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. 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.
Imagine a conversation. “So, your company is expanding its operations in country x, but I hear there is a lot of frustration among young people about unemployment. Are you worried about the possibility of political upheaval?” And the investor responds, “We’re not very worried about any instability. The current government has been in power for decades and we’re very well connected, so if there are any problems, we’ll be protected.” Without naming names, we can think about how this approach to risk management may have failed investors as of late, but such reversals of fortune predate the days of Twitter and Facebook – take the fall of the Suharto regime in Indonesia. At MIGA’s recent discussion titled “Best Laid Plans? How Ignoring Political Economy Affects Development Outcomes and Increases Risk", this attitude toward risk was aptly labeled “risk myopia.”
As part of the launch of the World Bank’s World Development Report, a distinguished panel (including MIGA’s own Edith Quintrell) convened at IFC to discuss the topic of Private Sector Growth and Job Creation. Jyrki Koskelo chaired the panel and asked for a lively and frank discussion. He got more than he bargained for.
In addition to Ms. Quintrell and Mr. Koskelo, the panel included:
- Arnold Ekpe, CEO of Eco
- Rosalind Kainyah, Vice President, External Affairs, Tullow Oil
- Justin Lin, senior Vice President and Chief Economist, World Bank
- Jay Naidoo, World Development Report Advisory Council Member, and, most provocatively
- Mohamed Ibrahim, Chairman of the Mo Ibrahim Foundation.
I recently represented MIGA in a special working group of the OECD focused on Iraqi reconstruction. It was an interesting and useful gathering, attended by Iraqi civil servants from across the administration, export credit agencies, and of course private sector representatives interested in doing business in the country.
Lebanon is a country of expatriates. Nine million of its 11 million inhabitants live abroad, in places as diverse as Terra del Fuego, Côte d’Ivoire, and Columbus, Ohio. The Lebanese Diaspora remains profoundly committed to its mother country, remitting money to family back home, investing, and visiting as tourists.
I'm in a unique position in MIGA, responsible for fielding initial investor inquiries about MIGA’s political risk guarantees. Over the last few years I have noticed a jump among investors considering MIGA cover in several countries. One of those countries is Sierra Leone.