DIASPORA BONDS: TAPPING THE DIASPORA DURING DIFFICULT TIMES

Suhas L. Ketkar and Dilip Ratha ()
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Suhas L. Ketkar: Vanderbilt University, USA

Journal of International Commerce, Economics and Policy (JICEP), 2010, vol. 01, issue 02, 251-263

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.

Keywords: Capital flows; diaspora bonds; emerging markets; G15; O10 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (16)

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DOI: 10.1142/S1793993310000147

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