MIGA Launches Asian Hub, Lu to Head
August 30, 2010—On August 30th MIGA announced the launch of its Asian hub and started to operate in Hong Kong SAR, China and Singapore—expanding the agency’s reach beyond its Washington, DC headquarters.
Kevin Lu, MIGA’s CFO and Director of the Finance and Risk Management Group, will head the hub in his new role as Regional Director for Asia-Pacific. Lu will be joined by Hal Bosher, Senior Underwriter based in Hong Kong, and Ann Russell-Cook, Senior Underwriter based in Singapore. Rounding out the team will be local representatives Chao Shen (in Beijing) and Yasu Himeno (in Tokyo).
Better and more efficient access is essential to servicing MIGA’s Asian stakeholders. MIGA felt a particularly acute need for a base in Asia due to the robustness of the region’s investment activities, both inbound and outbound, as well as practical challenges such as geographical distance and time difference.
Asian investors, like most others, started by targeting opportunities in their own countries. Yet as these investors continue to advance their strategy, they are looking for areas beyond their geographic confines—to Africa and Latin America, for example.
Lu notes, “This is a clear trend and also a critical point for MIGA: we are well-positioned to help investors mitigate risks and navigate issues they may have not encountered before.”
“We also encourage investments that consider financial, environmental, and social sustainability as interlocking factors that contribute to long-term success. Asian investors are cost-conscious. Sometimes this can mean that the short-term horizon takes precedence,” says Lu. “We want to encourage a longer-term view.”
Since MIGA’s inception in 1988, the agency has issued over $560 million in guarantees for 30 projects undertaken by Asian investors.
Recently, MIGA signed memoranda of understanding with both the Japan Bank for International Cooperation and Korea’s Eximbank to cooperate to promote private sector investment in developing countries. These are in addition to the reinsurance agreement signed between MIGA and Japan’s Nippon Export and Investment Insurance (NEXI) in 2009.
With respect to inbound investment into the region, MIGA’s primary focus will be to help ensure that investment flows are long-term and rational. The region has learned a lot from its 1997 financial crisis on how to avoid “hot money” —and the payoff has been clear in the region’s relative resiliency in the face of the recent global financial and economic crisis. Overall GDP growth in East Asia has largely resisted the global recession, expanding by 7.1 percent in 2009. Here, continued support from international institutions like the World Bank Group is helpful.
Since its inception, MIGA has issued nearly $2.0 billion in guarantees for more than 90 projects in Asia, with guarantees ranging from less than $200,000 for a project in China to $118 million for an investment in the Philippines.
Commenting from a personal perspective on his role to lead MIGA’s efforts in the Asia-Pacific Region, Lu notes, “I come from Asia, but have been living in the United States for quite a while now. In these intervening years, the region has changed tremendously and has become a growth engine for the rest of the global economy. I’m looking forward to being part of this story.”