How to increase remittances

As it stands, the personal remittances received act as a substitute for a social security system. For many of those who receive them, they represent a safety net from complete destitution. However, like social security, in some cases they can also act as a disincentive for the recipient to study and work.

Maybe there could be some sort of mechanism for Dominicans living overseas to support training programmes and invest in business initiatives in their own communities back in the DR that help people get better jobs, boosting their income and in turn contributing to the country's development. It is far healthier for a community when its members are working actively to support themselves, than sitting around passively waiting for remittances.

The HUGE snag here, of course, is the potential for corruption. I completely understand why people prefer to send money directly. Who would manage these funds, and how?

Dolores said:

If you were the government, what would you do to encourage Dominican expats and foreigners abroad that have Dominican ties to send more remittances or invest more in the country?

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On the remittance side it's a little tough to decide what would I do, if I were the government, to increase remittances. For one, the amount of remittance is decided by the income level of Dominican expatriates and how many people they are sending money. Given that most Dominican expatriates are barely above the poverty line, it would be a hard sell to attempt to have them increase their remittances.

In terms of foreigners and remittances, similar situation unfolds. However, there the issue is more of how much pity they may feel for their Dominican counterpart and that (along with personal finances among other things) would define how much and how often remittances are sent.

In both instances, its a very personal matter that I think needs to be tackled on a personal level. Any attempts to increase remittances needs to be done on a person to person level, because no public policy would over ride personal understanding of each person's economic ability to send a certain amount of money.

Now, regarding investment from Dominican expatriates and/or foreigners with Dominican ties, here there is a chance that public policy could work. The most important thing that could be done is increase the level of confidence in the DR as a good place for them to open businesses, invest in other things, etc.

This could be done through an aggressive marketing campaign that constantly targets various media outlets that directly reaches the Dominican expatriate communities and/or foreigners with Dominican ties.

Such marketing campaign would had consisted of constant reaffirmation of the macroeconomic stability the country has enjoyed, reiterate the stability of the exchange rate and how that positively affects the Dominican economy, put tremendous emphasis on the great economic growth rate and make linear projections on what that could mean for the overall Dominican economy if things were to continue into the forseable future.

All of that would have been done in easy to understand language, with easy to understand diagrams and visuals which gives a clear message that the Dominican economy is doing well and the DR is open for business.

The single biggest problem to this is reaffirmation Dominican expatriates could receive from family members in the DR that things are "bad". In order to counter such negative messages, the marketing campaign would also involve the use of several promoters to go into Dominican enclaves and towns with sizeable Dominican populations to show them in person on a one on one basis the potential benefits they could reap for themselves, their families in the DR, and the DR in general if they were to develop a comprehensive plan and invest in the DR.

The reason why such one on one personal basis would be needed is in order to cultivate a human to human connection and trust to rival the trust the Dominican expatriate has with his family members who will no doubt be telling him/her that things are "horrible".

The truth of the matter is that for poor people, the economy is always in a horrible shape and they will always see it as such unless they see their standard of living not just rise, but rise faster than that of their neighbors. This causes a fatalism among poor Dominicans who will consider the Dominican economy to be in "bad shape" even when things may not be bad per se.

Also, personal interviews with Dominicans who invested in the DR and had from satisfactory to excellent return on their investment and using their statements on the aggressive marketing could help reshape Dominican expatriate perception of investing in the DR into something they will see in a positive manner and thus, will be more willing to actually invest.

In conjunction with such aggressive marketing campaign, ideas on how to form partnerships and pool money together, apply for loans, create companies, etc in order to invest in the DR even if they don't personally have all the money to invest would be a wise thing to do. Many Dominicans will discard the idea of investing if they simply focus on their personal economic situation.

However, if you let them see what the possibilities could be if they cooperate, get together and form organizations and companies which pools resources together and collectively invest in the DR, they will probably be more receptive to the idea of investing in the DR.

And last but not least, form "investing trips" to the DR, even to Dominican expatriates. Take them on tour of small, medium, and large investments done in the DR which had satisfactorily to excellent ROI and show them that if they organize themselves they could potentially reap the same benefits. Take them to see the "other DR" beyond the one that dominates their minds of impoverished stuck countryside or powerlessness dreaded barrios. Allow them to see the opportunities that abound all over the DR and allow them to see how they can exploit those opportunities for their own benefit and the benefit of the DR as well.

Having said all of that, this is assuming that there was an unlimited budget to conduct such aggressive attempt in increasing investments from Dominican expatriates and/or foreigners with Dominican ties. In a more realistic case, mcuh modifications would have to be made.

There, those are my two cents on this.

-NALs