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The new normal

James Bond's picture

Representatives of chambers of commerce and private sector promotion agencies from developing countries expressed their concerns about where the new sources of growth would come from in future years, at a meeting of the World Bank Group's Private Sector Liaison Officers held in Istanbul on October 5.

A lively discussion between the PSLOs and MIGA management covered subjects relating to foreign direct investment into emerging economies, as well as investments by emerging economies into other emerging economies ("South-South" investment). 

There is a real concern about how the infrastructure gap in developing countries will be filled following the crisis, given the new scarcity of private funds for public-private partnerships. 

The world is looking very different

James Bond's picture

MIGA Post-Crisis Panel

From now on, there will be need to be a more nuanced relationship between public and private sectors to sustain growth, and regional sources of growth will become more diversified.  These are two of the conclusions of MIGA's discussion panel on the post crisis outlook held on October 4 in Istanbul.

A panel of international experts, including the Colombian Minister of Finance Mr. Oscar Ivan Zuluage, MIGA's Executive Vice-President Izumi Kobayashi, and Nick Rouse, Managing Director of Frontier Markets Fund Managers, agreed on some aspects of the vision going forward, but had differing views on others. 

Taking on a more proactive, energetic role, public authorities worldwide have played a large role in limiting the downside of last year's financial crisis, they agreed. In Eastern Europe and Central Asia, the International Financial Institutions Initiative (in which MIGA participated) to support recapitalization of these countries' banks drew mention as one example of this type of successful multilateral intervention. 

Taking the temperature of the financial world

James Bond's picture

Global attention is mounting about this year's Annual Meetings of the Bank and the Fund in Turkey. From Egypt, where I am on MIGA business on my way to Turkey, the discussion is around whether the meetings will advance the G20 communiqué in terms of substance and specific implementation measures.

Traffic in Instanbul, Turkey. Photo: Simone D. McCourtie / World Bank I spent two days earlier in the week with global private equity investors. Their anxiety mostly revolves around how financial sector regulation will evolve over the coming months. They feel the cold wind of oversight, and the discussion revolves around two competing plans for financial regulation, one emanating from Brussels and the other from Washington. But everyone accepts that an overhaul of financial sector regulation is the unfinished business from last year's financial crisis, even though views differ on the extent and content of the changes needed. My own concerns are whether the world's piecemeal international governance system will enable a coherent global regulatory structure to emerge from the wreckage of last year's financial meltdown.

In Istanbul I'm looking forward to taking the temperature of the financial world. I hope and expect the meetings to be more subdued than in past years, because we have some serious business to do; and many players who were around at the Singapore meetings are no longer with us (Lehman, Bear Stearns, Merrill, AIG...).

It's a new world.

Development banks join together to provide funding for Latin America and the Caribbean

Sameer Vasta's picture

Pouring and weighing fresh milk. Colombia. Photo: © Edwin Huffman / World BankThis past Wednesday, leading development banks joined efforts to provide as much as US$90 billion during the next two years in a joint effort to spur economic growth in the Latin America and Caribbean region.

The Inter-American Development Bank and the Inter-American Investment Corporation, the World Bank Group (IBRD, IFC and MIGA), Corporacion Andina de Fomento, the Caribbean Development Bank and the Central American Bank for Economic Integration are all working together to explore new opportunities to protect the economic and social gains achieved in the region during the last five years.

World Bank President Robert Zoellick spoke about the importance of this joint effort:

"Latin America and the Caribbean have achieved substantial economic and social progress over the last five years and we must ensure that this is not lost because of the external shock of the global crisis. We need to avoid a social and human crisis."

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