Give expatriates something worth investing in

Bangladesh’s expatriates sent home a record $35.56 billion in the fiscal year just ended, up 17.3 percent on the previous year. Consider a second number. The total the diaspora has ever parked in Bangladesh’s three dedicated expatriate bonds stood at around $1.75 billion at the last published count, in mid-2021, and the bonds have been shrinking since. Thirty-five billion dollars flows through Bangladesh every year. Yet only about 5 percent of a single year’s flow has ever stayed as investment.

That is not because the diaspora lacks money or interest. It is because Bangladesh has never built anything worth investing in.

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The Wage Earner Development Bond and the two dollar bonds are savings certificates: fixed rates, paid mostly in taka, not tradable or listed, and impossible to hold as an asset abroad. The government removed the investment ceiling in December 2024, and the response was redemption. Net sales have been negative for three straight years. In FY24 alone, expatriates pulled out Tk 1,913 crore more than they invested. The stock market tells the same story: barely 90,000 expatriate investment accounts from a diaspora of around 9 million. When non-residents were allowed to buy ordinary treasury bonds, their holdings jumped from Tk 3 crore to Tk 755 crore within a year. Offered a genuine market instrument instead of a savings certificate, money moved. The product is the problem.

Other countries worked this out long ago. Israel began selling bonds to its diaspora in 1951, three years after statehood, with no credit rating and few reserves. That programme has since raised more than $54 billion, including investments from US state treasuries. Nigeria proved the model. Its 2017 diaspora bond raised $300 million and was oversubscribed by 130 percent because it was registered with US and UK regulators, priced at market rates, listed in London and ring-fenced for infrastructure. Diaspora bonds that failed elsewhere did so for the opposite reasons: they were unregistered, administratively priced and offered no protection where investors lived.

In 2018, I led the $125 million London listing of ASA International, still the only Bangladeshi-origin company on the London Stock Exchange main market. Global institutions bought Bangladeshi risk once it came with international governance and a listing they could trust. The diaspora, which knows the country far better, would do the same. I should declare an interest: connecting investors with capital markets is my day job.

The government’s new diaspora policy is reportedly in its final stage, and the foreign secretary has identified the “trust deficit” as the main barrier. But trust is not requested in capital markets. It is built through registration where investors live, an independent trustee overseeing the proceeds, a market-based coupon and a published use of funds.

I argued last month that Bangladesh should build the capacity to issue internationally before the concessional financing window closes. A diaspora bond is the natural first step: the friendliest buyer a first-time issuer will ever have. Issue a bond of a few hundred million dollars, registered in the UK and US, listed internationally, priced at market rates and ring-fenced for named infrastructure projects. Sell it through the banks and platforms where the diaspora already keeps its money, from east London to Riyadh. Expatriates have been sending the same message for years. They are not rejecting Bangladesh. They are refusing a passbook instead of an asset. Give them an instrument worthy of $35 billion a year, and some of it will finally stay.

The writer is an investment banker and managing director at RetailBook. He can be reached at fahim@arcapholdings.co.uk