Methods of Development | Development with a Hint of Nostalgia (Goods)

The diaspora community is the next big thing in development, making news with talks of diaspora bonds. However, another way that the diaspora community can spur development is by investing in the niche market of “nostalgia goods” and “nostalgia trade.” In a paper from the Migration Policy Institute, Kathleen Newland and Carylanna Taylor discuss the many benefits of investing in and contributing to the nostalgia markets in developing countries.

One of their main points reflects the trade imbalance between country of origin and country of migration. Noting that most countries with large immigrant populations have larger trade flows with countries of origin, Newland and Taylor maintain that encouraging cross-country flows is a useful mechanism to integrate the developing country into the world economy. In addition, exporting goods from the country of origin allows migrants to “maintain a sense of identity and community” while living abroad. This also creates a shift from informal economic transactions to a formalized chain of buyers, sellers, and distributors. The main venue for these transactions often occurs in local ethnic shops, with foodstuffs accounting for a significant percent of purchases. Local and artisan producers of nostalgia goods are usually unable to engage competitively with other international brands, and therefore rely on diaspora communities to generate demand. 

Consumption of Nostalgia Goods in 12 Countries

The paper also discusses “diaspora tourism,” which examines the benefits of diaspora groups that promote tourism in their country of origin. While migrants tend to return to their country of origin themselves to visit family members and friends, they are also more likely to seek out authentic cultural traditions and accommodations. Instead of encouraging tourism at the usual hot spots in the region, or staying at international hotel chains, diaspora groups have a considerable knowledge base to provide friends or acquaintances with safe and rewarding experiences outside of mainstream tourist activities. Diaspora tourism can also target low- to middle-income tourists, which expands the potential market outside of attracting high-income travelers.

These niche markets are uniquely equipped to integrate developing countries into the world economy. With support from diaspora communities, local communities gain access to new markets that provide them directly with higher sources of income. Furthermore, diaspora groups create demand for products that are representative of their culture, therefore maintaining a cultural identity potentially untouchable by the homogenizing process of globalization. Newland and Taylor also suggest that governments play a larger role in promoting diaspora tourism and trade by reducing barriers that would otherwise obstruct trade between diaspora groups and their countries of origin. This includes reducing visa restrictions for diaspora visitors as well, so that they are more likely to return frequently and make recommendations to friends.

As migration between countries continues to increase, remittances will not be the only form of economic transactions connecting migrants to their country of origin. Rather, the niche markets of nostalgia goods and trade will be able to expand to accommodate increased demand within complex economic and social networks. Integrating local goods into the world economy through diaspora groups is another way to sustainably combine the local and the global while maintaining cultural identities and products.

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