Why did the prime minister’s supporters, who recently filled the Capital One Arena in Washington DC to the brim, not heed his repeated calls to invest in the diaspora bond?

Read: 'Naya Pakistan is being created in front of your eyes,' PM Imran tells packed crowd in Washington

Were 6.5 per cent and 6.7pc returns for three- and five-year instruments, respectively, not attractive enough to nudge the non-resident Pakistanis to partake in building the new future?

The economic dream team of the government contested the perception that the initiative fell flat. The response to the Pakistan Banao Certificate (PBC) is said to be meek and nowhere close to the real potential.

It might be the fear of a blowback in their country of residence that is restraining them from diverting investment to Islamabad

“People are pouring money as we talk. The flow is slow but funds are trickling in the scheme and we expect it to get better with time,” said Kamran Ali Afzal, a senior officer at the Ministry of Finance who was involved in the scheme from the conception to the launch and is now closely monitoring it.

He talked about the peculiarity of the scheme that targeted individual, non-resident and relatively rich Pakistanis who were interested in a new product designed for them by their native country. Besides attractive returns, the investment in PBC promises the warm glow to investors who get some sense of participation in the efforts to pull the country out of the current balance-of-payment troubles.

“It is wrong to confuse the PBC with conventional bonds with pre-specified targets, definitive market (institutions, hedge funds, etc) and defined modus operandi. This is a new retail product for individuals.

“Yes, the financial landscape is tough with ‘know your client’ and other requirements of stringent FATF standards. There are issues of jurisdictions besides the cost that came in the way of advertising overseas to reach the target investors. However, the word is spreading and the scheme is gradually gaining traction,” he told Dawn over the phone from Islamabad.

Dr Khaqan Najeeb, spokesperson for the Ministry of Finance, complemented his stance. He emailed a statement saying: “(The) PBC is the first sovereign retail instrument issued by the government for overseas Pakistanis, which gives an opportunity to the Pakistani expats to invest in their country’s development and also earn handsome returns. So far, over 4,500 expats have registered themselves on the PBC portal out of which 665 investors have invested $28.93 million.

“The registration of expats is encouraging, which is likely to get more momentum once we have regulatory approvals for marketing of these bonds in different jurisdictions having a sizeable presence of Pakistani expats. The participating banks are in the process of obtaining regulatory approvals to market the PBC in various countries. The response of investors so far is largely due to the marketing efforts confined to advertisements in local print and electronic media and the local websites frequently visited by expats,” it said.

Another senior officer clarified that the scheme is currently operational and did not expire in June as reported in some press stories. “The advertisement campaign ended in June, not the scheme itself,” he said.

Not everyone in the mother of all ministries was satisfied with the performance of the diaspora bond though. A member of the team privately told Dawn that the product was designed in haste without proper homework on the price point and the cost-benefit analysis of engaging companies specialising in the marketing of such bonds.

“It was a good idea but the product was weak and the execution of the scheme was hopeless from the word go. There were issues of affordability, accessibility, credibility and regulatory requirements that did not let it succeed.

“The minimum investment of $5,000 pushed the PBC beyond the reach of a big segment of non-resident Pakistanis (blue-collar workers). Where was it selling over the counter? No one knew. People living overseas were scared of the added scrutiny of their financials if they dealt with Pakistani banks of less-than-perfect reputation.

“I think it was asking for too much. Yes, there is a risk factor but inaccessibility and cumbersome dealing dissuaded even those who could afford and were willing to dig in,” he said.

He was also critical of the role of the State Bank of Pakistan (SBP) that he said lacked capacity to execute a sophisticated product abroad.

“The task had to be designated to the SBP that was being headed by a career bureaucrat with limited expertise in finance at that point. To me, this is an expected outcome,” he said.

A source in the SBP, who is familiar with the interaction between the central bank and the finance ministry in that period, laughed off such criticism. “How can they hold others responsible if their idea failed to fly?” he asked.

“The Ministry of Finance has long been in the business of directing the SBP with limited patience for a differing opinion,” he added, bitterly giving away the resentment towards the high-headedness of the occupants of Q and P blocks of the Secretariat in Islamabad.

The SBP declined the request for comment on the performance of the PBC. “We have provided our input to the Ministry of Finance and it will communicate a consolidated update on the PBC to you,” SBP spokesperson Abid Qamar said.

“Maybe it is unrealistic to expect PTI’s overseas supporters to do something that puts into question their loyalty to their country of choice as opposed to their country of origin. I don’t think the issue at the heart of the failure of the PBC is affordability or accessibility. It is the fear of a blowback and associated risks that are restraining expats from diverting investment to Pakistan,” a Pakistani political scientist living in Washington said over the phone.

Published in Dawn, The Business and Finance Weekly, July 29th, 2019