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NORWAY: Pakistani Remittances Drawn Towards Development

Tarjei Kidd Olsen

OSLO, Jul 8 2008 (IPS) - Norway wants to integrate diasporas into development work – and tap into the huge sums of cash that they send back home – with a new pilot project that seeks to beef up development efforts in Pakistan.

The government is promising to double the money that Norwegian-Pakistani civil society groups collect for development work in Pakistan, while coaching them in professional administration. At the same time the government is hoping to gain cultural and language insights from the immigrants.

If the pilot project is successful, diasporas from other countries based in Norway could be next.

“One reason for working more closely with immigrant groups is to encourage the transfer of funds to whole communities, not just to individual families, and to promote development,” says Norwegian development minister Erik Solheim.

Depending on how you count them, diasporas around the world transferred somewhere between 173 billion and 250 billion dollars to developing countries in 2005, according to the U.N. Despite the benefits of such large flows of money going to poor countries, the money is often not coordinated or geared towards development work.

Under the scheme relatively informal Norwegian-Pakistani civil society organisations that collect at least 100,000 Norwegian kroner (a little under 20,000 dollars) from individual donors will be able to apply for an equal amount from governmental development organisation Norad, thus doubling their money.

Norad already supports registered NGOs, but strict rules and requirements mean that few organisations rooted in the immigrant networks have had their applications accepted. Because of this the rules for applying have been relaxed to allow applications from less formal groupings of Norwegian-Pakistanis that are not officially registered as organisations.

“The groupings that apply for these funds will not have the same requirements for official NGO registration, statutes, board members, and control systems that our other applicants do. These groupings will be less established – for instance a collection of people that want to contribute to development in the village that they come from,” Norad’s civil society division chief Terje Vigtel told IPS.

The project is not only interested in the immigrants’ money, but also their brains. At the launch last month, minister for labour and social inclusion Bjarne Håkon Hansen noted that “first and second generation immigrants have valuable knowledge, for example with regard to culture and language, that is highly relevant for Norwegian development cooperation.”

Many previous Norwegian development projects have suffered from a lack of insight into local conditions, according to Vigtel.

“One of my experiences from many years of development aid is that when this work has been problematic and has not yielded the results we had hoped for, it has often been because we have understood too little about the driving forces – why things happen – in the societies we want to influence. Seeing as we have the opportunity to maintain direct contacts with diasporas and gain from their knowledge, it makes sense to establish closer relations with them,” Vigtel said.

If the project is successful, it is expected that the same approach will be used with other diasporas. Vigtel believes that Somalis may be next in line.

The Norwegian-Pakistani NGO Stiftelsen Laila og Amars Modellskole (LAMS), founded ten years ago and already receiving support from Norad, uses proceeds from a factory in Pakistan producing rag carpets to finance a school for poor children in a village outside the Pakistani city of Faisalabad. LAMS is supportive of the pilot project, and held a presentation at the launch.

“I believe that there’s a large Norwegian-Pakistani population in Norway that wants to know how they can contribute at home. We hope that our organisation can serve as an example of how it is possible to contribute even with limited means,” Laila Bokhari from LAMS told IPS.

“It’s true that Norwegian-Pakistanis send a lot of money to Pakistan, but until now a lot has gone towards their own families and personal interests. There’s not anything directly wrong with that, but one can also take into account the surrounding environment and broader society. Our organisation shows that it is possible to contribute in this way, and that this also benefits ourselves and our families,” Bokhari said.

She is happy that the government is also willing to learn from Norwegian-Pakistanis.

“I believe that Norwegian-Pakistanis are an underutilised and maybe also underestimated resource with a lot of useful knowledge, experiences, and not least, contacts.”

The project, officially titled ‘Pilotprosjekt Pakistan’, is a cooperative effort of Norad, the Norwegian foreign department, voluntary organisations and Norwegian-Pakistani groupings.

The government also wants to find a way to remove the 10 to 20 percent fees that immigrants have to pay to financial institutions when they transfer money to their countries of origin, development minister Solheim said at the launch. In addition work is ongoing to legalise the informal Hawala system of money transfers.