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Four Ways That Diaspora Businesses Are Advancing Locally-Led Development

Localization & Inclusive Development
Two women and one man dressed in suits standing near a table and looking at printed materials
Photo credit: USAID/Kosovo
Jul 25, 2022

This article was shared by USAID's Private Sector Engagement Hub as part of our Localization & Inclusive Development blog series.

The United States is home to more global diaspora members than any other country in the world. A diaspora is a community of people who live outside a shared country of origin, ancestry, or affinity, and maintain active connections with it. In fact, more than 62 million Americans, or one-fifth of U.S. residents, are first- or second-generation diaspora members. With roots around the world, these communities are key players in driving sustainable development progress. 

The community ties that diasporas retain to their countries of origin can play an influential role in strengthening local-global connections while also building resilient and prosperous societies. Whether growing businesses in India or responding to a disaster in Haiti, diasporas are uniquely positioned to address development challenges in countries where USAID works.

USAID proactively seeks to work with a range of local private sector partners to find innovative solutions to accelerate growth and prosperity worldwide. Diaspora members are key stakeholders in many local businesses with their contributions ranging from remittances—funds sent back home by people living abroad—to transferring resources and entrepreneurship ideas back to their home countries. There is strong alignment between business interests and development goals in sectors such as economic growth, health, education, science and technology, as well as disaster and crisis response. 

By engaging diaspora-led businesses through both financial and nonfinancial means, USAID is expanding its reach and impact. There are a number of ways that USAID collaborates with diaspora-led businesses or diaspora leaders exploring investment in our partner countries. Here are four examples of how diaspora-led businesses and communities can partner with USAID:

1. Promoting Entrepreneurship and Investment

Diaspora members frequently invest in their country of origin or ancestry through remittances that help to uplift a family’s household and community. In 2022 alone, the World Bank estimates that officially recorded remittance flows to low- and middle-income countries will reach $630 billion. 

In addition, diaspora members have long been among the most influential business leaders and innovators worldwide. In fact, more than 40 percent of Fortune 500 companies were founded by immigrants or children of immigrants. 

For example, Hamdi Ulukaya, Chief Executive Officer (CEO) of the values-driven yogurt company Chobani and prominent member of the Kurdish diaspora, is a powerful advocate for the rights of immigrants and refugees. Ulukaya founded the Tent Partnership for Refugees, where Chobani, UPS, and over 60 other companies collaborated to create jobs for nearly 40,000 Afghan refugees who arrived in the United States in 2021.

In another example, USAID sponsored a series of investor delegations with African diaspora groups to channel investment into African infrastructure projects to uncover investment opportunities across the continent. 

By educating U.S. investors about African markets and investment, USAID leveraged just $2 million in grant funding to mobilize over $1 billion in two-way investment commitments into African infrastructure projects in over three years. Prosper Africa, a U.S. government initiative to increase two-way trade and investment between the United States and Africa, is building on and continuing this work.

2. Supporting Volunteerism and Post-Disaster Response 

When disasters strike, diaspora communities are often among the first to volunteer to help their countries of origin. USAID supports the unique role of these communities—not only in responding when disasters hit their countries of origin but also in building resilience before and after disasters hit. In fact, USAID allocated nearly $2.9 million in FY 2021 funding to support diaspora-led innovations to improve the lives of the world’s most vulnerable people.

In the wake of Haiti’s earthquake in 2021, USAID/Haiti issued a special call to mobilize diaspora resources and expertise to help support Haiti’s post-earthquake reconstruction and recovery efforts. At the same time, USAID hosted events with the Haitian-American community in New York City, organized by Haiti INVEST, to explore opportunities for partnership and to attract private sector partners for short- and long-term development in the island nation. The USAID-supported Diaspora Partnership Accelerator in Haiti also coordinated Haitian diaspora humanitarian assistance and development.

3. Facilitating Business Networks and Market Linkages 

When diaspora members send money to friends and family in their countries of origin, these individuals can also have a catalytic impact on key industries and economic opportunities. The combination of insights about their ancestral home and international business connections can result in new opportunities for trade and market expansion.

In Kosovo, for example, USAID helped make connections that enabled Yll Blakaj, a Kosovo native living in Austria, to expand his business serving the diaspora. His online marketplace Ekena.at found a market among Kosovo diaspora living in Europe. 

As Kosovo’s first online supermarket platform, Ekena offers food, drink, and hygiene products from 100 Kosovo-based brands to consumers in Austria—many of whom are members of the diaspora. The platform fuels indirect economic opportunities by generating demand for domestic food production and manufacturing.

4. Fostering Mentorship and Skills Transfer 

Diaspora networks are reversing what is sometimes referred to as immigration “brain drain” into a “brain gain” by transferring skills and knowledge between countries. This engagement can occur through knowledge sharing and market intelligence, partnerships and parallel programming, and financing and guarantees in sectors that align with USAID’s development objectives.

Through a co-creation process, USAID and diaspora-led businesses can jointly identify and solve key business and development challenges to achieve their respective goals and objectives. The Agency and diaspora businesses agree to take on shared risks and responsibilities, and then to jointly mobilize resources and apply their respective assets and expertise for greater development impact.

Working with diaspora groups, USAID is tapping into their deep connections with their home country, resources, and expertise to maximize impact and deliver results that are sustainable over the long term. 

Interested in Working with USAID? If you are a company or investor interested in exploring opportunities with USAID, please visit USAID’s Partner with Us page. Please contact the Private Sector Engagement Points of Contact in the country where you would like to work. For specific solicitations across the Agency, email globalpartnerships@usaid.gov.