Andrei Darie - Remittances and diaspora investments
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Andrei Darie - Remittances and diaspora investments
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Andrei Darie - Remittances and diaspora investments
- 1. Remittances for development of rural communities of Moldova
- 2. Challenge: • High outward migration from predominantly rural areas, remittances channeled for consumption, loss of human capital • Limited engagement of migrants in local development, limited cooperation with LPAs Priority: • Capitalizing on the benefits of migration for the development of the country • Engaging migrants and diaspora and channeling remittances toward local development (local public service and infrastructure development) and local economic development Migration for sustainable local development
- 3. • 38 localities from Moldova successfully piloted the model of engaging Diaspora in local development • Over 10,000 migrants involved • 55 joint community projects (local services and economic development) in their native communities, for over 300 thou beneficiaries • The total projects value USD 2,53 mln • Diaspora remittances share 10% of total project budget, or 19.3% of local contribution First results: leveraging local investments through trust building
- 4. Model of engaging migrants in local development continues to expand to new communities in Moldova • 138 small and medium projects implemented by cca 150 HTAs • Budget (USD) 3.5 mln, including 1.5- SDC/UNDP, 161k - Gov, 1.8 – local contribution (incl. 33% from diaspora) • 2021 - model expanding to additional 27 ongoing similar initiatives • DAR 1+3 (2020-2021) – 63 projects supported, including 19 with the support of SDC/UNDP
- 5. Remittances for crisis response and building back resilient local economies •New methodology of involving migrants in local economic development •25 new local economic development initiatives to build back better economies • Budget: USD 4.8 mln, including USD 1,5 mln SDC/UNDP/MiDL grant, USD 3,3 mln local contribution (including circa USD 900k from diaspora/migrants)
- 6. Project distribution by sectors and geographic areas 12 projects Tourism and recreation Post harvesting and agricultural products processing infrastructure Business Support Centers/Incubators Circular economy Zootehnics (animal husbandry and diary production) Public infrastructre to support business development/extention Commercial infrastructure (agri-food markets) with regional and cross-boarder impact 4 projects 4 projects 2 projects 1 project 1 project 1 project
- 8. Andrei Darie Program Specialist Inclusive Growth Cluster UNDP Moldova andrei.darie@undp.org Thank you for your attention!
Editor's Notes
- Much has already been mentioned today about the impact of migration and remittances to the countries development. It is a known fact that the consequences of migration is mostly felt at local level – by the local communities, migrants and their families, as well as local governments who are on front the line when it comes to dealing with the negative effects, but also leveraging the positive ones for the overall development of their communities. Many of the challenges have been mentioned today – like loss of human capital, particularly from rural areas, remittances predominantly used for private consumption, coupled with the limited engagement of diaspora and migrants in the development of their communities of origin and lack of awareness of LPAs of the latter’s potential. Following, allow me to talk about UNDP’s experience, with the support of the Swiss Government, of re-shifting remittances toward local development, piloting two integrated approaches of leveraging diaspora’s contribution on the one hand - to local public service development, and on the other hand - on local economic development.
- Since 2015, UNDP with the support of Swiss Government, designed and successfully piloted in 38 localities from Moldova. The approach was based on five pillars focused on strengthening the institutional framework, using evidence and mainstreaming migration in local socio-economic development strategies, building strong partnerships between LPAs and diaspora organized in HTAs, and using innovative instruments (e.g. crowdfunding) As a result, HTAs succeeded to implement 55 joint local services projects – co-designed, co-funded and co-implemented by and with migrants and local authorities. Over 300,000 people at local level now benefit of better services in their village and city (road infrastructure, street lightening, waste management, sport and recreation facilities for youth, elderly and mothers with children, etc… The provided seed funding by the development partners (in the amount of $1,19 mln) co-generated local investments in the amount of $1,33 mln (local contribution and diaspora share), whereby achieving a 211% financial multiplication effect and reaching over $2,52 mln of total investments. The local investments/contribution included 19,3% funds collected from migrants’ community.
- The good practice of engaging migrants in local development continued to gain ground and expand to new communities. In 2019-2020, 138 small and medium projects were implemented by cca 150 HTAs, due to several support programs offered by the Swiss Government/UNDP/MiDL (HTA Accelerator and HTA Incubator, contribution to DAR). In that period of time, HTA secured 52% local contribution (in the amount of USD1,828,668) from funds remitted by the diaspora and local contribution for implementing 138 service development projects, including 454K from the diaspora (or 33% of local contribution). In line with those mentioned by the colleagues from National Bank of Moldova, against expectations during the complex circumstances generated by the pandemic, local communities long with the diaspora and migrants were able to collect and surpass their initial crowdfunding targets by circa 30%. Recently, 27 new similar initiatives were initiated and shall continue throughout 2021. As mentioned the BRD representatives in the first panel, a new national program DAR 1+3, mirroring the model of migrants’ engagement in local development was instituted offering sustainable instruments for local governments and diaspora to join efforts in advancing the development agenda at local level. Effective since 2020, the program has succeeded to successfully support 63 projects of LPAs and diaspora, including 19 with the support and co-financing offered by Swiss Government/UNDP.
- Remittances can become an important instrument in addressing the current challenges, paving the way for a faster economic recovery and sustainable economic growth of rural communities of Moldova. As such, in the last two years, with the support of SDC, UNDP has been piloting a new approach of engaging local stakeholders – public and private sector, along with the diaspora and migrants into joint actions to promote the economic agenda of the localities. Currently, 25 local economic development initiatives in 25 localities across the country support the recovery efforts and building back better economies. The USD 1.5 mln offered by development partners (SDC-UNDP) generated additional USD 3.3 mln investment from local stakeholders (HTA, local private sector, LPAs, diaspora). It is important to mention that the share of diaspora and migrants’ in the local contribution is circa 27%, or USD 0.9 mln.
- By the end of 2022, 12 tourist routes and recreational spaces, 4 post-harvest infrastructure units, four business support facilities, two centers for recycling and economic use of waste, a regional and cross-boarder agri-food market, livestock businesses and relevant public utilities are currently being developed in the 25 communities across various regions of the country, as a result of the 25 local development initiatives. In total, 48 existing businesses are assisted to modernize and extend their activities, and over 50 start-ups, resulting in over 1,000 jobs created. Among these, 36 businesses are created by returned migrants and their relatives.
- Private sector - examples Channeling remittances into local economic development