Norway: Gov't subsidies for Pakistanis who invest back home

Pakistani immigrants in Norway who collect money for the development of their hometowns have been getting subsidies from the Norwegian government since last month. The Norwegian development cooperation hopes that immigrants will invest more productively in this way.

The offer holds only for groups of immigrants and not for the enterprising Pakistani who sends home money on his own. But these group may be informal. They don't have to comply to the strict conditions which non-governmental agencies in Norway must do in order to claim money from the government.

Each Norwegian-Pakistani immigrant association which collects at least 100,000 kroner (12,500 euro) from individual donors for development work in Pakistan can participate in the pilot project. If the experience succeeds, other countries will follow. Somalia can be the next country in line.

The Norwegian government doubles that amount that immigrants collect and counsels them in the direction of the projects which they support. This might be the building of a school, laying out a road or supporting beginning enterprises. Oslo hopes to profit from the knowledge of languages and cultural baggage of the immigrants. The official Norwegian development cooperation usually lacks in these areas.

"We want immigrants to encourage immigrants not only to send money to relatives, but also to the whole community and in this way to promote development," says Norwegian development minister Erik Solheim.

The Norwegian government is also considering way to reduce the bank expenses of immigrants who send money home. 10-20% of the starting amount usually goes to that. Norway also wants to legalize the Hawala system, an informal network from the Muslim world for transferring money cheaply.

Immigrants from developing countries send home 110-160 billion euro every year. That is much more than the official help sent by the North to the South. But a large part of the immigrant money goes to individuals who spend it on consumer goods.

Source: HBVL (Dutch)

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