Washington, DC, November 7, 2006 —The World Bank Group today added a powerful new Internet tool to its development arsenal—the Political Risk Insurance Center—a first-of-its-kind web service that responds to a growing demand for information on mitigating the political or noncommercial risks associated with investing in developing countries. Also making its debut is FDI.net, a complementary web portal that offers on-demand country analysis and information on all things related to foreign direct investment in 175 countries. The services are being provided by the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group.
Foreign direct investment (FDI) in emerging economies—a key driver of economic growth—is often inhibited by a lack of information about investment conditions and opportunities, and by concerns about political risks. And most flows go to just a handful of these countries, leaving the world’s poorest economies largely ignored.
“MIGA is uniquely positioned to address this challenge, particularly when it comes to getting investment into the ‘riskier’ markets,” says Yukiko Omura, Executive Vice President of MIGA. “As a development agency, our goal is to encourage FDI flows into the countries that need it most, and one of the first steps is to make sure investors know about investment opportunities in developing countries.”
FDI is on the rise once again, with flows to developing countries reaching $238 billion in 2005. But not all countries are winners, and flows are expected to decrease in the coming years, according to some projections. “This makes it even more imperative for us to encourage foreign investors to venture into less developed markets,” says Omura.
Over the past 10 years, MIGA has developed a suite of award-winning online services, providing some 75,000 users with information on investment in developing countries. FDI.net consolidates these services into one portal—www.fdi.net—offering information on specific investment opportunities; business and legal environments; up-to-the-minute feeds on news and events; links to investment promotion agencies and location consultants; quick-search by sector and/or country; case studies; sources of investment finance, and more.
“FDI.net is like no other web service out there,” says Omura. “The site is investor-focused in a unique way, combining business and public resources with World Bank Group analysis to provide users with a single entry point for the full-spectrum of information needed to make a decision about investing in a foreign country. And the service is free.”
Complementing FDI.net is the Political Risk Insurance Center (www.pri-center.com). PRI-Center is conceived as a one-stop portal on political risk insurance, providing investors with the latest intelligence and information on the mitigation of noncommercial risks.
“Political risk mitigation is an important part of any business strategy to protect against potential losses, particularly for investments in emerging markets,” says Stephan Dreyhaupt, Manager of Online Investor Services in MIGA. “And with political risks on the rise in certain regions of the world, it’s very important for investors and lenders to know where to get reliable information and resources, and to learn how to mitigate such risks.”
The PRI-Center provides information on the insurance market, featuring political risk analysis and ratings for 160 countries, research, tools, directories, news, and events. The site builds on the knowledge and expertise of the public and private PRI community.
This site has something for everyone looking to balance investment risks, ranging from companies in developed and developing countries—which are a growing force in the global FDI marketplace—to small and medium-size enterprises—which may not have the risk management resources available to larger companies.
Content partnerships are an essential component of both web portals, ensuring the timeliness and accuracy of information.
“The bottom line is that both FDI.net and PRI-Center can reduce the transaction-related costs associated with searching for reliable and timely investment information,” says Dreyhaupt, “an important consideration for a developing country competing for scarce FDI.”
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment into emerging economies to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders, covering risks including expropriation, breach of contract, currency transfer restriction, and war and civil disturbance. The agency places a special focus on supporting investments in IDA-eligible, conflict-affected, and sub-Saharan African countries, as well as infrastructure and investments between developing countries. MIGA also provides dispute mediation services to its clients, and offers technical assistance to its member countries. Since its inception, MIGA has issued close to 850 guarantees for projects in 95 developing countries, totaling more than $16 billion in coverage. MIGA’s gross exposure stands at $5.3 billion.