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Diaspora Bonds: Tapping The Diaspora During Difficult Times

Author

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  • SUHAS L. KETKAR

    (Vanderbilt University, USA)

  • DILIP RATHA

    (The World Bank, 1818 H Street NW, Washington, DC, USA)

Abstract

India and Israel have raised over US$35 billion by tapping into the wealth of their diaspora communities. These diaspora bonds represent a stable and cheap source of external finance, often when countries lost access to international capital markets. For diaspora investors, these bonds offer the opportunity to help their country of origin while also providing an investment opportunity. The potential for diaspora bonds is significant for many countries with large diasporas abroad. However, diaspora bond issuance from countries with weak governance and high sovereign risk may require support for institutional capacity building and credit enhancement from multilateral or bilateral agencies. Haiti, for instance, could raise several hundred million dollars by issuing diaspora bonds provided a guarantee structure is created to build trust in the country's public institutions.

Suggested Citation

  • Suhas L. Ketkar & Dilip Ratha, 2010. "Diaspora Bonds: Tapping The Diaspora During Difficult Times," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 251-263.
    • Handle: RePEc:wsi:jicepx:v:01:y:2010:i:02:n:s1793993310000147
    DOI: 10.1142/S1793993310000147
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    References listed on IDEAS

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    1. Dilip Ratha & William Shaw, 2007. "South-South Migration and Remittances," World Bank Publications - Books, The World Bank Group, number 6733, December.
    2. Ratha, Dilip & Mohapatra, Sanket & Plaza, Sonia, 2008. "Beyond aid : new sources and innovative mechanisms for financing development in Sub-Saharan Africa," Policy Research Working Paper Series 4609, The World Bank.
    3. Suhas Ketkar & Dilip Ratha, 2009. "Innovative Financing for Development," World Bank Publications - Books, The World Bank Group, number 6549, December.
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    Cited by:

    1. Michael E. Cummings & Alan Gamlen, 2019. "Diaspora engagement institutions and venture investment activity in developing countries," Journal of International Business Policy, Palgrave Macmillan, vol. 2(4), pages 289-313, December.
    2. Binhan Elif, Yilmaz, 2018. "Remittances, and Human Development in Central Asia," MPRA Paper 106580, University Library of Munich, Germany, revised 2018.
    3. Lord Mensah, 2019. "Prospects and Feasibility of Diaspora Bond: The Case of Ghana," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 25-36, July.
    4. Thorsten Beck & Samuel Munzele Maimbo & Issa Faye & Thouraya Triki, 2011. "Financing Africa : Through the Crisis and Beyond," World Bank Publications - Books, The World Bank Group, number 2355, December.
    5. Meseguer, Covadonga & Lavezzolo, Sebastián & Aparicio, Javier, 2016. "Financial remittances, trans-border conversations, and the state," LSE Research Online Documents on Economics 68273, London School of Economics and Political Science, LSE Library.
    6. Þule AKKOYUNLU & Max STERN, 2018. "An empirical analysis of Diaspora bonds," Journal of Economics and Political Economy, KSP Journals, vol. 5(1), pages 57-80, March.
    7. Hasanuzzaman Zaman & Mashfique Ibne Akbar, 2013. "Exploring non-traditional sources of development finance: The case of remittance in Bangladesh," Progress in Development Studies, , vol. 13(2), pages 105-116, April.
    8. Gevorkyan, Aleksandr V., 2015. "The legends of the Caucasus: Economic transformation of Armenia and Georgia," International Business Review, Elsevier, vol. 24(6), pages 1009-1024.
    9. Möhlmann, Axel, 2013. "Investor home bias and sentiment about the country benefiting from the tax revenue," Journal of Economic Psychology, Elsevier, vol. 35(C), pages 31-46.
    10. Bożena, Chrząstowska, 2019. "Labour Migration and Remittances in Eurasia," MPRA Paper 106628, University Library of Munich, Germany, revised 2019.
    11. Ishan Ashutosh, 2019. "On the grounds of the global Indian: Tracing the disjunctive spaces between diaspora and the nation-state," Environment and Planning C, , vol. 37(1), pages 41-58, February.
    12. Vikhrov Dmytro, 2013. "Welfare Effects of Labor Migration," CERGE-EI Working Papers wp491, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    13. Beverley Mullings, 2022. "Racial capitalism, coloniality and the financialization of Caribbean remittances," Environment and Planning A, , vol. 54(4), pages 744-760, June.
    14. Awdeh Ali, 2018. "Financing for Development in the MENA Region," Review of Middle East Economics and Finance, De Gruyter, vol. 14(3), pages 1-14, December.
    15. Aki Harima, 2015. "Motivation of Japanese Descending Diaspora Entrepreneurs (Motywacja przedsiebiorcow diaspory japonskiej bedacych potomkami emigrantow)," Research Reports, University of Warsaw, Faculty of Management, vol. 2(19), pages 22-36.
    16. Aleksandr V. Gevorkyan, 2022. "Diaspora and Economic Development: A Systemic View," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1522-1541, June.

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    More about this item

    Keywords

    Capital flows; diaspora bonds; emerging markets; G15; O10;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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