OCCASION OF THE UNITED NATIONS SUMMIT ON THE                                                                  MILLENNIUM D...
ContentsA.   Definition of Key Terms     1.0   Emerging Diaspora Markets     2.0   Diaspora EconomyB.   Official Recogniti...
A. DEFINITION OF KEY TERMS1.0      Emerging Diaspora Markets (EDM)Emerging Diaspora Markets or EDM, for the purpose of thi...
C. EXECUTIVE SUMMARY4.0      Background, Opportunity and Goals4.1      BackgroundResponding to the latest call for global ...
With regards to our business interest in the initiative, in addition to our role as lead developer, we arecommitted to tur...
alone for 29% of long distance telephone revenue and 37% of local telephone service revenue. Movingbeyond the telecom sect...
D. IMPLEMENTATION ARRANGEMENTS5.0      Our overall strategyTo implement the initiative our strategy involves:        •   A...
Examples of products and tools may include, but are not limited to:        o   Tools for leveraging public sector financin...
5.3.3    Diaspora Bond DevelopmentTarget Development Sector: Diaspora FinancingDiaspora bond projects are country specific...
5.4      CampaignThe strategy to promote an on-going EDM campaign has already produced two important exploratorygathering ...
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Executive Summary Emerging Diaspora Market Initiative

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Executive Summary Emerging Diaspora Market Initiative

  1. 1. OCCASION OF THE UNITED NATIONS SUMMIT ON THE MILLENNIUM DEVELOPMENT GOALS September 20-22, 2010 20EXECUTIVE SUMMARY 11 October 2010 Original: EnglishDraft Version 1.4 Initiative on “Emerging Diaspora Markets” & Seed Investment Project to Develop the Sectors Projects Highlights Creating a Network Economy between Developed and Developing Countries Developing the n Asset Class of Investment next Rethinking Global Capital Flow Directing Capital towards Least Developed Countries Making Diaspora Bond a Reality Summary of Lead Investment Projects © 2010 Xen Pi Co. & Associates New York, USA All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, whether electronic, mechanical, photocopy, recording or tronic, photocopy otherwise, without prior permission of Xen Pi Co & Associates. ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  2. 2. ContentsA. Definition of Key Terms 1.0 Emerging Diaspora Markets 2.0 Diaspora EconomyB. Official Recognition Framework 3.0 World Conference on the Financial and Economic Crisis in 2009 and World Summit on the Millennium Development Goals in 2010C. Executive Summary 4.0 Background, Opportunity and Goals 4.1 Background 4.2 Opportunity and GoalsD. Implementation Arrangements 5.0 Our Overall Strategy 5.1 Implementation Team 5.2 Leadership Advisory Panel 5.3 Lead Investment Projects: (Briefs) 5.3.1 A Growth Fund on EDM 5.3.2 EDM Country-Specific Funds 5.3.3 Diaspora Bond Development 5.3.4 A Telecom Alliance 5.3.5 A Creative Industry Alliance 5.3.6 A Banking-Community Partnership 5.4 Campaign 5.5 Research & Policy Development ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  3. 3. A. DEFINITION OF KEY TERMS1.0 Emerging Diaspora Markets (EDM)Emerging Diaspora Markets or EDM, for the purpose of this document, refers to the ethnic segment of thepopulation of a high income country, made up of migrants and their descendants, with purchasing powerand a dual sense of obligation and belonging to consume in their country of residence and at the sametime in the country of origin.2.0 Diaspora EconomyDiaspora Economy, for the purpose of this document, refers to the income or wealth generated by the sumof expenditures of developing country citizens living in high income host countries as local ethnicconsumers and as international remitters. B. OFFICIAL RECOGNITION FRAMEWORK3.0 World Conference on the Financial and Economic Crisis in 2009 and World Summit on the Millennium Development Goals in 2010The two most recent international gatherings, the World Conference on the Financial and EconomicCrisis in 2009 and the latest World Summit on the Millennium Development Goals in 2010, havereiterated a global sense of urgency about mobilizing international private flows towards lesser developedcountries, in recognition that foreign capital flow is a vital complement to national development. Leastdeveloped countries need to mobilize both domestic and external private resources in order to accelerateeconomic growth, create jobs, reduce poverty, and make progress towards meeting the MillenniumDevelopment Goals. Most of the emerging markets that do relatively well as far as Foreign DirectInvestment (FDI) per capita is concerned are either natural resource (energy) producers or small tourismislands. Countries prone to conflict and political turmoil are less attractive to FDI and private equity, andare by contrast highly reliant on the flow of remittances from their migrants as their most productive andunfailing source of income.Leaders at these conferences are committed to accelerate progress in the next five years by bringinggovernments together with the private sector to enhance collaboration and effectiveness on projects thatcould not be launched or completed without strategic partnerships with key stakeholders across sectors,industries and regions. ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  4. 4. C. EXECUTIVE SUMMARY4.0 Background, Opportunity and Goals4.1 BackgroundResponding to the latest call for global action on international private capital flows, Xen Pi Co. &Associates has spearheaded two groundbreaking events dealing on the issue. One outcome of thosegatherings is the idea of creating an initiative on Emerging Diaspora Markets (EDM).Xen Pi’s first event entitled, “Emerging Diaspora Market: Could it be Stimulated to Fuel Capital Flowbetween Developed and Developing”, took place on the occasion of the World Conference on theFinancial and Economic Crisis in June 2009. Held in collaboration with Columbia University, theBusiness Council for the United Nations, the Governments of Liberia, Benin and the DominicanRepublic, the event served to introduce the world community to a new way at looking at the flow ofcapital between nations, with the objective of stressing the need to mobilize and develop the remittancephenomenon to its full potential.The second event, “World Forum on the Diaspora Economy”, took place on the occasion of the UNSummit on the Millennium Development Goals (MDGs) in September 2010. The event shed new lighton the present state of the Diaspora Economy, emerging business opportunities in that segment ofindustry, and the economic impact across borders on countries hosting migrants and countries reliant ontheir remittances. The event drew support from the Mission of Guatemala, the Mission of Yemen, theChairmanship of the Group of 77, the Mission of Nepal, the Chairmanship of the Group on LeastDeveloped Countries, the Mission of Benin, (host of the very first international conference onRemittances on the LDCs in 2006), and, finally from the Bureau of the Special Adviser on Africa.These two events held in successive years mark an essential first steps towards mobilizing nations’diaspora economies in such a way that new economic linkages are created or enhanced between countries.4.2 Opportunity and GoalsThe potential for new economic linkages is based on an often-overlooked fact: The opportunity exists toharness the purchasing power of millions of ethnic consumers living in major diaspora host countries likethe United States of America, the United Kingdom, France and Canada, in order to organize nations’diaspora economy, via capital flow, in such a way as to foster a formal and sustainable network economybetween countries—both developed and developing, but in particular, the least developed. The initiativeon Emerging Diaspora Markets (EDM-initiative) is aimed at engaging the international community andacademia to work in close collaboration with the private sector to capitalize on this opportunity. Wehave led the development of the initiative from the start through a series of events designed to lay theintellectual and network foundation for a portfolio of investments and academic research. The initiativecame together in the interest of all, investment community and international community. The goal is todevelop capacity and promote a whole new asset class of investments alongside traditional foreign flows.Once established, The EDM-flow will create wealth while serving as a conduit for capital to flow intomany lesser developed countries. ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  5. 5. With regards to our business interest in the initiative, in addition to our role as lead developer, we arecommitted to turning the initiative into a number of concrete deliverables: • An EDM growth fund. • EDM country funds to help member nations to develop “cross-border infrastructures”. • A vehicle to pool-in diaspora bonds. • A university-based research program on EDM. • A portfolio of seed investment projects to develop EDM sectors.The EDM initiative is based on a simple rationale. Can not the economic power of developing countrycitizens living in high-income host countries be mobilized to achieve much more than it already has? Atpresent, the economic contribution that they make serves as an engine of growth for the host country’seconomy and as a vital source of income for a host of home countries reliant on the financial support oftheir migrants. Products - Services - Investments Host Country Country of Origin Emerging Diaspora Needs Market (EDM) Capital Flow Cross-border Infrastructure Investment Channels (Hubs) Global Investors Consumer-Investors MODEL OF A NETWORK ECONOMY LINKING COUNTRIES DEVELOPED WITH DEVELOPINGWe have coined the term Emerging Diaspora Market merely to lend identity to a market that, up until thisinitiative, existed only in separate realms: Ethnic and Remittance. Emerging Diaspora Market, by ourdefinition, is the market that is generated by the sum of its parts, equalling to the economic activity outputof millions of developing country citizens living in a high-income host country like the United States, theUK, and France as ethnic consumers and as remitters. A case in point, in 2006, the diaspora in the UnitedStates sent home more than $100 billion in money transfers while being responsible in the telecom sector ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  6. 6. alone for 29% of long distance telephone revenue and 37% of local telephone service revenue. Movingbeyond the telecom sector to consider their overall consumption as ethnics, the market which we seek todevelop is significant. EDM as an evolving concept is rooted in the growing international recognitionthat ethnics have long been at the centre of two economies having consistently demonstrated their dualsense of obligation and belonging to consume in their country of residence and at the same time in theircountry of origin.The emergence of the EDM initiative at the time of global economic slowdown in foreign directinvestment and emerging market private equity around the world coincides with real opportunities to tapthe demand of ethnics in the U.S. market in particular, in the form of products such as food, telecom,media, entertainment, insurances, real estate, deposit accounts, calling cards, on-line payments, moneytransfer, diaspora bonds, mutual funds, and loans. Some of this demand ends with local consumption, butmuch of it is “diaspora-originated”, meaning paid for in the country of residence for delivery or end-usein part in the immigrants’ countries of origin. The growth potential of EDM lies in those kinds of cross-border transactions. EDM products are poised to connect the savvy ethnic investor with an opportunitywhich stretches beyond the point of origination.The EDM initiative is designed to meet one of the most important challenge facing domestic capitalmarkets in developing countries today; the lack of market scale and capitalization. The initiative sets outto prove that the “lesser developed a country, the more attractive can be its EDM to the investmentcommunity”. A quick glimpse at the US-Emerging Diaspora Market relationship points to an untappedEDM proposition that is poised to have major economic impact on countries across the globe, especiallythose that are often overlooked if not neglected by the world’s investment capital market. Although anEDM investment is diaspora-originated, the business of EDM is transnational. It therefore demandscross-border infrastructure channels that will benefit both investors and developing countries badly inneed.We recognize that while government has the primary responsibility for a country’s development, theprivate sector—as a driver of innovation, investment and job creation must lead. As such, we, as abusiness entity, brings a core of assets to lead the initiative through the paradigm shift that will berequired in order to get governments, donors, and multi-national corporations to effectively align theirefforts to develop emerging diaspora markets. ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  7. 7. D. IMPLEMENTATION ARRANGEMENTS5.0 Our overall strategyTo implement the initiative our strategy involves: • An implementation team. • A leadership advisory panel on EDM. • Development of a portfolio of seed investment projects to develop the sectors. • A framework for an on-going campaign. • A framework for on-going research & policy development. Leadership Initiative Implementation Advisory Panel Team Campaign Research & Seed Investment Policy Projects5.1 Implementation TeamOur team consists of a loose association of experts and consultants led by Harvey Dupiton. The team isresponsible for the establishment of the leadership advisory panel, a framework for an on-goingcampaign, as well as for research & policy, and the incubation of a portfolio of seed investment projects.In an effort to gather additional resources, we are in the process of recruiting organizations andindividuals, both within diaspora communities and beyond, who are able to provide support worldwide.Key targets are private and public sector providers of debt, equity, technical assistance, grants, andguarantees, as well as expert volunteers.5.2 Leadership Advisory PanelThe Leadership Advisory Panel is currently in formation to involve stakeholders from the public andprivate sectors. The panel will be responsible for guiding the development of a specific set ofproducts and tools, which will enhance private investment opportunities in Emerging DiasporaMarkets. ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  8. 8. Examples of products and tools may include, but are not limited to: o Tools for leveraging public sector financing. o Model investment policies for investing in EDM. o Prototypes for new or modified investment and/or financial instruments for EDM. o Provisions for financial risks mitigation to protect investors and providers of finance (debt and equity) from political, regulatory, and other risks. o Recommendations for improving the alignment of state economic and workforce investment programs.5.3 Seed Investment Projects (Briefs)As proof of concept, we have developed a number of business proposals which we are referring to as seedinvestment projects to emphasize the core value of each of these proposals as permanent infrastructure-building channels to make EDM-flow possible across national borders. Below is a brief summary ofthese projects and their target development sectors.5.3.1 An EDM Growth FundTarget Development Sector: InvestmentThe project to develop the EDM-investment sector is a growth fund. The fund is in development. It willbe based in the United States and will target investments in three primary sectors: Media andEntertainment, Telecom and Consumer Products. The fund shall focus on developing hubs (infrastructurechannels) that link major diaspora markets in the US, France, the UK, and other developed countries withopportunities in developing countries in Latin America, Africa, Asia, and Eastern Europe. The hubs cantake the form of everything from online stores and trading platforms to investment instrument sold inbond markets.Status: In Development5.3.2 EDM Country-Specific FundsTarget Sector Development: InvestmentProjects on country-specific funds are in discussion with a number of national stakeholders from both theprivate and the public sector. These funds act as incubator for the development of country-basedventures that channel funds from the international market to entrepreneurial ventures in the countries inquestion, and that increase the franchising of international businesses in the target counties.Status: In discussion for Haiti, Philippines. ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  9. 9. 5.3.3 Diaspora Bond DevelopmentTarget Development Sector: Diaspora FinancingDiaspora bond projects are country specific. Financing tourism development is the immediate area ofinterest -- particularly the development of destinations tailored for the home-bound visitor from thediaspora. Several vehicles are being explored to streamline the fundraising process within the diasporacommunity as a whole.Status: In discussion5.3.4 A Telecom AllianceTarget Development Sector: TelecomThe project to develop the telecom sector involves the negotiation of a strategic alliance of telecomoperations and investors in the view to deliver technology, products and services to fill a communicationgap between customers in diaspora markets and their phoneless relatives in the country of origin.Operators in 16 countries are targeted to be part of the alliance.Status: In development5.3.5 A Creative Industry AllianceTarget Development Sector: Media and EntertainmentThe project to develop the media and entertainment sector is a strategic creative industry allianceinvolving EDM entertainment and social networking hubs. The primary objective of the proposednetwork is music—promoting its crossover into mainstream markets.Status: In development5.3.6 A Banking-Community PartnershipTarget Development Sector: Financial Services & BankingThe project to develop the financial services & banking sector involves bridging the communication gapand creating business opportunities for small and medium enterprises within the EDM community to actas a bridge for banking the unbanked. Among the possible results of this project are microlending hubsthat could deliver microlending services along with the telecom services described in 5.3.4 above.Status: In Development ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES
  10. 10. 5.4 CampaignThe strategy to promote an on-going EDM campaign has already produced two important exploratorygathering involving governments, the private sector and academia. As we move forward, EDMdevelopment will aim to involve a steadily increasing number of stakeholders from the above listedsectors as well as from NGOs and trade and business associations.The initiative will also enter into cooperative agreements with intergovernmental bodies such as theUnited Nations, the G-8, the OECD, Development Agencies, international financial institutions,state-owned enterprises, and academic institutions.5.5 Research & Policy DevelopmentThe strategy to encourage EDM Research and Policy Development is the preserve of academicinstitutions such as schools of international affairs, business, communications engineering, politicalscience, sociology and economics. EDM Research will further the in-depth understanding of the EDMsand of the policy environments, trade arrangements and technologies that will allow them to thrive.Considering that most policy attention to date on the interaction of diaspora and financial marketdevelopment are focused on migrants and remittance, more has to be done to understand the investmentpotential of the diaspora as a consumer market, and as a spur to the development or application of EDM-enhancing technologies, bonds, and policies.Main Contact for the Initiative:Harvey DupitonLead DeveloperPresident of Xen Pi Co & AssociatesNew York, NYTel: 347 453-6079Email: Harvey@xenpi.com, hdupiton@aim.comHarvey Dupiton is founder and president of Xen Pi Co. & Associates. During his eighteen-yeartenure at the helm of Xen Pi, he has done extensive works in international affairs and latelysocial finance with a focus on ethnic-diaspora markets. He also serves as Secretary General ofUnited Nations Association Haiti, an organization with close ties to the UN-NGO community.He is former Chair of the NGO Committee on Southern Africa, a committee of the Conferenceof Non-governmental Organizations and was, for a period, a press correspondent at the UnitedNations. Mr. Dupiton earned a bachelor degree in electrical engineering in 1989 from PrattInstitute of Technology in New York. He has been recognized as a business champion of theUnited Nations Global Alliance on ICT for Development (UN-GAID) for his tireless work onpromoting ICT and his dedication to lure investments in that sector in countries with low telecomand internet density. ALL RIGHTS RESERVED • XEN PI CO. & ASSOCIATES

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