Mexico Takes Key Step Toward MIGA Membership
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WASHINGTON, DC, October 22, 2007—Mexico today took an important step closer to full membership in the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group.
Mexican Secretary of Finance Agustín Carstens signed MIGA’s Convention on behalf of the Mexican government at a ceremony on Monday, October 22, at World Bank headquarters in Washington, DC. He was joined by World Bank Group President Robert B. Zoellick, MIGA Executive Vice President, Yukiko Omura, Pamela Cox, World Bank Vice President for Latin America and the Caribbean, and Jorge Familiar, World Bank Executive Director.
To complete the membership process, Mexico must pass legislation to legalize the membership, as well as make its required capital contribution to the agency.
Membership in MIGA will allow investors from Mexico to receive political risk insurance (guarantees) for eligible investments into other developing member countries. Eligible foreign companies seeking to invest in Mexico may also receive MIGA guarantees. MIGA’s coverage protects investments against the risks of transfer restriction, expropriation, breach of contract, and war and civil disturbance (including terrorism).
“This association will contribute to Mexico’s efforts to promote economic growth, by increasing foreign investors’ confidence in our country,” said Secretary Carstens. “In this way, more resources will be available for the generation of employment opportunities, poverty reduction, productivity and competitiveness enhancement, all of which will result in better living standards for Mexican families.”
In 2006, foreign direct investment (FDI) into Mexico surpassed $19 billion, according to UNCTAD, while outward flows reached $5.8 billion. The 2007 World Investment Report ranks Mexico 49th out of 141 economies in terms of outward FDI performance, and the top FDI recipient in Latin America and the Caribbean.
“We welcome Mexico into MIGA,” said Omura. “Mexico is a regional leader in outward FDI and is increasing its global reach. We are eager to support the role of Mexican investors in the economic development of other developing countries. ‘South-South’ investment—an increasing source of FDI into other developing countries—is a strategic focus for MIGA.”
Omura added that investors are also expressing interest in MIGA’s support for investments into Mexico, particularly infrastructure projects, which typically are accompanied by a unique set of risks at the municipal (or subsovereign) level.