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The World Region

My Long Trek to International Development

Lily Hua Qin's picture

It all started with a visit to the UN Office in Geneva during my vacation in 2006. Like any other tourist, I squeezed a silly smile in front of the camera at the entrance to get a visitor pass, which I am still keeping to this day as a travel souvenir. And then I followed a guided tour. Of course I had always known about UN – in textbooks and on TV. But there’s apparently something magic about actually sitting in the rooms where international conflicts were played out and listening to the stories that had made history. Having not completely emerged from my quarter-life crisis even after I got my MBA in the US and set on a seemingly promising career path at a big American financial institution, I had been searching for a mission. 

Honor Thy Sovereign Financial Obligations

Hoda Atia Moustafa's picture

In December 2010 and again in April 2011, MIGA issued contracts representing many "firsts" for the agency -- our first two non-honoring of sovereign financial obligations contracts, our first coverage for stand-alone debt, and first coverage for sub-sovereign credit risk. I was fortunate enough to have worked on both projects, which support public transport in Istanbul,

Pop the Champagne: Developing-Country Outbound Investment Hits Record High

Cara Santos Pianesi's picture

The UN Conference on Trade and Development (UNCTAD) has just issued its Global Investment Trends Monitor that looks at outward-bound foreign direct investment (FDI). Here’s the lead: The share of developing and transition-country FDI in global outflows increased to 28 percent in 2010, up from 15 percent in 2007, the year prior to the global financial crisis. These are historic levels, both in absolute terms and as a share of the global total of outbound FDI.

Another important snippet from UNCTAD is that a full 70 percent of developing and transition-country outward investment is destined toward other developing and transition countries—this is also known as “South-South” investment. The Monitor attributes this trend to the stronger recovery and economic condition is those destinations.

What to Expect in Davos: Global Risk Landscape

Kevin Lu's picture

One of the four themes  in Davos this year is risk management. The World Economic Forum (WEF) issued a report titled Global Risks 2011 earlier this month. It provides a high-level overview of 37 selected global risks as seen by members of the WEF’s Global Agenda Councils and supported by a survey of 580 top leaders and decision-makers around the world.

Issues related to macroeconomic imbalances top the list.  These are a group of economic risks including currency volatility, fiscal crises and asset price collapse, which arise from the tension between the increasing wealth and influence of emerging economies and high levels of debt in advanced economies.

In addition, a number of risks are related to geopolitics. They include: corruption, geopolitical conflicts, global governance failures, illicit trade, organized crime, space security, terrorism, and weapons of mass destruction.

Risk’s Rewards Are Many

Mallory Saleson's picture

Attending MIGA’s seminar today in London on cross-border investment in conflict affected and fragile economies prompted me to think back on my days in the field—not only during my experience with the World Bank in southern Africa, but to two decades as a journalist in the same region.

I traveled in a number of African countries where I reported  on fragile economies, on war and political violence, and on post-conflict rebuilding efforts. Some countries, to be sure, were more successful than others. Mozambique has always been singled out as among the miracles and it’s understandable. I went to Mozambique for the first time in 1984 to report on the civil war, which had already taken a heavy toll after seven years of intense conflict, and returned a number of times up until 1990. 

 

Chasing the Wind

Cara Santos Pianesi's picture

MIGA recently sponsored its seventh symposium on political risk issues, in tandem with Georgetown University’s School of Foreign Service. We happily note that the symposium has established itself as the world's leading forum for cutting-edge assessments of the international political risk management industry, and this year it did not disappoint. A summary of the event is here. 

I’ll concentrate on one trend that was noted clearly from the political risk insurance (PRI) providers, like MIGA, that were in attendance. All agreed that, since the international financial crisis, new business has mostly taken the form of obligor default products. For the PRI industry, an obligor is a country; this product is used when there is some sort of an agreement by which a government has financial payment obligations or guarantees with an investor.  The product is suitable for certain types of transactions, for example public-private partnerships or power purchase agreements.

  

More Precious than Gold?

Cara Santos Pianesi's picture

World Bank President Robert Zoellick will discuss topics other than gold while in Asia this week, in case you’re wondering.

One of those topics is infrastructure, which—to denizens in the developing world who struggle to move goods and people, drink clean water, and keep the lights on—may be more precious than any metal.

 

On Wednesday Zoellick was in Singapore for a prominent infrastructure conference, where he underlined that a focus on infrastructure is a key part of the solid growth agenda the G-20 is trying to tackle. He also noted some important facts. First, infrastructure investment represents two-thirds of growth increase in East Asia and about half of the growth increase in Africa. Second, the World Bank estimates the need for infrastructure investment and maintenance in developing countries will amount to about $900 billion a year.

Political Risk Insurance at the Forefront of Carbon Finance

Hoda Atia Moustafa's picture

Reduce. Reuse. Recycle. Green is the new black. With all of us more aware of global warming and the need to save our environment, the big question we at MIGA are asking is: what can we as an institution do to contribute?

Political Risk Insurance at the Forefront of Carbon Finance

One answer is that we can continue to do what MIGA has always done: supporting private investors. Specifically, however, MIGA can support those investors in the now well-established market of certified emission reductions (CERs) that are freely tradable on the European market, but depend heavily upon activities undertaken in developing countries. Investors relying on CERs as returns on their investments (in lieu of dividends) want assurance that governments that have signed up to the Kyoto Protocol will not renege on their commitments. This is very much a political risk, and with the right structuring is potentially a powerful political risk insurance product line.

May the Force of Broad-Based Economic Growth Be with You

Cara Santos Pianesi's picture

 If the world has a stage, the annual September gathering of the UN’s General Assembly is it. There, world leaders have an opportunity to address their colleagues (and, by media extension, global constituents) in a somewhat long-format speech. At the General Assembly, Premier Khrushchev banged his shoe. And, with understandably less attention, President Obama had this to say about development at this year’s High-Level Plenary Meeting (a.k.a. the Review Summit on the Millennium Development Goals):

“…To unleash transformational change, we’re putting a new emphasis on the most powerful force the world has ever known for eradicating poverty and creating opportunity. It’s the force that turned South Korea from a recipient of aid to a donor of aid. It’s the force that has raised living standards from Brazil to India… 

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