MIGAMULTI-LATERAL

INVESTMENT GUARANTEE AGENCY

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MISSION:To promote FDI in developing countries to help support economic growth, decreasing poverty & improve people’s lives.

Developed countries MIGA

INVESTMENT Developing

countries

Sustained development

New markets

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Inception: 1988

Izumi KobayashiExecutive Vice President

James P. BONDChief Operating Officer

Edith P. QUINTRELLDirectorOperations Group

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Frank J. LYSYChief EconomistDirector, Economics and Policy Group

Peter D. CLEARYDirector and General Counsel

Kevin W. LUDirector and Chief Financial Officer

Marcus S. D. WILLIAMSAdviser, Strategy and Operations

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Functions of MIGA

• Issues GUARANTEES, including coinsurance & reinsurance against non-commercial risks in respect of investments in a member country which flows from other member country.

• Carry out complimentary activities to promote the flow of investments to & among developing member countries.

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Guarantee provided by MIGA covers losses due to:

• Currency transfer restrictions.

• Expropriation.

• War & civil disturbances.

• Breach of contract.

• Non-honoring of sovereign financial obligation.

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MIGA’s insurance also benefits by:

• Deterring harmful actions.

• Resolving disputes.

• Accessing funding.

• Decreasing borrowing cost.

• Increasing tenors.

• Providing extensive country knowledge.

• Providing environmental & social expertise.8

Till now MIGA has:

issued 952 guarantees

worth USD 20.9 B

in 100 developing countries.

Updated Sept, 2009

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Deterrents to FDI

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•Investment environment

•Perceptions of political risks.

Role of MIGA

3 key services:1.Political risk insurance

2.Technical assistance

3.Dispute mediation

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MIGA focuses on:

• Infrastructure development

• Frontier markets (high risk &/or low income

countries like African countries).

• Investment in conflict affected areas.

• South-South investments (investments

between developing countries).

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Added value

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•Confidence

•Security

•Credibility

MIGA member countries

(175)

Industrialized countries Developing countries (25) (150)

• Africa (43)• Asia & the Pacific (25)• Middle East & North Africa (16)• Europe & Central Asia (32)• Latin America & Caribbean (34)

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Partnerships

• MIGA works with public & private organizations

to mobilize insurance capacity, co-financial

technical assistance, etc.

• MIGA has signed MoU with 39 partners from 31

countries.

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MIGA has signed MoU with 2 Indian organizations:

1.Export-Import Bank of India - March 1996.

2.Export Credit Guarantee Corporation of India Ltd

(ECGC) - February 2002.

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Independent Evaluation GroupIEG-MIGA

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• Established in July 2002.

• It is organizationally independent from MIGA.

• It evaluates MIGA’s developmental &

operational effectiveness.

• It reports to Committee on Development

effectiveness (CoDE) of MIGA’s Board of

Directors through Director General, Evaluation

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Projects initiated by IndiaFY Guarantee

holderInvestor country

Sector Host country

Gross M$ Status

2009 State Bank of India

India Manufacturing Nigeria 12.83 A

2008 AMCO Fabrics Pvt Ltd

India Manufacturing Democratic republic of

Congo

0.63 N

2007 Rockland Steel trading Pvt Ltd & SBI

India & UK

Manufacturing Nigeria 11.40 A

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Contd..2005 ICICI, SBI &

Manaksia LtdIndia & UK Manufacturing Nigeria 6.98 A

1999 Avon Cycles Ltd

India Manufacturing Tanzania 0.71 N

1999 Beekay Engg & Castings Ltd

India Manufacturing Zambia 1.80 N

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Project status: A-Active, N-Not Active

Impugn over MIGA

“MIGA has the worst environmental and public disclosure policies of any World Bank lending agency.”

“It’s more interested in helping multinational corporations than advancing development.”

By: Carol Welch, deputy director of intl programs at Friends of the Earth (FOE) & Urgewald, a German non-governmental organization (NGO) and Italy’s Campaign for the Reform of the World Bank. And, The US-based Charles Stewart Mott Foundation.

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MIGA under attack

• MIGA guarantees corporate investments in mines in Indonesia, Peru and elsewhere that are “environmentally damaging and developmentally dubious”.

• MIGA’s guarantees mirror existing trends in FDI rather than “catalyzing FDI for positive purposes into the regions and countries that need it the most.”

• Of MIGA’s portfolio, nearly 38%, is focused on the financial sector. These are geared towards middle- and upper-income individuals rather than the poor, and benefit large banks such as Citigroup.

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Contd..

• “MIGA has no screening process to ensure that its investments do not benefit corporations that have track records of harming the environment and human rights.”

• MIGA operates on the facile assumption that any economic growth, regardless of its distribution, will help the poor. It pays almost no attention to who actually benefits from the profits that they claim to generate.

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Dubious Projects

• Insured a $24 million investment by Coca-Cola in Bosnia-Herzegovina to modernize a bottling plant.

“Coke certainly has the capacity to go to private insurers instead.”

• Insurance provided to Freeport McMoRan of New Orleans, USA, for the copper and gold mine on the western half of the island of New Guinea in the South Pacific, (Irian Jaya, Indonesia), that dumps 120,000 tons of toxic mining waste into the local rivers in New Guinea which has killed over 30 sq kms of lowland forest.

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Contd..

• Omai gold mine in Guyana, located some 160 kilometers from the north-eastern Atlantic coast of South America, which had a major failure of its tailings system two years ago causing some 3.2 billion liters of cyanide-laced waste to flow into a tributary of the Essequibo River, the main water source in the country, over a period of five days.

• MIGA supports Domino's Pizza in South Africa and cable television in Brazil. They invest in breweries in Romania, Russia, Tanzania and the Czech Republic, expensive private schools in Pakistan and Uganda, and luxury hotels in Egypt, the Maldives, Vanuatu, Costa Rica and Mexico.

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Contd..• In the past five years MIGA has extended more than USD

220 million in political risk insurance to support Citibank's global expansion.

• ExxonMobil, Multinational oil companies like Elf of France and British Petroleum (BP) received more than USD 150 million.

• USD 60 million went to Coca Cola and Pepsi Cola.• More than USD 13 million to Radisson and Marriott

luxury hotels in Costa Rica.• USD 8 million for Kimberly-Klark in China.

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REFERENCES

• http://www.miga.org/• http://www.microfinancefocus.com/news/

2009/08/21/miga-explores-potential-in-uzbekistan-georgia/

• http://www.whirledbank.org/ifc_miga.html• http://en.wikipedia.org/wiki/

Multilateral_Investment_Guarantee_Agency• http://www.cao-ombudsman.org/cases/

case_detail.aspx?id=113

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