Diaspora Bonds And Haitian Americans : Planet Money A World Bank economist says diaspora bonds could entice a large number of Haitian immigrants to take a larger role in helping Haiti rebuild.
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Diaspora Bonds And Haitian Americans

Haiti's government offices and banks are still a long way from functioning normally, but that hasn't stopped analysts and economists from suggesting what they should work on once they return.

Dilip Ratha, lead economist at the World Bank, is thinking about diaspora bonds:

In the past diaspora bonds have been used by Israel and India to raise over $35 billion of development financing (see my article with Suhas Ketkar). Several countries - for example, Ethiopia, Nepal, the Philippines, Rwanda, and Sri Lanka - are considering (or have issued) diaspora bonds recently to bridge financing gaps. Besides patriotism, diaspora members are usually more interested than foreign investors in investing in the home country. Not only Haitians abroad, but also foreign individuals interested in helping Haiti, even charitable institutions, are likely to be interested in these bonds. Offering a reasonable interest rate - a 5% tax-free dollar interest rate, for example - could attract a large number of Haitian investors who are getting close to zero interest rate on their deposits.

If 200,000 Haitians in the US, Canada and France were to invest $1,000 each in diaspora bonds, that would add up to $200 million. If these bonds were opened to friends of Haiti, including private charitable organizations, much larger sums can be raised. If the bond rating were enhanced to investment grade rating via guarantees from the multilateral and bilateral donors, then such bonds would even attract institutional investors.

Ratha goes on to point out that if you think Haitian immigrants can't afford to invest, you're wrong.

From the Current Population Survey of the US: nearly one-third of Haitian immigrants in the US belong to households that earned more than $60,000 in 2009. In comparison, less than 15% of the immigrants from Mexico, Dominican Republic and El Salvador in the US had that level of household income.

For more information about Haiti's economics, check out this helpful fact sheet from the World Bank's People Move blog. (Thanks to Marginal Revolution for the pointer.)