2007 Research Project on MSAI - The Gist So Far...

Onkar and I will be collaborating on a joint research project in the Philippines and throughout SE Asia from March-November 2007. As former SYLFF fellows, we're hoping the Tokyo Foundation will fund our work. We'll be working with the two organizations I worked with over the summer-- Migrant Forum in Asia and Unlad Kabayan.

Some background - feel free to comment!

Many microfinance-development programs have been launched to help migrant workers and their families make the most of their remittances. One strategy is to focus on social enterprise development, whereby migrant workers raise capital by pooling their savings and/or taking out microcredit loans to invest in social enterprises.

Unlad Kabayan Migrant Services Foundation is employing this strategy through their Migrant Savings for Alternative Investment (MSAI) program. MSAI equips returning migrant workers with the capital (acquired through pooled savings groups and credit) and business/technical training to start or invest in social enterprises— businesses that are market-oriented and profitable, but have a social impact, benefiting families and communities.

Critics of migration and remittances often argue that money received by households goes mostly to consumption and may exacerbate income inequality—two conditions that contravene development objectives. Or, if migrants return with enough capital, they may establish businesses with little social value, benefiting franchisors or foreign suppliers. But what has been found is that the net effects of remittances depend on the maturity of the migration experience. Indeed, migrant households will devote most of their remittances to consumption—at least at some primary and initial stage in the remittance receiving cycle. What is more relevant is to analyze how remittances influence a household’s propensity to partake in various economic behaviors, and how this propensity changes over time.

Through MSAI, Unlad aims to accelerate this maturing process by creating a productive base and local economy that can absorb the benefits of remittances on a scale and context beyond the migrant household and into the communities to benefit all sectors of society. This is done in two ways:

1. Social enterprise development funded by migrants through remittances (mobilized through its pooled savings programs in host countries) or loans (accessed through its microcredit program) that empowers migrants and their families to become social entrepreneurs and leaders in their communities. Unlad also pioneered SEEDS (Social Entrepreneurship and Enterprise Development Services), a one-stop shop for business development services.

2. ‘Asset-Based Community Development (ABCD)' approach that identifies local assets (available infrastructure, such as a building or plot of fallow land, and/or crop comparative advantage) and cultivates their development potential with the help and partnership of local government.

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The purpose of our research is to evaluate the sustainability (commercial longevity and profitability) and social and economic impact of MSAI. Compiling statistical evidence and case studies is especially critical because two new initiatives are being launched that will dramatically affect how MSAI is operationalized and reshape migrant advocacy in the region:

1. Regionalization. Migrant Forum in Asia plans to introduce the concept of reintegration and asset-building among migrant worker groups throughout the region in a pilot project called,“Empowering Migrant Workers in Host Countries towards Organizing for their Rights and Security through Migrant Savings for Alternative Investment (MSAI)”.

2. Upscaling. Capital requirements are mostly harnessed from migrant workers working in Asia . But migrant savings, individual or pooled, cannot meet all of the expansionary financing needs of its social enterprises. To address this, Unlad is launching a Road Show in the U.S. and Europe in 2007. The campaign aims to mobilize investments from overseas Filipino communities to supplement migrant remittances in upscaling its projects. The Road Show will create an enterprise development revolving fund (to provide seed money for start-ups under business incubation) and investment funds (for existing enterprises ready for expansion), as well as build partnerships and visibility abroad through local organizations.

By the end of the week, I should have some updates for you all on the Road Show prep-- holding a Skype meeting with Sari (Road Show Coordinator), Mario (SF focal person), and Michael (DC focal person). It's been a while since we talked-- Sari has been busy in Mindanao coordinating with the social enterprises and local government, as well as setting up various committees. Lenora, our Earth Institute contact, is traveling in Europe this week and next, but she'll be getting back to us regarding possible partnerships with the B-school and several foundations.