Case Study : Assessing the impact of diaspora investments in Tunisia

Sep 13, 2016

Governments, international organizations and researchers increasingly highlight foreign direct investment (FDI) by migrants and diaspora actors as a critical element of the migration and development nexus. Diaspora investments are seen as a vital source of capital, of which positive development effects are expected. As little is known about their actual effects, UNDP, in collaboration with IOM and the Government of Tunisia, conducted a representative survey that assesses the impacts of investments by diaspora actors on key economic indicators in Tunisia.

Based on a descriptive and comparative analysis of administrative data on diaspora investments in the industrial, service and agriculture sectors, as well as a survey of 400 diaspora-owned and other foreign owned companies, the study provides valuable insights into the nature and impacts of diaspora investments. Surveying diaspora as well as other foreign investors as a comparison group, it advances our understanding of how diaspora investments differ from other foreign direct investments.

The findings show that while diaspora investments in Tunisia flow into less-developed and rural regions that see very little non-diaspora investments, the overall impact on employment and wages is less than for non-diaspora FDI. The study also reveals that diaspora investors are often not aware of investment incentives. Furthermore, they are faced with the same or more challenges as other foreign investors. This has important implications for outreach efforts by government investment promotion agencies and follow-up activities.

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