INDIA TALKIES

Diaspora Dividends

Sarika Malhotra
Posted: Sunday, Jan 04, 2009 at 2335 hrs IST
Updated: Sunday, Jan 04, 2009 at 2335 hrs IST

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: A ritual. That’s arguably the most common perception for the much vaunted Pravasi Bharatiya Divas (PBD), now in its seventh edition.

While many believe that the MEA (Ministry of External Affairs) jamboree remains nothing more than a networking exercise, its importance in providing a platform for this successful group that is emotionally tied to India, is undeniable. As Professor Gautam Ahuja, Ross School of Business, University of Michigan, reasons, “Even if the PBD were to be only a networking forum, it would still be valuable in help improve the exchange of skills, connections and eventually capital.”

A sentiment echoed by Professor Brij V Lal, expert on Asian diaspora, Australian National University, for whom the PBD remains a symbolic event and benefitting largely those who have direct investment interest in India, especially the NRI’s. But for Person of Indian Origin (PIOs), from the old Indian indentured diaspora, the event is perceived differently. As Lal explains, “They have little to invest in India, because they can’t afford to. Their interest is principally cultural. What does India do for them? They are opening a couple of universities in India for Non Resident Indians, but they ask for full fees or even more. India will gain if it takes a broader, more holistic view of its relationship with its diaspora, and not a narrowly utilitarian one.” Nevertheless wooing the diaspora is a growing trend around the world and India desires to tap the potential of its diaspora like never before and the PBD stems as a stepping stone in the direction.

The big question

There are more than 2,00,000 millionaires of Indian origin in the US and Indian community is the highest average family income group, ahead of the Jews and the Chinese. This potential is huge enough to tap it as a source of investment. Also remittances from migrant workers are fast outpacing official aid flows and even foreign direct investment (FDI) as a source of external finance. Remittances to India have risen dramatically over the past decade — from an estimated $12.3 billion in 1996-97 to about $27 billion in 2007. North America accounts for over 40% of remittance flows, followed by the Gulf countries and Europe. But we might witness a turnaround in this trend in the backdrop of the global economic meltdown, as Manoj Vohra, India Director, Research, Economist Intelligence Unit confirms, “While the developed world is certain to go into recession,...

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