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View this email in your browser <https://mailchi.mp/law/perspective-300?e=763bcf158c> 哥伦比亚大学国际直接投资展望中文版都可以在我们的网站查看： http://ccsi.columbia.edu/publications/columbia-fdi-perspectives. <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=fecfec5d65&e=763bcf158c> *Columbia FDI Perspectives* Perspectives on topical foreign direct investment issues No. 300 March 22, 2021 Editor-in-Chief: Karl P. Sauvant ([log in to unmask]) Managing Editor: Riccardo Loschi ([log in to unmask]) *Engaging diaspora direct investors: The four elements of successful policy regimes* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=74ba6d3cad&e=763bcf158c> * <#m_5325168850398187605__edn1> by Daniel Naujoks ** <#m_5325168850398187605__edn2> Many migrants and diaspora actors engage in cross-border investment in firms in their country of (ancestral) origin.[1] <#m_5325168850398187605__edn3> Although such diaspora investments can be critical sources of capital, technology and know-how,[2] <#m_5325168850398187605__edn4> FDI policy regimes have focused too little on these flows, and policies often rely on mere anecdotes. Studies suggest that diaspora investment creates more local employment, is more stable and has more significant spillover effects than other FDI.[3] <#m_5325168850398187605__edn5> While recent studies have not confirmed these impacts,[4] <#m_5325168850398187605__edn6> diaspora investments are on average smaller than non-diaspora FDI, and often reach regions that are less attractive to other foreign investors.[5] <#m_5325168850398187605__edn7> Diaspora investments may also be “low hanging fruits” in home countries’ investment-promotion efforts that, with the right incentives and policy framework, add to the existing pool of foreign capital. As many governments seek investment from emigrant populations, the UN Global Compact for Migration <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=b1cfe63688&e=763bcf158c> encourages countries to develop targeted support programs facilitating diaspora investment. 60% of countries have at least one policy specifically to attract diaspora investors.[6] <#m_5325168850398187605__edn8> Half streamline bureaucratic procedures or allow transferability of financial assets. 42% provide tax exemptions or other financial incentives, and one-third have established preferential allotments of permits and licenses. One in four countries provides diaspora investors preferential access to credit. These practices are particularly prevalent in Latin America, where 4 out of 5 countries have adopted such schemes, followed by more than two-thirds of governments in Asia, Africa and Oceania. Only Europe trails behind, with fewer than one-third of countries adopting such measures. The key to successful diaspora investment-promotion policies is fourfold: - Public policies aimed at encouraging diaspora FDI are regularly based on anecdotes and assumptions. It is paramount to obtain data on the composition, potential and preferences of diaspora investors. Ethiopia, India, Senegal, and Tunisia are among the few countries that track diaspora investment. However, even in these countries, records are mostly limited to financial transactions that are declared as diaspora investments or take advantage of certain government benefits. In addition, instead of measuring actual investments, data are generally based on proposed and approved investment licenses. To further complicate measurement, in addition to diaspora actors investing their own funds, migrants managing foreign enterprises can induce their firms’ investments in their country of origin. Diaspora actors thus may be intermediaries for non-diaspora FDI. Importantly, diaspora investors should be treated as regular investors. Naïve assumptions of diaspora investors being predominantly motivated to “give back” lead to policy design flaws. - Policy frameworks should use a mix of measures. These include traditional investment incentive tools, such as covering certain costs, exempting investments from specific taxes, securing transactions, streamlining bureaucratic procedures, and creating virtual or in-person business-to-business platforms. Promotion activities should also showcase previous examples of diaspora investments to potential future investors. It may often be more effective to establish benefits and procedures for *all foreign investors*, while specifically targeting diaspora investors in outreach and dissemination strategies. - Policies must be scaled to have an impact—and impacts must be monitored. Certain policies’ lack of scale is often based on a combination of insufficient analysis that underpins such measures, and insufficient promotion of rights, processes and investment opportunities to actual and potential investors. It is essential to stop judging policies by their intention; instead, their impact on the volume, composition and effect of inward diaspora investments must be rigorously assessed. - To implement the above-mentioned recommendations, it may be advisable to create institutions specifically targeting diaspora investors. Often, it will make sense to integrate these within general investment promotion agencies. In some cases, they may be created within diaspora ministries or as stand-alone entities. These institutions can map diaspora populations and their capability and willingness to invest in their home countries, create meaningful communication platforms and design, and implement and monitor policies, including geotargeting of diaspora communities who settle in specific geographic areas. Diaspora FDI is not a “cure-all” for capital-starved economies. And there is no reason to believe that its impacts would be uniform across economic and social contexts. However, the right mix of policies and programs can facilitate additional flows of capital, technology and know-how—and thus lead to significant development benefits. ------------------------------ * <#m_5325168850398187605__ednref1> *The Columbia FDI Perspectives are a forum for public debate. The views expressed by the author(s) do not reflect the opinions of CCSI or Columbia University or our partners and supporters. Columbia FDI Perspectives (ISSN 2158-3579) is a peer-reviewed series.* ** <#m_5325168850398187605__ednref2> Daniel Naujoks ( [log in to unmask]) is Director a.i. of the International Organization and UN Studies Specialization at Columbia University’s School of International and Public Affairs. The author wishes to thank Liesl Riddle, Benjamin Graham and Riad Meddeb for in-depth discussions on diaspora investment policies, Vinod Mishra at the UN Population Division for sharing diaspora policy data and José de la Torre, Stephen Kobrin and Douglas van den Berghe for their insightful peer reviews and comments. [1] <#m_5325168850398187605__ednref3> Diasporic actors are persons who originate from a country, self-identify with that country and maintain meaningful cultural and social relationships with the country. However, policy definitions often rely merely on ancestry. [2] <#m_5325168850398187605__ednref4> Diaspora actors may also engage in portfolio investment, investing in capital accounts, diaspora sovereign bonds, and real estate. Migrant remittances can be linked to diaspora FDI but are a different form of monetary transfer. [3] <#m_5325168850398187605__ednref5> Liesl Riddle and Tjai M.Nielsen, “Policies to strengthen diaspora investment and entrepreneurship: Cross-national perspectives,” in Krishnan Sharma et al., eds., *Realizing the Development Potential of Diasporas *(Tokyo: UN University Press, 2011), pp. 23–51. [4] <#m_5325168850398187605__ednref6> Benjamin A.T. Graham, *Investing in the Homeland: Migration, Social Ties, and Foreign Firms* (Ann Arbor: University of Michigan Press, 2019). [5] <#m_5325168850398187605__ednref7> Daniel Naujoks, “Paradigms, Policies and Patterns of Indian Diaspora Investments”, in Radha S. Hegde and Ajaya K. Sahoo, eds., *Routledge Handbook of the Indian Diaspora* (Milton Park: Routledge, 2018), pp. 90-103. [6] <#m_5325168850398187605__ednref8> Or 59 out of 99 countries with data, UN, *World Population Policies 2019: International Migration Policies* (New York: UN, 2019). <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=75d96bd303&e=763bcf158c> *The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Daniel Naujoks, ‘Engaging diaspora direct investors: The four elements of successful policy regimes,’ Columbia FDI Perspectives No. 300, March 22, 2021.” Reprinted with permission from the Columbia Center on Sustainable Investment (**www.ccsi.columbia.edu* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=b784ebfd7e&e=763bcf158c>*).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at **[log in to unmask]* <[log in to unmask]>*.* For further information, including information regarding submission to the *Perspectives*, please contact: Columbia Center on Sustainable Investment, Riccardo Loschi, [log in to unmask] *Most recent Columbia FDI Perspectives* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=66f45d053a&e=763bcf158c> - No. 299, Axel Berger and Manjiao Chi, ‘The EU-China Comprehensive Agreement on Investment: Stuck half-way?,’ Columbia FDI Perspectives, March 8, 2021 - No. 298, Karl P. Sauvant and Louis T. Wells, ‘Obsolescence of the obsolescing bargain: Why governments must get investor-state contracts right,’ Columbia FDI Perspectives, February 22, 2021 - No. 297, Maria Borga and Monika Sztajerowska, ‘Divestments by MNEs: What do we know about why they happen?,’ Columbia FDI Perspectives, February 8, 2021 *All previous FDI Perspectives are available at * *http://ccsi.columbia.edu/publications/columbia-fdi-perspectives/* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=110b3f808f&e=763bcf158c> *. * *Other relevant CCSI news and announcements* - *New volume published!* The Yearbook on International Investment Law and Policy <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=8728c294ee&e=763bcf158c> (edited by CCSI's Lisa Sachs, Lise Johnson, and Jesse Coleman) monitors current developments in international investment law and policy. Part One focuses on trends in foreign direct investment, international investment agreements and investment disputes, and Part Two looks at central issues in the contemporary discussions on international investment law and policy. This volume <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=8e334bdfb5&e=763bcf158c> includes a chapter by CCSI's Jesse Coleman, Lise Johnson, Ella Merrill, and Lisa Sachs. Please visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=fbf9eab21e&e=763bcf158c> for more information and to automatically receive a 20% discount! - *CCSI is Hiring!* The Columbia Center on Sustainable Investment is hiring a Program Associate. Reporting to the Director of CCSI, the incumbent will support a wide range of research, operational, and administrative responsibilities. Please see here <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=fd5bbe9157&e=763bcf158c> for more details and to apply. Applications will be reviewed on a rolling basis. - *CCSI is accepting applications until March 31, 2021* for its Executive Training on Sustainable Investments in Agriculture, which will take place online June 15-25, 2021. Please visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=fbb65227a1&e=763bcf158c> for more information, including on how to apply. Karl P. Sauvant, Ph.D. Resident Senior Fellow Columbia Center on Sustainable Investment Columbia Law School - Earth Institute Ph: (212) 854-0689 Fax: (212) 854-7946 *Copyright © 2021 Columbia Center on Sustainable Investment (CCSI), All rights reserved.* [log in to unmask] *Our mailing address is:* Columbia Center on Sustainable Investment (CCSI) Columbia Law School - Earth Institute, Columbia University 435 West 116th Street New York, NY 10027 Add us to your address book <https://columbia.us6.list-manage.com/vcard?u=ab15cc1d53&id=a61bf1d34a> unsubscribe from this list <https://columbia.us6.list-manage.com/unsubscribe?u=ab15cc1d53&id=a61bf1d34a&e=763bcf158c&c=153936301d> update subscription preferences <https://columbia.us6.list-manage.com/profile?u=ab15cc1d53&id=a61bf1d34a&e=763bcf158c&c=153936301d> [image: Email Marketing Powered by Mailchimp] <http://www.mailchimp.com/email-referral/?utm_source=freemium_newsletter&utm_medium=email&utm_campaign=referral_marketing&aid=ab15cc1d53&afl=1> -- *Karl P. Sauvant, PhD* *Resident Senior Fellow* *Columbia Center on Sustainable Investment* Columbia Law School - The Earth Institute, Columbia University 435 West 116th St., Rm. JGH 825, New York, NY 10027 | p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask] | w: www.ccsi.columbia.edu | t: @CCSI_Columbia <https://twitter.com/CCSI_Columbia> "Multinational Enterprises and the Global Investment Regime: Toward Balancing Rights and Responsibilities”, “The *WIR* at 30: Contributions to National and International Policymaking", "An Inventory of Concrete Measures to Facilitate the Flow of Sustainable FDI: What? Why? How?", "Note on the Costs and Financing of an Advisory Centre on International Investment Law", "Insulating a WTO Investment Facilitation Framework from ISDS", "Advancing Sustainable Development by Facilitating Sustainable FDI, Promoting CSR, Designating Recognized Sustainable Investors, and Giving Home Countries a Role", "Making FDI more Sustainable", "The Case for an Advisory Centre on International Investment Law", "The Potential Value-added of a Multilateral Framework on Investment Facilitation for Development", "International Investment Facilitation: By Whom and for What?" are available at https://ssrn.com/author=2461782 . ____ AIB-L is brought to you by the Academy of International Business. For information: http://aib.msu.edu/community/aib-l.asp To post message: [log in to unmask] For assistance: [log in to unmask] AIB-L is a moderated list.