A growing body of evidence suggests that diasporas play a critical role in supporting sustainable development by transferring resources, knowledge, and ideas back to their home countries, and in integrating their countries of origin into the global economy.
Financial flows from migrants and their descendants are at the heart of the relationship between migration and development. While remittances have important effects on financial development, diasporas also hold substantial financial assets beyond their current income—for instance, in savings and retirement accounts, in property, debt, and equity. While remittances tap the incomes of migrants, this report argues that the greater challenge is to mobilize the wealth of the diaspora.
Capital markets perform precisely this function, mobilizing savings and channeling them to productive investment. Tanzania Government have the potential to support diaspora investment in their countries of origin through risk reduction: Tanzania Diaspora by focusing on lenders in the country of origin, and by focusing on diaspora investors who are foreign citizens.