FACT SHEET: Harnessing Diaspora for Economic Development in Bosnia and Herzegovina

Project snapshot:

Total funding: $5.2 million

Project duration: April 2017 - March 2022

Implementing Partner: Financial Markets International Inc.

The Challenge

More than 2 million people originating from Bosnia and Herzegovina (BiH) reside outside of the country. This diaspora is mostly well integrated and better off than other migrant communities in their host countries, with ample potential and willingness to contribute to the development of BiH. This is evidenced by substantial diaspora remittances, currently estimated at 14 percent of BiH GDP, greatly exceeding the FDI flows into the country. However, BiH’s interaction with diaspora has been largely unstructured, with little systemic engagement and no incentives to help channel their investments toward productive uses in terms of socio-economic development. A decisive intervention is needed to engage with diaspora investors in a planned, thoughtful manner, provide incentives for investment, and establish a local platform to provide diaspora business services and facilitate investment.

The Program:

USAID’s Harnessing Diaspora for Economic Development Project catalyzes diaspora’s contribution to socio-economic development in BiH by structuring, stimulating, and supporting diaspora investment in the home country. The project has three main components:

  • Assisting in the development of the strategy framework for diaspora investment and engagement in the economic development of BiH, which will be integrated into economic development strategies and action plans at all levels of government (state, entity, cantonal and municipal).
  • Expanding diaspora direct investment through technical assistance and grants to eligible early-stage small and medium-sized enterprises. Assistance includes establishing a BiH diaspora marketplace and Business Plan Competition to source innovative and high-growth oriented business ideas and providing business advisory services and other technical assistance. Successful investors and startups will also be eligible for DCA-backed loans provided through a complementary USAID program outside of the scope of this project.
  • Developing a sustainable local platform to provide diaspora business services and facilitate investment. The project will establish a one-stop shop for diaspora investors, create an online diaspora business network, and conduct outreach activities, including the organization of diaspora investment conferences and B2B events.

Expected Results:

The project is expected to result in:

  • Integration of BiH diaspora in development planning and policy implementation at all levels of government;
  • At least 140 diaspora firms will graduate from the program, which translates into at least 250 jobs created and direct investment of $2 million through the Business Plan Competition;
  • Increased diaspora investment by $20 million by the end of project;
  • Increased diaspora knowledge transfer; and
  • More cohesive diaspora business networks and continued diapora investment support through the diaspora one-stop shop and an online BiH diaspora map.