World Investment and Political Risk 2010
World Investment and Political Risk 2010 offers a snapshot of political risk perceptions of the largest multinational enterprises and perspectives of the political risk insurance industry. This year, the report also focuses on the role that political risk perceptions play in influencing investment into conflict-affected and fragile economies.
World Investment Trends: Outlook and Corporate Perspectives
The world economy is emerging from a severe economic downturn, which has taken its toll on private capital flows. Showing resilience during the initial phase of the global financial crisis, FDI flows to developing countries then dropped by 40 percent in 2009, similar to the trend observed in developed countries. Yet, FDI continues to be the largest source of international private capital in the developing world, though a small number of countries absorb the bulk of such investment.
Investment and Political Risk in Conflict-Affected and Fragile Economies
Fragile countries and those prone to conflict present unique challenges, caused not only by risks of political violence, but also by structural and institutional weaknesses. As a result, the volume and composition of FDI to these countries is different from patterns in developing countries in general. The econometric analysis presented in this chapter explains how.
The Political Risk Insurance Industry
The industry has weathered the global crisis well. Premium revenues increased in 2009, claims remained modest, and capacity was more than adequate to cover existing demand. Having declined in 2009, new business is picking up again in 2010, partly reflecting the expected recovery of FDI flows. The industry expects these positive trends to accelerate over the next few years.