By Golden Sibanda - The herald
ZIMBABWE should exploit remittances of its people living and working outside the country to enhance their contribution to the economic recovery, renowned labour economist Dr Godfrey Kanyenze has said.
Dr Kanyenze made the remark in his presentation at the Just Business conference last week organised by the US Embassy and the American Business Association of Zimbabwe to promote trade between the US and Zimbabwe.
This economy is now on course to recovery, but faces the biggest constraint in the form of lack of funding to finance recapitalisation of the manufacturing industry, agriculture and mining and infrastructure development. The economy requires an estimated US$8 billion to recover.
Dr Kanyenze said the country could turn the "brain drain" that occurred over the last decade of economic instability into a "brain gain" since between 3 million and 4 million Zimbabweans are living and working outside the country.
This comes amid strong signs that the country could benefit immensely from remittances by its people working in foreign countries considering that sub-Saharan Africa received a total of US$20 billion with half that going to Nigeria.
Global remittance flows have increased from US$101,6 billion in 1995 to US$328 billion by 2008 after a 15 percent increase between 2007 and 2008.
Potential for Zimbabwe, said Dr Kanyenze, to tape into diaspora remittances for economic development was huge as the United Nations Development Programme estimates show the country received US$1,4 billion last year.
Over the years experts have given varying figures of potential remittances from the diaspora. The Reserve Bank of Zimbabwe estimated remittances through formal channels at US$47 million in 2007.
Dr Kanyenze said to effectively tape into the potential remittances there was need to ensure confidence and trust among people working abroad, ensure democratic reforms, economic recovery, give voting rights to the diaspora to foster attachment to home country and allow dual citizenship.
He said apart from a migration and development policy framework the country should adopt a legal and institutional framework to co-ordinate migration and issues related to people living and working outside Zimbabwe.
"The migration and development unit in the Ministry of Economic Planning and Investment Promotion should be appropriately capacitated and located in such a manner that it can effectively coordinate the activities of other government ministries and departments with a stake in migration and Diaspora issue," said Dr Kanyenze.
He said there was need to leverage remittance flows for development by addressing data issues such as recording systems, ensuring remittance through formal channels, creating diaspora bonds at attractive rates and promoting home town associations to facilitate investment flows.
This could be achieved through measures to attract back skills by offering duty free customs privileges on entry, assisting with costs of repatriation and reintegration, offering incentives such as remittance allowances.
In addition, Government could reach out to people living and working outside through development oriented organisations such as the Zimbabwe Diaspora Development Chamber of South Africa, the Zimbabwe Diaspora Development Interface and the Global Zimbabwe Forum.
Zimbabwe could execute its strategy by targeting countries with a high concentration of Zimbabweans and also pursue bilateral and multilateral initiative to protect the rights of Zimbabweans living and working abroad.
Potential for remittances is high since an estimated 2,1 million Zimbabweans live and work in South Africa, 500 000 in the United Kingdom, 300 000 in Botswana, 50 000 in the US and Canada while and 20 000 are believed to be earning a living working in Australia and New Zealand.
Countries such as Brazil, Egypt, El Salvador, Guatemala, Kazakhstan, Mexico and Turkey have used remittances to securitise cheaper long-term finance.
The World Bank estimates the Philippines was last year able to achieve a stable current account surplus despite a decline in exports when the country raised an estimated US$750 million despite the global financial crisis.