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war and civil disturbance

Reflections on Investment Prospects for Countries Facing Fragility and Conflict

Kyoo-Won Oh's picture

Facilitating investments into Fragile and Conflict-Affected States (FCS) is one of the most important strategic pillars in MIGA’s Strategy. In an effort to further expand MIGA’s support in FCS countries, I recently visited Burundi, South Sudan, and Afghanistan and met with investors, government agencies, and donors. Although the investment climate varies in these FCS countries, I observed the following four common threads during my visit.

First, despite the deteriorating security situations, there are still investors seeking business opportunities in FCS countries, as long as the expected return on investment is sufficiently high to cover a required level of return plus risk premium.[1] When it comes to the investors actively operating in FCS countries, their concerns appeared to be more focused on unexpected and arbitrary changes in government policies against their investments, rather than the security issue itself. Most aspects of the government-related procedures are risks beyond the control of investors, for example, renewal of licenses and permits, taxation, and various contracts signed with the government. Investors usually go through several political cycles during their investment horizon. An approval from the current government does not guarantee the same approval would be obtained from the succeeding government. A foreign investor I met in Afghanistan cemented this notion by telling me that “when we made a decision to invest in Afghanistan, we were already well-aware of the security issue in the country. For us, the security was a foreseeable risk that could be mitigated to some extent, if not entirely avoidable. We can take care of security risks as well as commercial risks; but what concerned us the most was the risks related to uncertainties in the government’s regulation and policy.”
 

Juba, South Sudan
Juba, South Sudan

The Palestinian Private Sector: Resilience in the Face of Harsh Conditions

Layali H. Abdeen's picture

I recall the first time I visited Nakheel Palestine for Agricultural Investments Company fields at Jericho two years ago, when MIGA was still at the early stages of underwriting the project constituting planting date trees. packing dates for Nakheel Palestine for Agriculture Development The land was empty and, at the first glance, the first thought that came to mind was “how can this be developed into arable land?” When MIGA’s Executive Vice President Izumi Kobayashi visited the site for the first time a couple of weeks ago, we found ourselves in fields filled with baby date trees that have beautified the land with their green leaves. And in a tour in the packing facility of the project, we saw how young female workers were sorting and packing the dates, realizing that each of these workers is supporting a household of minimum five members in a very impoverished area.

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…