Fiscal Year 1996: MIGA Posts Record Growth
Fiscal Year 1996: MIGA Posts Record Growth
Washington, D.C., September 19, 1996 — The Multilateral Investment Guarantee Agency (MIGA) today released its Annual Report 1996 [embargoed for a.m. newspapers Tuesday, September 24, 1996].
In releasing the results of the Multilateral Investment Guarantee Agency for the fiscal year ending June 30, 1996, Management is pleased to report the following milestones:
1) Guarantees
MIGA's aoutstanding portfolio has more than doubled in the past two years, from US$1 billion at the end of FY94 to about US$2.3 billion in coverage in FY96. MIGA has now issued a total of 223 contracts in its seven-year operational history.
FY96 marked record growth in MIGA's investment guarantee business. The Agency issued 68 investment guarantee contracts for US$862 million in new coverage, compared to 54 contracts for US$672 million in FY95. MIGA-insured projects in FY96 also exceeded FY95 totals in the amount of foreign investment facilitated (US$6.6 billion versus US$2.5 billion). In FY96 MIGA assisted private firms from 17 different countries in making investments in 27 host developing countries.
MIGA insurance in FY96 covered investments in a broad range of countries and sectors; MIGA's portfolio now encompasses investments in 40 developing countries. Investment guarantees were issued for the first time in Kuwait, Kyrgyz Republic, Mali, Nepal, and Papua New Guinea. Significant amounts of coverage were issued in the infrastructure sector, especially for power and telecommunications projects.
2) Technical Assistance
a) Investment Marketing Services
MIGA provides technical assistance to help developing countries and transitional economies in their efforts to attract foreign direct investment. In addition to supporting traditional forms of investment promotion, such as conferences and missions, MIGA is pioneering the use of new marketing and communications technologies as vehicles for the dissemination of information on investment opportunities in emerging markets. In FY96, MIGA formally launched its Investment Promotion Agency Electronic Network (IPAnet), an on-line, marketing, communications, and information network that links private investors with investment intermediaries and technology providers worldwide. More than 1,600 registrants from firms and organizations in over 100 countries currently use IPAnet. The service is free of charge, but requires registration. (IPAnet can be accessed at: http://www.ipanet.net.)
MIGA also continued to support traditional forms of investment promotion in FY96. The Agency organized two major investment promotion conferences, which focused on the mining sector in Africa and Central Asia, respectively. MIGA also continued to promote investment between developing countries, organizing a symposium in Malaysia to promote increased flow of "South-South" investment between Asia and Africa, Latin America, the Middle East, and Eastern Europe.
b) Legal Assistance
MIGA assists countries in the mediation of disputes. MIGA was asked to use its good offices to support the delimitation of maritime boundaries among four member states in the Gulf of Guinea, and the Agency is currently mediating a number of investment disputes in other regions.
3) Financial Performance
The Agency's net income for FY96 rose by 61 percent, to US$20.7 million before provisioning against future claims. Subscribed capital from the 134 member countries is now almost US$1.1 billion, and the Agency's reserve position is improving steadily. MIGA has not suffered a claims loss to date.
4) Membership
MIGA membership increased to 134 countries with the addition of six countries (Algeria, Armenia, Colombia, Guinea, Sierra Leone, and the Republic of Yemen). Signatory countries to the MIGA Convention totaled 155 (new signatory countries are Chad, Eritrea, and Qatar). An additional 21 developing countries were in the process of fulfilling membership requirements.