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Diaspora, external trade and FDI in South Caucasus countries
Pavel Chistyakov, Russia (Centre for Strategic Research; Geographic department of Moscow State University)
What can excuse the Russian intervention to the topic?
არც ისე წვამს, როგორც ქუხს or “a fish can not be estimated in water”
Multiple fieldworks in all three countries Sociologic research in 2007-2008 in Moscow
(links to diaspora, remittances, identity of migrants from South Caucasus)
Affection to South Caucasus
Geographic structure of export
>80% of Armenian export goes to countries where 70% Armenian diaspora lives
Near 60% of Georgian export is directed to countries bordering Georgia by land or by sea .
97% of Azerbaijan export is determined by oil contracts and configuration of pipelines
40%
Diaspora and sustainability of external trade
Liaisons with Diaspora provides higher sustainability of external trade compared to extreme dependency of oil export but it is more risky than diversified economic relations with neighbours
Armenia showed how diaspora can stimulate external trade during the period of rapid growth of the world economy. The future challenge is to elaborate mechanisms how diaspora can contribute during depressions
Diaspora inspires external trade: how it works and what should be done Experience of Armenia
1) Diaspora raises demand
1) Diaspora raises demand
“Nostalgic”(FMCG)
“Nostalgic”(FMCG)
“Corporate”(eg: metalls, chemicals)
“Corporate”(eg: metalls, chemicals)2) Diaspora helps to
reduce transaction costs of trade in foreign
countries
2) Diaspora helps to reduce transaction costs
of trade in foreign countries
Challenges for Azerbaijan1) Structuring and moving
out of “shadow” trade networks based on kinship
1) Structuring and moving out of “shadow” trade
networks based on kinship
2)Collaborate with
governments providing access to markets
2)Collaborate with
governments providing access to markets
Challenges for Georgia
Exploring consumers’ preferences
Exploring consumers’ preferences
Dealing with institutions
Dealing with institutions
Establishing business-contacts
Establishing business-contacts
Geography of FDI: similar tendencies?
Armenia
Azerbaijan
Georgia
>85%
70%
80%
Structure of FDI by economic sectors
Benefits and hazards of FDI made by diaspora The key issue of policy towards diaspora’s investment
activity is to keep balance between corporate and governmental interests
Sector Main benefit Main hazard
Industry Rise of productivity via technologic modernization
Conservation of “heavy” structure of economy and dependency on raw market conditions
Energy Reduction of accumulated depreciation of funds and risks of emergency
Dependency on energy companies corporate policy
Transport Opening borders of a country
Lost control of strategic objects in politically not stable region
Real estate Stimuli for construction, industry and services
Growth of real estate prices
Finances Availability of credit resources and derivatives
Risk of capital outflow
Consequences in Russia
Universal outlines of diaspora-policy
Projecting of collective action institutions – online (eg: “diaspora-social network” project startup) and offline
Personalization as of liasons between object and subject of help – support of concrete people by concrete people/villiges/small projects
Creation of conditions for repatriation – temporary (eg: well qualified youth) and permanent (eg: pensioners)
Formalization of informal networks based on kinship. International development institutions should be mediators
in process of Diaspora-Motherland interference due to
higher level of trust to them compared to local governments.
International development institutions should be mediators
in process of Diaspora-Motherland interference due to
higher level of trust to them compared to local governments.
Specification of the policy for South Caucasus countries considering cultural differences
What can unite Diaspora and country
Methodology Approach to instruments
Arm Ethnicity & history
To direct efforts of diaspora to reduction of dependency on diaspora
Elaboration of the joint concept of interrelationships –exchange of commitments
Az Kinship, fellowship and traditions
To develop “bridging” against bonding
Regionalization of diaspora-policy - social networking with territorial linkage
Geo Spiritual unity
Individualization and fragmentation of diaspora
Shaping the set of event and economic contacts according to interests of key-persons
Thank You for Attention!
Pavel Chistyakov, Russia (Centre for Strategic Research; Geographic department of Moscow State University)