Fragile and conflict impacted states often suffer from a severe lack of investment capital for private sector development. Diaspora investors have the potential to play a critical role as frontier investors, providing much needed capital for economic growth and development. This report explores a variety of investment mechanisms and public policies which might help facilitate this important form of investment.
The large majority of diaspora investors are driven by a combination of profit motives and a desire to positively impact socioeconomic development. Investment opportunities targeted to the diaspora should therefore focus on those opportunities which provide both reasonable return and development impacts.
Developing investment mechanisms which are diverse and flexible in investment term, amount, liquidity, and holding will be critical to capturing the entire spectrum of potential diaspora investment.
Basic research on diaspora investor preferences and modest official efforts to engage with diaspora communities can have an outsized impact on diaspora investment inflows that can be leveraged for development.