5.1 The case of diaspora investment in small states
Recognising this imperative, the Commonwealth Secretariat released ‘From Brain Drain to Brain Gain: Unlocking Diaspora Finance in Small States’ 15 in 2025, underscoring the strategic importance of more effectively engaging global diasporas.
The publication highlights that remittances – now exceeding official development assistance and foreign direct investment (FDI) in several Commonwealth small states – remain highly resilient, even in periods of global disruption. It further demonstrates that diaspora investors often exhibit a ‘patriotic discount’, accepting lower financial returns in support of national development priorities, and identifies significant opportunities to channel diaspora resources into climate resilience, tourism, entrepreneurship and infrastructure. The paper concludes that with appropriate policy frameworks, enhanced transparency and sustained trust-building, small states can transform diaspora engagement into a powerful lever for inclusive growth and long-term economic resilience.
5.2 The ripple effects of US tariffs: economic implications for the Commonwealth
The ‘America First’ trade agenda advanced by the current US administration, featuring higher tariffs and stricter trade controls, poses a threat of increased barriers to trade worldwide. The waves of tariffs announced by the US and other major economies since early 2025 are placing considerable strain on the global trading system and compounding trade policy uncertainty worldwide. This may herald delays in investment decisions and threaten global FDI flows, while reducing revenue and raising operational costs for businesses, especially for micro, small and medium-sized enterprises.
This trade agenda is also likely to disproportionately impact the trade flows of smaller, vulnerable economies and least developed countries (LDCs), particularly those commodity-dependent economies relying on duty-free or low-tariff exports to the US market, as well as the investments they attract through such market access opportunities. For this reason, in 2025 the Commonwealth published ‘The Ripple Effects of US Tariffs: Economic Implications for the Commonwealth’,16 which assesses the potential trade-related implications and wider economic impacts of the US tariff policy for Commonwealth countries.
It suggests insights and actionable pathways to help countries, including small states, mitigate the anticipated negative effects of the trade policy measures announced to date and navigate the significant uncertainty and rapidly changing dynamics in the global trade landscape.
Footnotes
15 Mughogo, T, Munthali, T and Kattumuri, R (2025), ‘From Brain Drain to Brain Gain: Unlocking Diaspora Finance in Small States’, Small States Matters 2025(1). Commonwealth Secretariat. http://www.thecommonwealth-ilibrary.org/index.php/comsec/catalog/book/1141 | [back]
16 Balchin, N, Kampel, K, Munthali, T, Shaaran, A and Zhuawu, C (2025), ‘The Ripple Effects of US Tariffs: Economic Implications for the Commonwealth’, Commonwealth Secretariat. https://www.thecommonwealth-ilibrary.org/index.php/comsec/catalog/book/1143 | [back]