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Diaspora Economic Remittances on Home Countries – Part II

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The Impact of Money from Diaspora on Home Countries

Remittances to Somaliland in 1998 prop up the country’s market especially when Saudi Arabia placed a 14-month ban on the country’s livestock. In the urban centers where remittances are concentrated, majority of household relied on the remittances for livelihood, less than 5 percent of rural households receive money from abroad. Also because of the change in the demographic structure of migrants, an increasing proportion of those receiving remittance are women, (Ismail I Ahmed, 2000).

Unlike other countries where government and or diasporic group engage in economic and developmental activities, with the 14 years war and crises in Liberia war have gravely affected the economy of that country and from available evidences, the economy benefits those who controlled it – close associates of the ex-President Charles Taylor. For example, Taylor and his close associates have monopoly over rice and car imports, cocoa and coffee, fuel, cement, beer and printing presses, timber and maritime registry. The Chair of the ruling National Patriotic Party, Cyril Allen owns a plastics company and the Atlantic Wireless Company, which handles long distance communications, while Taylor himself had a share in Lone star Communications, the country’s cell phone firm.

One of the lucrative sectors of the Liberian economy is logging, which accrued $46.2 million between January and June 2001. This sector is so vital to the Government that in January 2000, a new ‘National Forestry Law’ was passed making all forest state property except for communal and privately owned forest resources that have been developed through artificial regeneration, (Arabic News.Com)

Since the end of the first war in Liberia, the security sector has not been reformed and it is highly dominated by former fighters of the NPFL and non-Liberians, mainly Burkinabes, Gambians and fighters of the notorious Revolutionary United Front (RUF).

The social conditions in Liberia are also appalling and they do serve as a major source of armed violence including forcing young people to fight war as a source of income. Unemployment is rife in the country and stands at 85% and the fiscal budget of $70 million (from July 2002 to June 2003) is too small to cater for the post-war needs of the country and its people. With salaries for civil servants in nine months arrears, no clean pipe born water in the urban areas and appalling health conditions, it is evident that the vast majority of the people are living in conditions of poverty. In fact, expenditure other than on the war has declined sharply by 60% by March 2002 and spending on social and community services were halved over the same period, (Constitutive Act of the African Union, 2000)

The 14 years crises affected the economy. The only strongest sector of the economy for the public is remittances from migrants in the Diaspora. Without such remittances to friends, relatives and families, Charles Taylor could have possibly been forced out of office long before August 2003 when he finally went into exile. The remittances through Money Gram and Western Union continue to serve as social security for a lot of people and a safety valve for political stability.

Of the 15% employment in Liberia, government employees hardly receive monthly salary. At one period, government employees were not paid for almost two years, (Tiawan Gongloe Johnson, 2003).

With the stringent economic condition in that country, monthly salary of most government and non-government employees aside, United Nations staff fall within are the same range employees within the private sector do receive their salaries regularly. The monthly salary for most government employees and local organizations fall between $10 to $ 20 dollars which makes remittances from Liberia Diaspora fundamental to the survival of citizenry of that country.

Unlike Dominica Republic where jobs are available, in the past, the bulk of the workforce in Liberia, about 75% worked in the agricultural sector; 10% in the mining and manufacturing sector and 15% in the service sector. However, with the high insecurity, agriculture and mining except for government officials are non functional.  The Government employs less than 5%. It is vital to stress that the war has boosted unemployment, which stands at 85%. Worse still, the sources of revenue have declined as the economy contracts with indirect taxes, which provide roughly 30% of revenue, and import duties, which provide about 10% of revenue, being negatively affected, (Catholic Justice and Peace Commission, 2003). These situations make remittances from Liberians in the Diaspora the only source of livelihood for over majority of those in that country.

Like the Dominican Diaspora group based in Boston, some Liberian leave their children or parents behind in the care of other family members and remit money frequently in an effort to maintain their parental role from a distance. Unlike migrants from Dominica, who see themselves as temporal migrants who will eventually return to the Dominican Republic, the recurrent crises and atrocities have drained most Liberians of the hope of returning home.

While the consequences may not be comparable because of the differences of situations between Liberia and Dominican Republic, migration have been completely positive in Miraflores and Liberia. In Miraflores, because a large proportion of the households have a family member living in Boston who sends money regularly, and because these remittances are commonly greater than any earnings in Miraflores, many men have stopped working altogether. Similarly, many youngsters have lost interest in education with the excuse that they will eventually migrate and will not need what they learned in school. In Liberia, jobs are unavailable while source of self-employment is of high risk due to the rampant exhorting and looting by government security officers. For those who desired to engage in large businesses, they are confronted with the issue of monopoly and also exhortation.

Moving from individual to organizational transnationalism, the Dominician Diaspora in Boston, political groups, the Catholic church, and community development committees are all examples of organizations that have attempted to work simultaneously in the Dominican Republic and the United States for a common end. With the exception of the Catholic church, the transnational activities of these institutions aim at the Dominican Republic and have not openly attempted to impact the incorporation of the Miraflores in Boston. However, they represent noble forms of incorporation to the host society where immigrants are directly committed to the economic and political futures of their places of origin, (Peggy Levitt, 2001).

The consequences of this involvement for the development of the sending communities are many, as the case of community committees shows. Miraflores living in Boston created the Miraflores Development Committee (MDC) as a mechanism to gather funds and organize the construction of several projects in Miraflores, such as a church and a baseball stadium. These committees have brought to Miraflores improvements that would otherwise have taken a long time to achieve, and they have generated new sources of employment, both for construction and administrative workers. Nevertheless, they have also freed the state from some of its former responsibilities.

In a country with high level of poverty and social exclusion, the administration of Charles Taylor was tight fist and daring on providing the environment for developmental initiatives in Liberia. Not only was the environment unfriendly but also the government saw particularly transnational developments as inimical to image and administration. Several attempts by local and Diaspora groups to initiate self -help projects to improve their living conditions were either destroyed or halted. In some cases, the materials were confiscated claiming insecurity and accusing the organizers of those projects of either undermining his administration or the security of the state.

An example of such local initiative was when the rural women with support from other women out of the country decided to engage in building of wells communal farming and building of wells but, they were seen as been engaged in activities to undermining the government, (Medina Wesseh, 2003).

Despite the high poverty level and increase in social problems, the Taylor regime seems very obsessed with regime security than human security while basic social services remain non-functional and unattended. The government proposed to spend 50% of its fiscal budget for July 2002 to June 2003 on military expenditure; an action that was condemned by Un Secretary, Kofi Annan and others, (UN Panel of Experts Security Council Resolution 1343, 2002). During the previous year, defence spending took away 27.6% of the fiscal budget and 0.5% of the GDP. Unlike Dominican Republic where though slow, government was still responsive to the needs of the people, throughout Taylor’s seven years rule as president of Liberia, electricity and pipe borne water were not restored not even in the capital, Monrovia. Hospitals and health cares services continued to closed due to lack of government’s support. In spite the people’s needs for these services, the government of Liberia was adamant to allow diasporic groups assist in the rehabilitation and rebuilding of some of these basic social services.

Unlike Dominican Republic where the political, security and socio-culture environment allowed for Diaspora and nonmigrants to participate and initiate in developmental activities, Liberian Diaspora groups were rather marginalized and their remittances were directed only to family households.

Conclusion

Remittances are one of the most visible and beneficial aspects of how international migration is reshaping the countries of origin. In different settings, they are quietly transforming societies and regions and are the most obvious examples of self-help undertaken by poor households. Their role can be particularly important in boosting private consumption and alleviating poverty in receiving countries where the political and security environment permits.

Remittances to Liberia increased for the past 14 years but statistics are lacking.  In countries like Liberia, given their importance, it is unfortunate that data and research on the effects of remittance is not much. In general,  statistics of the impact of remittance on poverty and long-term economic development are not clearly outlined.

Although foreign aid and remittances are intended to help poor countries, the critical difference between foreign aid and remittances is that the foreign aid  consists of transfers from public entities in the donor country to public agencies in receiving countries and even when it is directed to civil society actors such as NGOs, it goes to organized entities. Remittances of course, simply go directly to households and in that sense their immediate poverty alleviation impact through increased consumption  can be greater than traditional foreign aid, depending on the income characteristics of the receiving household. The transaction costs are lower and there is less leakage to rent seeking bureaucracies and consultants.

However, its long-term impact may be more questionable, especially if few productive assets are being created. Thus, it would appear that remittances are a better instrument to address poverty, which arises due to shocks whether at households or national level.

To alleviate poverty, large economic transformation may still require external financial resources in the form of budgetary support to governments in many poor countries. If remittances were to become the principal mechanism to transfer resources to poor countries, it would require more open  immigration policies in industrialized countries.

However, remittances can create dependency of migrants’ households as well as of the economy as a whole, especially if they form a main source of foreign currency in the country of origin.

Finally it is worth thinking whether it is the less visible remittances namely social remittances or the flow of ideas have a more critical impact than their financial aspect (Peggy Levitt, 2001)? The overseas experience has undoubtedly some effects on migrants. At the same time, the communications revolution has led to an wide growth of transnational phone calls and emails and a sharp increase in international travel. As a result not just elites but social groups at the lower end of the social spectrum are exposed to the flow of new ideas.

About the author: Musue N. Haddad is a Liberian Journalist/Photo-Journalist. She holds a graduate degree from George Washington University, and has worked both at home and outside of Liberia. She received several national and international awards for her journalistic practices and human rights work, including the Nelson Mandela Award for “Best Student in Photo-Journalism,” Human Rights Award from the United Nations Association of the National Capital Area (UNA-NCA), for “outstanding dedication and service towards the recognition, promotion and protection of the inherent dignity and equal and inalienable rights of all members of the human family.” and Human Rights Watch Hellmann-Hammett Award, granted to writers around the world who have been the targets of political persecution. In 1998/1999, she received the Press Union of Liberia “Journalist of the Year” and ‘”Photo-Journalist of the Year” awards.

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