The $325 billion in remittances — on average — that migrants send annually to their home countries dwarf international aid flows. If harnessed, these have the potential to become a significant source of development financing, a World Bank official said.
Nearly two-thirds of the world’s 214 million migrants live in wealthy countries. They send remittances to their home countries in Asia, Africa, Latin America and the Caribbean. Their average annual remittances is far greater than the record-high $129 billion in official development assistance from developed nations to the world’s poorer countries in 2010.
But Ratha said diaspora savings are estimated to be far more than that — at least $300 billion annually.
And yet, he said most of such savings are “currently invested in low-yield deposits or held as cash under the mattress.”
So far, Israel and India have successfully launched diaspora bonds. Together, these two countries have raised nearly $40 billion since 1951 via diaspora bonds.
The World Bank is currently working with Kenya, Nigeria and the Philippines on diaspora bonds. The bank serves as an honest broker: between investment bankers and the government, between the government and the diasporas, between the government of the issuing country and the government regulators in the destination country for migrants.
With the number of migrants expected to rise to 405 million by 2050 according to the International Organization for Migration, Ratha said the potential for diaspora bonds will also increase.
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