora. As opposed to Lapshyna, Han highlights the ability of the Jewish diaspora to intensive communication (Han, 2018). This point determines the transnational nature of the diaspora. The very fact of the presence of parts of a particular ethnic group in at least two countries allows us to conclude that there is a transnational network of relations (Meillassoux, 2018). Undoubtedly, at present this is a characteristic feature, if not of all, then of the vast majority of both classical and modern diasporas.

The above approaches take into account various aspects that determine the phenomenon of diaspora. It is important that the organization of the diaspora itself can extend far beyond the borders of one country. In this case, scientists are talking about creating a network of social institutions of the diaspora in various countries and transnational spaces (Lacroix et al., 2016). Most scientists agree that it is possible to talk about the diaspora space. It covers not only sociological aspects of the diaspora community, but also representatives of the economical incentives.

Nigerian Diasporic Networks

Case Study from Nigeria

The African continent (including Nigeria) makes a significant contribution to the growth of the number of migrants in the EU. In comparison with the other two vast areas of migration from South to North – Asia and Latin America – Africa occupies a middle position (Grunsven, 2019). The relative level of migration (average annual immigration minus emigration) from Africa exceeds the Asian level and is inferior to Latin American.

Diasporas alleviate the livelihoods of their relatives and their own communities through the diaspora association. The peculiarities of the development of new conditions and forms of adaptation, new socio-economic realities show that national non-profit organizations acquire additional meanings, goals and functions (Hack-Polay & Siwale, 2018). Diasporas become producers of migrants’ social capital capable of qualitatively transforming their socio-economic and political position in the host society. Similar mechanisms have been noted in relation to Nigerian migrants in the formation of the territorial identity of migrants (Zapata-Barrero & Rezaei, 2019). They also influenced adaptation to a new place through socio-environmental, economic, cultural and other strategies.

The diaspora association enables diasporas to access a wider range of political connections and government sponsors to enhance the economic development of their relatives and their communities. This is due to the fact that the resources of the diaspora (in fact, their elite) are based on the solidarity of community members (Prinz & Siegel, 2019). Solidarity forms a wide range of mechanisms for strengthening the entire community – from political mobilization to the concentration of material resources in lobbying (Levitt, 1998). Diasporas can use their own culture (literature, religious organization, cuisine features) to form an image that will determine the actions of political actors. These resources relate to socio-political and economic, and improve the quality of life of all members of the community.

Diasporas would not have as much influence on their communities’ economic development without the base the diaspora association provides. The interaction of representatives of diasporas within a single society is a cost-effective tool (Waldinger, 2001). International cooperation is conducted through diasporas in the implementation of the economic policy of states (Koinova, 2018b). They act as an instrument for the realization of the economic interests of their homeland. Diasporas are also useful to the host country in establishing and maintaining economic contacts with their ethnic homeland.

Nigerian diasporas are quite successful in mobilizing diasporas globally to form various associations. For example, the Nigerian Seafarers’ Union has serious economic influence and has weight for shipping companies (Alonso & Mylonas, 2019). After several major strikes, the sailors recognized this union as an equal party in negotiations and discussion of the situation on the labor market. The Remember Saro-Wiwa group is engaged in a wide variety of activities, ranging from art and culture, ending with the protection of human rights and environmental projects (Triandafyllidou, 2018). The Nigerian Youth League, which has a representative office in Nigeria, and the XN Foundation, which also pays attention to the problems of people with disabilities, are strong in youth topics (Levitt, 2005). They can finance local infrastructure development projects and influence government policies.

Tensions Between Diasporas

The tension between Nigerian diasporas and their local communities is most often associated with the professed religion. In the future, further aggravation of the conflict between Muslims and Christians in Nigerian diasporas may lead to the division of communities along confessional lines. Inter-communal relations in the Nigerian diasporas are characterized by an extreme degree of tension. It has especially intensified since the late 80s of the last century (Inouye et al., 2019). It is associated with the growing influence of fundamentalist religious movements (especially Islamic ones) around the world.

Not all development plans made by diasporas necessarily benefit the local communities. For example, in the Nigerian diasporas, great importance is paid to the preservation of the cultural system, which negatively affects the economic one. There is a strict gender roles division in Nigerian households, in which women play a leading role in raising children and running the household (Krasniqi & Williams, 2018). Men are assigned an exclusive duty to provide for the family, which leads to significant economic losses (Smith & Guarnizo, 1998). The authority of parents and the older generation is high, which often takes responsibility for the younger generation as a whole. Thus, conservative sentiments prevail in the Nigerian diasporas, which hinder economic progress.

Moreover, the power relations between diasporas and those who were ‘left behind’ are often ambiguous. For example, many diasporas have an opaque economic structure: an account is open, and the purpose of mandatory donations is not always known (Fossati, 2018). Large diasporas are able to form a national niche in the country’s economy. For example, they can organize national enterprises consisting of representatives of a particular ethnic group (Fiddian-Qasmiyeh & Daley, 2018). Periodically, for the purpose of rapid economic integration, diasporas aggressively occupy entire business sectors, turning them into oligopolies.

Nigerian diasporas are not homogenous that leads to tensions within the association as diasporas have different political and economic desires. For example, Nigerians from the hinterland are actively promoting the idea of primary patriotism. All their activities are aimed at helping and supporting, first of all, the place of their birth – the village, the city, the district (Carling, 2008). The political and economic desires of this group of migrants are aimed at the subsequent return to their native lands with the capital already accumulated for the purchase of housing, business, trade (Elo et al., 2019). In these diasporas, the attitude towards whole groups of people whose migration from Nigeria is permanent and irrevocable is negative.

Disagreements also arise in male and female diasporas: they have different views on how their influence should be used. The differentiation of the population inevitably hinders the construction of a unified system within the entire diaspora. For example, in some regions, families headed by women are considered normal (De Haas, 2005). However, due to the predominance of patriarchal foundations, men often hinder the influence of women in political or economic spheres (Basch et al., 1993). They try to limit the activities of their wives to raising children and running a household, which is negatively perceived by the female diaspora.

Lesser Economical Contributions

Diasporas did not play a significant role in the rapid growth of the country as a whole. The Chand’s study, when comparing data at the international level, showed that in developed European countries, its positive impact is close to zero, or 0.5% of GDP (Chand, 2018). The study analyzed the migration of the last 50 years (Chand, 2018). The study concludes that migrants from Nigeria do not make a significant contribution to the country’s budget. The age and qualifications of Nigerian migrants have a significant impact on whether they invest in the host country’s economy or deplete it.

Nigeria’s growth has been facilitated by a fast-growing manufacturing industry built on Nigeria’s financial, and service industry. In addition, a significant role in this process was played by abundant oil supply which is approximately 2.7% of global supply (Adamson, 2019). Moreover, the Nigerian diaspora carries out the largest sub-Saharan inflow of funds to Africa. The dynamics of the growth of transfers is indicative: at least once every few months, approximately one in ten Nigerians sends funds to Nigeria (Xaynazarov & Pardaev, 2020). The transferred funds are used to finance political parties, education, and business development. Thus, the money earned by members of the Nigerian diaspora goes to the development of the host country only to a small extent.

These require large-scale and long-term investments in infrastructure which can be difficult to achieve by diasporas alone. Hence, diasporas can be seen as contributing to a lesser extent to the national economy when compared to that of their communities. The growth in the Nigerian economy is mainly driven by the growth of the industrial and service sectors. In addition, banking and telecommunications services have grown significantly. Despite the growth of the economy, Nigeria has a rather backward infrastructure (Ojong, 2016). The country is not an attractor for business, and the level of international investment is at a fairly low level. This is proved by the fact that the Nigerian diasporas have little influence on the change in the economic situation.

Diasporas did play a role in the development of Nigeria as a whole to some extent. However, their effects were not significant compared to large-scale state-led projects which were often supported by FDIs. The Government of Nigeria is implementing new legislative measures aimed at encouraging FDI in the traditional form (Levitt, 2005). Thus, restrictions on investment activities leading to the creation of enterprises that are fully owned by foreign companies have been lifted. These enterprises, as a rule, are technologically better equipped and able to work more efficiently than local firms. It is this fact that leads to an increase in national capital at the expense of foreign capital, the contributions of members of the diaspora are insignificant. Although the diaspora community may have pushed for these state-led infrastructure projects, these projects would have gone forward with or without diaspora support (Koinova & Tsourapas, 2018). This conclusion can be based on the increase in interest from international investors in Nigeria as a destination for investment. Moreover, the government’s willingness to invest heavily in infrastructure also contributes to this inference.

Conclusion

In this paper, the trends and features of the development of the largest diasporas from Nigeria were identified. It was found that diasporas are heterogeneous and very difficult to study, especially in modern conditions. This paper also assessed the influence of the Nigerian diaspora on the policies of the host countries and the foreign policy and economic course of the country of origin. A lot of literature is devoted to various aspects of the life of the Nigerian diaspora. The basis of its existence – labor activity – has been studied in sufficient detail.

In general, the contribution of the diaspora to the Nigerian economy cannot be assessed unambiguously. Its activities do not contribute to the growth of such basic indicators as GDP, exports, and average incomes of the population. The transfer of savings made by the Nigerians to their ethnic homeland does not contribute to the development of the economy either. The influence of the Nigerian diasporas on the economic development of the sending and receiving countries turned out to be low. Capital, labor and entrepreneurial experience of representatives of the Nigerian diaspora have not become the largest component of the economies of these countries.

Remittances to the homeland, which have a very high relevance in the global economy, occupy an insignificant segment of the Nigerian economy. The country’s economic growth is achieved to a much greater extent with the help of such instruments of influence as foreign direct investment. The mobilization of the diaspora for the purpose of financial assistance to the motherland has a rather low efficiency compared to other methods. In addition, the export of labor capital to other countries causes wariness among indigenous ethnic groups.

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