Diaspora as Engine of Growth

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Diaspora as Engine of New Growthwould be an explicit initiative taken bythe State that aims at developing themissing link between Pakistani expatsand the New Growth Strategys initiativeof reframing Pakistans economy on to

the Innovative and Entrepreneur ia lcourse. It proposes an underlyingstructure that engages Diaspora intoinstitutional reforms, to invest, formsynergies and alliances, and performknowledge dissemination and advisoryfunctions. The strategy would thus buildan overarching framework for forginglevel of coherence to Governmentsother Diaspora policies, so that

cohesiveness in objectives and themeans to attain them could beachieved.Pakistan has 4.6 Million strong Diasporacommunity (Figure 1) mostly residing inEU (UK, Greece, Italy, France, Germany,

Norway), US, Canada and Middle East(KSA, UAE, Kuwait, Oman, Qatar) withyearly contributions topping $9.4 billion1(almost all of it through remittances)Though such a flow has proved crucialin cushioning the countrys exchangerate and alleviating poverty at individualfamily level but the country is far fromharnessing true potential of this groupon the lines of neighboring India, China,or even Vietnam. Thus a well craftedand discrete initiative directed atsuccessful Pakistanis abroad to abreastthem of opportunities in the 6th mostpopulous country, its unsaturatedmarket, cheap labor, growing middleclass, expanding urbanization andheightening consumerism, should bethe new focus of any Diaspora strategyespecially in circumstances whentraditional sources of FDI are drying.

Ours Remittance driven modelThe dimension of Pakistani Diasporasrelationship back to their home is basedon strong person-to-person ties, whichis evident from the size of its remittances(Pakistan ranks among the 10 largest

emigrant-remittance attracting nations inworld)2.

Taiwan has pursued a Brain Trustmodel, focused on attracting human

capital from the Diaspora. China hashad perhaps the longest-term strategyfor attracting direct investment andopening trade opportunities throughoverseas Chinese communities. Indiasrecently launched Diaspora policy ismu l t i -p ronged , pu rsu ing d i r ec tinvestment, port fo l io investment,technology transfer, market opening andout-sourcing opportunities.

Newland K.(2004)

Such flow of money into the hands ofnear family members has madesignificant impact in elevating their livingstandards but the effect of this strategyis short-term and too confined. Asnoted by Qaiyum and Savage (2006)nearly 75% of Pakistani household useremittances for day to day expendituresand for other short term purposes whileonly 25% channels it into housingconstruction (7%) and investment in realestate (18%). Thus roughly $8.8 billioneach year is spent on things having nolong-term tangible economic benefit

Strategy Paper supporting the Framework for Economic Growth Pakistan 2011

1 The Migration and Remittances Fact book 2011, World Bank

2 Ibid

DIASPORAas Engine of growth

The role of Diaspora has taken strategic focus in influencing, transforming and building their home countrys resource base

and institutional framework. They have lately served as funnel in transferring capital, knowledge and technology from West to

their native soil. Dynamics in the post-2000 world have altered the once one-sided Brian Drain into a swapped Brain

Circulation from West to East. Governments across the world have actively taken steps to capitalize the prevalent reverseosmosis by replicating others proven models and coming up with their own to exploit the wealth, talent and desire of the

straddled and returning expatriate to home countries. The New Growth Strategy has also taken stock of this superb resource

that like the rest of Pakistans strengths has been blatantly ignored. The strategy in its attempt to form innovative economy

tends to bring in Diaspora-Initiative that engages expats into institutional reforms, investments, synergy formations and

knowledge dissemination, in order to give them the ownership, stake and pride in their motherland.

UK23%

KSA21%

UAE23%

USA13%

Canada6%

Kuwait2%

Italy2%

Oman2%

Greece2%

France1%

ermany1%

Qatar1%

Spain1%

Bahrain1%

therlands1%

Germany1%

Norway1%

Figure 1: Distribution of Pakistani Diaspora in differentcountries

Muhammad Shafqat

Planning Commission of Pakistan

The Author is Policy Consultant at the Planning Commission of Pakistan and has worked on the Productivity and Innovation of the Framework for Economic Growth Pakistan (10th five year Mid-Term Growth Plan). This strategy paper is part of the broader Innovation theme of the FEG


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either to the economy or society. Apartfrom that though in current financialcrisis worldwide flow of remittancesshowed resilience as compared toprivate capital flows such as FDI, privatedebt and por t fo l io equ i t y tha tencountered a drastic dip3 but in caseof Pakistan whose nearly half ofD iaspora res ides in GCC, anyeconomic or political instability in thatregion could serve a severe blow to itsviable supply of foreign exchange. Asthe case of market meltdown in Dubai

which dented its construction boom,forcing thousands of unskilled workersto flee the Emirate, 2010. Likewiserecent political and social turmoil inBahrain (home to 45,000 Pakistaniexpats) and Libya (30,000) is alreadytaking a tool by making return ing-expatriates to pack their jobs andsavings, and make their gateways.Such exits cuts the flow indefinitely fromth os e sour ces unt il fin di ng jo bselsewhere. Thus a sudden surge inremittance flows (occurring since 2008in Pakistan) needs a cautious scrutinyas it might be a boom preceding a bust

due to large exodus of once Diaspora.Apart from such detrimental effects acountry in order to sustain remittancegrowth rate needs a constant effort inthe deployment of its migrant workersabroad (Bangladeshs remittance growthleveled in 2008 due to similar factor)4which is gett ing harder as Guestcountries are getting restrictive andmore ski l l-demanding in al lowingforeigners. Another reason behindPakistans remittance spike is its drastic

dwindling of exchange rate. DevaluedRupee naturally makes it an attractivedestination due to more buying powerof any foreign currency and has gotnothing to do with more earnings orsudden compassionate feelings on partof expats! Conclusively, the remittance-only strategy that Pakistan follows is anintangible, short term and risky policythat needs an extensive overhauling andchange.

Innovative channels to Remit

However before any change shouldtake place, Pakistan also needs to findbetter and more productive ways ofchanneling remittances, the one thatcould utilize it in short bursts to generatevalue out of them. Here we can learnfrom Mexico (with the worlds thirdlargest remittance flows)5 who devisedan i nnova t i ve answer t h roughPadrinos. This program providesMexican Diaspora in the United Stateswith an option of channeling theirremittances through a development-ledconduit i.e a period of 3 to 6 month lagbefore it could be freed. There are

hundreds of public projects (schools,roads, hospitals, public transports ormore advanced funding programs likebusiness incubators, university grants,student scholarships, capacity buildingtrainings) categorized according to cost,location, duration, social and economicimpact. The whole variety of projects arepresented to expatriates to choose fromif they are willing to channel their moneythrough this medium and the peopleusually select those which are located

within or close to native-localities, thusdirectly contributing into the uplift of theircities of origin. Best part is not just thebroader selection-option or the wholeprogram flexibility, but expats ability toclosely look into the project functioning(by becoming an over-seer thus theaccountability insurer). Such a role notonly triggered interest in self-managingthose programs but it also allayed fearso f c o r r u p t i o n . S u c c e s s f u limplementation and satisfaction on partof such short-term remittance-investors

sparked off further re-investments inmore projects (in atleast one-thirdcases). Pakistan also needs to set suchsuccessful and transparent precedents,some milestones that could work asbenchmarks to entice its own expatcommunity. It could start from aselected few and impactful joint projectsbetween dynamic and forward-lookingstakeholders in home country, and withsome exceptional Diaspora individualsabroad. These groups should forge andexecute a joint plan against all domesticconstraints and if the project succeedsin face of all the pertinent institutional

dysfunctions the rest of Diaspora saptitude would have both the inspirationand context to follow the lead.

Investment driven modelIn contrast to the short-term remittancemodel China followed the long-termbusiness engagement approach whenit came to courting its Diaspora withinvestment being the principal driver ofgrowth. After the opening up of


3Source:World Development Indicators (September 2010), Global Economic Monitor

4Source:Bangladesh Bank and Bangladesh Bureau of Manpower, Employment and Training 2010


The indus Entrepreneurs TiE, considered to be the worlds largest professional and networking forum in the world having its roots in the

Greater Sub-Continent. It has 56 chapters in 13 countries with Islamabad, karachi and Lahore as important South Asian sessions hub. Here its

focus on youth entrepreneurship, entrepreneurial mentorship, idea sponsorships, TiE Institutes formal learning workshops, boot camps, all-

day seminars blends local entrepreneurial knowledge with the expertise and unlimited but highly competitive venture capital of the peers direct

from Silicon Valley. Nearly every VC fund in the valley is affiliated with TiE, thus where ever it goes, the forum provides local innovators with an

opportunity to prove their idea and earn instant financial, technical and logistical support.

MIT Enterprise Forum of Pakistan MITEFPwith Organization of Pakistani Entrepreneurs OPEN and the MIT Alumni of Pakistan together

works for the development of Entrepreneurial Ecosystem in Pakistan (EEP). This chapter thus ensures the availability of large pool ofentrepreneurs building mindsets through mentoring, idea competitions, interactions and investors angel and venture capital and linking them

in an enabling environment.

OPEN a non-profit organization formed by a talented group Pakistani entrepreneurs at MIT (1998) in collaboration with the MIT

Entrepreneurship Center is actively playing role in network buildup, mentoring Pakistan based entrepreneurs, conducting seminars and

workshops for capacity building, organizing Business Acceleration Plan competitions and collaborating in high-tech, energy and life sciences

ventures. OPEN has expanded reach by establishing chapters in Boston, New York, Washington D.C., Houston, Silicon Valley and Dubai

There are various inspirational role models serial Pakistani entrepreneursfrom the Silicon Valley who either have taken steps in re-locating

to Pakistan or have been aspiring to do so while assisting local entrepreneurs in start-ups and pilot innovation projects are Faraz Hoodbhoy

(PixSense), Umair Khan (Clickmaeks), Zia Chisti (Technicla Resource Group), Sana Khan (TrueMRI), Monis Rehman (Naseeb, e-Planet, DFJ

ventures), Asad (investor:Baidu):

The Author and Sabir, Aidrus, Bird (2010)


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economy the country provided its 35Mi l l i on D iaspora w i th a t t ract i veinvestment options especially to thoseresiding in Taiwan. Such packagesinculcated investment priorities inselected sectors which were deemedcrucial to economic development alongwith varied concessions in tax and setup fees, simplified processes and

regulatory requirements. But the mostdistinctive factor in the success of thisprogram was the role of local officials,wh o we re hi gh ly in st rumen ta l inemphasizing and forming linkages ofemigrant families to their ancestral cities.These of fic ia ls drafted their owndevelopment plans partnering withnative-expat thus making them ownth ose pr oj ec ts 6. Such sense ofengagement and ownership was pivotalin making Chinas Diaspora contributorto the tone of half of countrys aggregateFDI (2002)7. Preferential policies at thecentral Government level towards its

Diaspora drastically re-aligned theirfocus from just remittances (that alsohappens to be highest in region, $55billion in 2010e)8 to proper engagementin trade and business investments.Such a strategy does not have theconspicuous short term povertyreduction benefits but it has a longerterm, multiplier effect through continuedjob creation and the generation ofsubsequent economic activity.

Multi-Pronged ModelThe financ ia l inves tment mode l

(employed by India and Israel) on theother hand utilizes market basedinnovations (portfolio, direct investment,bonds, corporate shares) to raisedevelopment finance. Recent financialinnovations at stabilizing financial flows to

the developing countries has inventedyet another specialized instrument calledDiaspora bonds (issued by DCI9 andSBI10), commonly known as ResurgentInd ia Bonds11 , Ind ia Mi l lenniumDeposits12 that uses patriotism andmarket competitiveness as the maindrivers (These vehicles have relativelyhigher rate of returns, boasts flexible

swap window, variable maturity periodand wealth tax exemption). Suchinstruments provided India with much-needed cash to re-coup its lost growthin 1998-2000 (due to Internationalsanctions after the Nuclear tests).Another great initiative taken by theIndian Government during testing timeswas the fo rmat ion of InvestmentInformation Center (IIC) that streamlinedevery poss ib le bus iness set-upprocesses and relevant informationdissemination, through a single-window.

Our Strategy

We have already discussed how toactualize l itt le productivity out ofremittances, but more then that thewhole remittance debate is figment ofpast economies. Today we should stoptalking about how to generate new remitstreams as this whole paradigm isfraught with only-short term economicbenefits (investments made on individuallevel are too small to register an impacton the larger National developmenthorizon), apart from the precariousnessits blue collar origin suffers in testingtimes. The priority should be to re-alignour focus from Remittances to Directand Portfolio investments in order to keeleconomy on to i nnova t i on andentrepreneurial path and for thatpurpose the country needs to targethigh-skil led sect of its Diaspora.


6 Ostergaard-Nielson, op.cit., p.9.

7 Graeme Hugo, Migration and development: A perspective from Asia, No. 14, IOM Migration Research Series, Nov 2003


9 Development Corporation for Israel

10

State Bank of India

11 Somini Sengupta, India taps Its Diaspora, New York Times, 19 Aug 1998

12 Sudha Mahalingham, Counting on Bonds, Frontline, Vol. 15, No. 20, 9Oct 1998; Krishna Guha, India Expatriates bolster reserves: Resurgent bond issue raises $4.2 billion,Financial Times, 26 Aug 1998

When the Taiwanese government decided to promote venture capital (VC) industry in the beginning of the 80s, it had neither the capabilities,

nor a blueprint to do that. Many were opposed to the idea because the concept of venture capital was foreign to traditional Taiwanese

practice, in which family members closely controlled all of a business financial affairs. Entrenched interests in maintaining the status quo were

strong. Through a process of intense interactions with the Taiwanese Diaspora in Silicon Valley, new institut ions such as Seed Fund (with initia l

allocation of NT$800 million, later complemented by an additional 1.6 billion) provided matching capital contributions to private venture capital

(VC) funds. Two American-style venture funds: H&Q Asia Pacific and Walden International Investment Group were also created in the mid-80s.

They were managed by US-educated overseas Chinese who received invitations to relocate to Taiwan. Once the first venture funds proved

successful, domestic IT firms created their own VC funds. Once those started to pay-off, even the conservative family groups started to invest

in VC funds and IT businesses.

Kuznetsov Y. 2008 (World Bank Institute)

Asia45%

EU32%

North America22%

Others1%

Asia73%

EU17%

North America9% Others

1%

Figure 3A & B. Pakistan has three-fourth ofits its Diaspora stationed in Asia in which44% only resides in Middle East. This classof expat is mostly unskilled (laborers, drivers,office workers) and though they account for73% of the total Diaspora pie, yet generateonly 45% of total remittances. On the otherhand Pakistanis residing in EU (17%) areeducated now and belong to services classor operate their small businesses (remit32%). Whereas those in North America (9%)

are the most educated, highly professional,affluent and thus entrepreneurial (remit 22%).Unlike their Middle Eastern peers they keepmajority of their earnings with them, hencepossess the most investment potential

Figure 3A (Above): Distribution of PakistaniDiaspora in continentsFigure 3B (Below): Remittance generation fromeach continentSource: Migration Policy Institute Data Hub (2010)


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Unskilled workforce as in the MiddleEast is best for generating remittences,obliged due to family-residing factor.Whereas fore ign-set t led, h igh l yeducated and affluent Pakistanis are theone that in other countries cases hadbeen enticed to bring back their wealth(as investment), expertise (technologyand knowledge transfer) and foreignnetwork (l iaison and outsourcingwindow) back to their home. Suchs t r a d d l e d a n d r e t u r n - e x p a t ssubsequently become the engine ofgrowth as in India (IT boom capitalizing

on the wealth of home grown techspecial ists), China (manufacturingexpansion banking on indefinite supplyof cheap labor), Chile (productionhouses assembled on its untappednatural resources), Taiwan (hi-tech pivot,leveeing its high-end human resource),Israel (start-up cluster embanked on itsun ique venture-cu l tu re ) , Mex ico(manufacturing outsource destination,leveraging NAFTA).

Why expats over locals? The targetedfirst-generation Pakistani expats aremore likely to flourish as entrepreneursand change agents compared tosecond generation or total foreignersbecause these people other then stillholding allegiance and eccentricitytowards their home country also carry astrong social network back. Theypossess basic knowledge of theculture, environment and prevalentbusiness practices that when combinedwith advanced education, exposure tomodern managerial techniques andforeign entrepreneurial experience,makes up a compelling mix for settingup and carrying out new venture on

long hauls.

Secondly; as explained by Kuznetsov(2008) these overachiever expats aresimilar to venture capitalists as they tendto embark on new ventures in theirhome countries in spite of poorinvestment climate (Taiwan 1980s),inefficient government functionaries (India1990s), lack of institutional framework(Chile 2000) and security environment(Israel post-1995). Also, this class ofinvestors having first-mover advantage intheir home country due to lack ofenthusiasm on part of foreign investorstends to in it ia te pr oj ec ts ha vi ng

organizat ional and technologicalinnovations that in some instancestrigger institutional transformations (likeexpats recognized role as Archimedeanlever13 in ushering new institutions inTaiwan, Chile, Mexico and Romania).This sect of foreign-based locals couldbe t rusted in set t ing of f suchtransformations because the local elitesexpertise is thought to be more ofentrenched, and though the Diasporaremain somehow engaged in localcircumstances but their expertise incontrast never gets entrenched. Theyare accustomed to local circumstances,hold credibility and own trust of localactors, yet seldom become part of theestablished and vested interests. Its arare combination of credibility, motivationand expertise that provides a wake-upcall for change

National Investment Council (NIC)To channel this great resource we needa highly active commission that courtsnew investors, project potent ia lbusiness and investment options,disseminates all the relevant informationand assists in moving investors through

procedural steps.Though a prerogativeof Pakistans commercial counselors but

they having not been able to lurewealthy Pakistani businessmen intomaking any noticeable investments perse leads to the re-thinking of wholemechanism, into one that is efficient,effective and self-sustaining.NIC is such a proposed body in whichGovernment takes an assisting role only.It should rather be a private-led council(headed by affluent and influentialDiaspora Pakistanis themselves), havingan aim of casting the enterprise imageof the country broad. PakistansConsulates serve to communicate all

possible information and extendingassistance to these expat ambassadorswho would act as liaison, the frontagents in operating one-windowfacilitating channel, while having theauthority and means to elucidateGovernment policies, areas of businessrelevance and the incentives within.These privil eged volunteer Pakistaniintermediaries be given the status ofNational Investment Counselors havingspec ia l access, work ing f rom,coordinating with respective PakistaniConsulates and assisted by the relevantauthor i t ies (Ministry of OverseasPakistanis, Pakistan Business Council,Pakistan Chamber of Commerce andIndustries, Export Promotion Bureau,Sma l l and Med iu m En te rp r i seDevelopment Authority and the PlanningCommission of Pakistan). TheseCounselors should be brought togetheron regular basis to abreast them of thepolicies, their objectives, and to obtaintheir feedback, but more so for formingan integrated global network (in order tobuild and harness Pakistans marketstrength, human capital and resourceadvantage). They should also havelevers in assisting potential Pakistani andforeign investors within their community


13 Kuznetsov,Yevgeny Diaspora Networks and the International Migration of Skills. How Countries Can Draw on Their Talent Abroad World Bank, Washington, DC. 2006

The Investment Information Center (IIC); In India it a free single window and all necessary services to its Expats in setting up their investments,including explaining government policies and procedures, available incentives, necessary data for project selection and assists in obtaining governmentapproval. It also provides information services to all potential investors on the state of various industries. see http://www.iic.nic.on/iic1_a.htmPadrinos: Mexico, this program is geared towards Mexican-American businesspeople who are encouraged to invest in one or more of 1000 projectsidentified by the Presidential office in consultation with local communities. The investors are encouraged to become personally involved to ward offtransparency concerns. Alfredo Corchado and Ricardo Sandoval, Mexico aims for expatriates heartstrings and pursestrings, Dallas Morning New, 20March 2002Tres por Uno: Mexico, A state level program in which municipal, state and federal governments each match collective remittances from migrantassociations in the US dollar for dollar

Lebanese Business Network: Lebanon, is a non-profit business development vehicle with an online market place and business matching database. Itsgoal is to create links between Lebanese entrepreneurs and international businesses, by identifying business opportunities and potential areas ofpartnership. LBN, see linbusiness.com/LBN/LB_LearnMore.aspThe Silicon Valley Indian Professional Association (SIPA): US-India, Its mission is to provide a forum for individuals interested in meeting with visitingIndian businessmen and women and to facilitate information dissemination and networking within the professional community. Maggie Shiels, AisanExodus from Silicon Valley?BBC News.com, 17 April 2001The Armenia High Tech Council of America (ArmenTech): Armenia-US, has a highly interactive website that is aimed at boosting Armenias high techsector through increased exposure to international companies. It provides a networking center, e-learning, in-line trainings, virtual skills development.Silicon Armenia opens electronic highway between Armenias technology sector and the world, Amntech.orgGhana Expo: Ghana-UK, exhibition fairs in global commercial hubs, promoted as an opportunity for Africans in the Diaspora to connect with businesses,goods and services in AfricaHome Town Associations: Mexico, The nearly 400 Mexican Home Town Associations in the United States serve dual purpose of providing socialsupport to the migrants and economic support to their places of origin including charitable contributions, infrastructural improvements, funding for humandevelopment projects, and capital investment in income generating activities. Orozco M, 2001


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and networks to interact with therelevant authorities back in Pakistan forinitiating the project till its completionthrough a single, convenient andexpress channel. Likewise specialtown-hall meetings could be arrangedwith the participation of key Pakistanibusinessmen to regularly give holisticpicture of the state of various Pakistaniindustries along with an account oft hose p ress ing f o r i nves tmen t(independently verified business plans,market growth potential, rate of returnon potential investment and relevantstatistical reports should be distributedamong potential Diaspora investors).

Likewise local authorities and provincialgovernments in Pakistan (as in China,Mexico, Caribbean, Italy, Poland, Ireland)be given independence and space totake their own discrete steps in thedesigning and tossing of their localstrengths (Sialkot, Multan, Faisalabad,Gujranwala could market their respectivestrengths in sports & surgical, fruit,text ile, furn iture to fore ign marketsthrough Ghana-style expos and SBI-style investment roadshows). Whereasother constituencies could use the pathof persuading their sizable expatpopulations by using the native city

connections (for instance Manshera,DG Khan, Gujrat, Faisalabad havesignificant Diaspora communities in UK,UAE, Canada, Norway respectively)Chambers of Commerce of suchlocalities could use such connectionsas a powerful vehicle to market localprojects, investment opportunities,appeals for philanthropy or a request fortechnical, material, logistical support forthe export promotion of their productsand services,

National Rejuvenation ProgramThis program hits the highest tier of

Diaspora, having specialized knowledgeand expertise and are able to transfertheir skills to enhance the technologybase of their home country (known asthe Brain Trust policy adopted byTaiwan). Services of National InvestmentCounselors or similar groups withextensive networks globally and havingsophisticated-industries experienceeither by owning or working at onecould be leveraged in devising a hi-valueexpat database. A similar public-privateorganization in Pakistan should build aparallel portal that collects similar highvalue positions in local public and private

enterprises where permanent or short-timed stay of these people could be putinto service. This endeavor takes anextremely important role when Pakistans

research centers, think tanks, academicinstitutions, new ventures, technologyand software houses begin to capitalizethe experience and know-how of theseresourceful Pakistanis. A systematic andrecur r ing process o f match ing,scheduling and inviting this talented poolas guest researchers, strategists,lecturers, entrepreneurs and technicalexperts to guide, advise and leadp r i va te bus inesses and pub l icenterprises with much-needed freshperspective. Greatest potential in thisprogram exists in rejuvenating publicsector in a way that Pakistani expertsalready working in relevant officesabroad should be preferred and broughtin as consultants in large publicprograms.

One str iking example within theGovernment is how the PlanningCommission of Pakistan conceived thecountrys New Growth Strategy (Midterm plan). An innovative framework thatis viewed by many to have all thestrands of re-inventing Pakistanseconomy, is created and fine tuned by ateam of highly respected all-Pakistaniteam o f consu l tants occupy ingcommendable positions in the WorldBank and IMF

Likewise a parallel reverse-networkneeds to be built with the help of theseCounselors and through an extensiveonline National portal to market Pakistanita le nt ab road in wh ich ca pabl eprofessionals and services within thecountry are promoted as potential out-s o u r c e . O v e r s e a s P a k i s t a n ip r o f e s s i o n a l s a n d b u s i n e s scommunities could then be courted toadvance and avail certified Pakistanicompanies as their potential serviceproviders, suppliers, business partners.Such a partnership would not only give

local companies an Internat ionalexposure but over the time would helpdevelop their global network and thusthe outsourcing potential of country.

Institutional reformsBefore getting into the above mentionedp r o g r a m s , a s e a r c h n e t w o r k (comprising key public and privaterepresentatives along with a group ofpreeminent expats) needs to be createdfirst to not only look into all-possiblebottle necks for setting such initiatives,but also in strengthening the regulatoryframework, cutting and hasteningprocedural steps and the broadening ofincentives. Following the Chilean,Mexican and Taiwanese example inwhich the Diaspora (like any International

Financial Corporation or IMF) promisesto bring in investment, knowledge andthe affilia ted network provided theirrecommendations for reforms beinstitutionalized. The practice of buildinginstitutional infrastructure as stick, theirperformance as yard-stick, followed byinvestment the carrot by Diasporagroups has worked extremely well in re-inventing their home countrys businessbiosphere. By institutional reforms doesnot mean rectifying the Government andall its functionaries, it refers toimprovements in key agencies havingdirect impact in bringing in investment,setting-up and running new venturesand the competitive environment

ActionsMajority of the now-successful Asianmiracles kick-started their economicrevolutions with an active participation oftheir skilled Diaspora who voluntarilytook the charge of igniting that change.These countries initiated their attemptsto lu re expats when thei r homeconditions were barely conducive forSilicon Valley-style business successes.And yet they triumphed because theGovernments themselves were willingto accommodate and capitalize theirresource-rich Diaspora at whatever

reforms cost. Pakistan today if takeseven third of the proposed initiatives,can spark off a morphing process thatwill produce its own niche in not toodistant future

1.Government should locate affluent,influential and successful Pakistanisabroad especially in high net-worthforeign commercial hubs and approachthem on personal level ei ther bysending special missions led byprominent local business leaders or byactively engaging its Consulates, withthe aim of presenting holistic picture of

the new initiative, its course of actionand objectives.

2. Creating a powerful network out ofthese hundreds of overach ieverPakistanis based on their academic,business, political, social achievementsfor their role in orchestrating, owningand promoting Pakistans innovation,entrepreneurial strengths along withstrengthening the institutional system.Categorizing these people into potentiallong and medium term investors, andwith the help of well-crafted programsthese individuals be presented with

plans for moving their wealth andexpertise through their own businessp lans o r by fo rming synerg iespartnerships with dynamic and vibrant


Chiles institutional framework is far from perfect, yet it does have a segment which performs well enough to take calculated risks in developing newprograms and approaches, to be accountable for such calculated risk-taking and to assure continuity of performance with the change ofadministrations.

Newland K. (2004)


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business individuals and sectors inPakistan. First-mover advantage in adeveloping country like Pakistan needsto be leveraged should be the mainmarketing pitch.

3. Assimilate among them a global teamof expats with diverse experiences tobecome part of National MentoringProgram. Formulate rotating visits,schedu les and p l acements t oorganizations in Pakistan for consultativesessions in capacity building, plan andpolicy formulations, network building orthorough organizational re-engineering.

4. Integrating Pakistans Diasporanetwork across US, EU and East Asianfor synergism and comparing themthrough benchmarking framework onthe basis of activism, brain circulation,support and investment-at-home, isessential to coalesce a commonplatform, assimilate combined stratagemand formulate collaborative reformsthrust on the Pakistani government.

6. Let the thousand flowers bloom:Learning from the Irish example, thatapart from embarking on somespecifically directed Diaspora schemes,devised a mechanism to let a thousandflowers b loom. Such tha t theGovernment should support existingorganizational linkages and encouragenew social networks to be built by localprivate and Diaspora communities forthe Diaspora. The idea of para llel

network growth that is organic alongwith Governments own initiative is toforge the idea of an integrated societythat is able to synergies with or withoutGovernmental help. Also, naturally theorganic groups which are built aroundmutual designs and aspirations aremore likely to succeed as in thisparticular case they enjoy more trustthen the sponsored ones.

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Diaspora as Engine of Growth