MIGA Steps Up Support for Emerging Economies amid Food and Financial Crisis
WASHINGTON, DC, October 7, 2008—The Multilateral Investment Guarantee Agency, MIGA, the political risk insurance arm of the World Bank Group, said today that it issued $2.1 billion in guarantees to underpin developmentally beneficial foreign direct investment in developing countries in the year ending June 30, 2008. (See MIGA's 2008 Annual Report at www.miga.org/2008annualreport.)
This was the largest amount of new guarantee coverage issued in MIGA’s history, leading to an active portfolio of over $6.4 billion at the close of the year. MIGA achieved these results at a time of financial turmoil in high-income countries and high food and energy prices globally, which have had devastating effects on the lives of poor people.
MIGA’s results contribute to the World Bank Group’s overall vision to achieve inclusive and sustainable globalization. Its products and services support economic growth, reduce poverty, and improve people’s lives by encouraging foreign direct investment where it is needed most. The agency does this by providing political risk insurance; dispute resolution services; online investor information services; and technical assistance.
“MIGA projects are responding to the need to compensate for low investment levels in the world’s poorest countries, such as Djibouti and the Central African Republic,” said World Bank Group President Robert B. Zoellick.
During the fiscal year, MIGA demonstrated strong performance in its priority areas—the world's poorest countries; conflict-affected countries (often seen by foreign direct investors as too risky for business); complex infrastructure projects; and South-South investment. In 2008, 63 percent of projects supported by MIGA were in IDA-eligible countries, including 38 percent in Africa—home to 30 percent of the world’s poor. MIGA issued over $100 million in guarantees for projects in countries affected by conflict, and continued to ramp up its support for infrastructure projects, which represent 36 percent of guarantees issued this year.
“Developing countries continue to rely on private sector investment and FDI to support economic growth,” said James Bond, Acting Executive Vice President and Chief Operating Officer of MIGA. “But with liquidity drying up, the risk appetites of international investors for projects in emerging economies may be tested. MIGA can play a critical role in helping these economies grow by supporting projects that generate jobs and build essential infrastructure, allowing governments to focus funds on urgent social needs.”
The results bring total guarantee coverage issued since MIGA’s inception in 1988 to $19.5 billion.
For more on MIGA and its fiscal year results, visit www.miga.org.
Mallory Saleson, email@example.com, 202.473.0844