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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.

  

Powering up Africa

Rebecca Post's picture

Breaking news! The OrPower4 Project has been awarded:
African Renewables Deal of the Year 2009 from Project Finance Magazine.

After a long journey to Nairobi, in the midst of a much-needed shower, the room went black. Fortunately the lights came on a few seconds later. My good fortune was only due to the fact that the hotel’s generator kicked in – with its attendant high cost and environmental and safety hazards. 

I’m no stranger to the power outages that present themselves nearly every evening in this part of the world, but it’s one thing to experience a minor inconvenience, quite another for the business that is losing money due to power outages, the student who is losing out on opportunities because she can’t study at night, or the doctor trying to treat a victim of a late-night road accident. And these are the lucky ones. Only 15 percent of all Kenyans have any access to electricity.

Afternoon with Joe—Thoughts on Risk and Foreign Direct Investment

Michael Strauss's picture

My thanks again go out to the World Bank InfoShop for the opportunity to hear and meet former World Bank Chief Economist—and, indeed, Nobel Laureate—Joseph Stiglitz, who came to speak yesterday about his new book, "Freefall: America, Free Markets, and the Sinking of the World Economy".  His trademark frank analysis was both refreshing and enlightening; especially interesting, if troubling, was his view that central bankers’ inflation-hawk instincts will increase the likelihood of a double-dip recession.Freefall

This was a very general presentation about some of the hubristic, anti-regulatory thinking that created the conditions for the recent crisis and the errors in countries’ responses to it.  Stiglitz also excoriated the failures of political will and the power of the strongly entrenched, well-represented interests currently standing in the way of true reform.  These are his views, of course—I make no claims to know enough about what “really” happened to be authoritative on the subject, other than to say that his arguments were persuasive and his examples illuminating.

One subject I was surprised to hear him discuss, however, was the role of interconnected global capital markets in financial crises.  This was a key issue raised after the Asian crisis in the late 1990s; less so for the current “great recession”—although Stiglitz’s tag line that this was a crisis “made in America” and exported around the world reflects a common conclusion of much recent analysis.