Saudi Arabia’s efforts to nationalize its labor market has resulted in thousands of laborers returning to Yemen. Yemeni workers are often unable to use the formal banking sector in Saudi Arabia, instead participating in the informal economy, and returnees have brought with them considerable savings. Yemeni workers in Saudi Arabia send over a billion dollars in remittances back home every year, but due to Yemen’s fragile banking sector and weak real estate market, they lack a way to safely invest their money.
In its latest publication, DeepRoot Consulting provides an overview of the Yemeni diaspora in Saudi Arabia and proposes that the Central Bank of Yemen may be able to capitalize on this large inflow of foreign currency through the issuance of diaspora bonds that returnees can purchase. This policy brief explains how the bonds would enable returnees to re-enter the formal banking sector and provide the Yemeni government an invaluable source of foreign currency for development projects and investments.
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