21 -May- 2013, Kuwait Foreign Investment Bureau (KFIB) Chief Dr. Meshaal Jaber Al Ahmad Al Sabah met with Ms. Izumi Kobayashi, Executive Vice President of the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group and the accompanied delegation during her visit to the region covering UAE and Kuwait from May 19 -22, 2013. Ms. Kobayashi explained how the issue of political risk insurance is becoming more paramount with rising political uncertainty in the region, and with the persistent ramifications of the financial crisis, which affected both investors risk perceptions and investment flows from major FDI sources like EU countries. She reiterated MIGA’s commitment to MENA region reflected in the announcement in 2011 to mobilize US$ 1 billion in FDI coming into the region, almost half of which materialized, to establish projects and create jobs for increasing number of young graduates. In this regard, the delegation mentioned that MIGA has launched a special Facility for Conflict Affected and Fragile Economies in April 2013, operated with its reinsurance partners.
Ms. Kobayashi and the accompanied delegation also visited KFIB Investors Service Centre (ISC) and met with KFIB Economic Consultant and the Manager of Investors Services Department to discuss areas of mutual concern. The deliberations tackled issues covering website link exchange, sharing information, cross-promoting services, benefiting from MIGA’s publications (World Investment and Political Risk Report and sector reports). Attention was brought to a new political risk coverage for Non-Honoring of Sovereign Financial Obligation (NHSFO), which is Basel II compliant, that is of particular interest for PPP projects.
MIGA’s political risk insurance covers investors, private equity funds, and banks against losses relating to: Currency inconvertibility & transfer restriction, Expropriation, War, terrorism, & civil disturbance, Breach of contract, and Non-honoring of sovereign financial obligations. Other providers of risk insurance include the Arab Investment & Export Credit Guarantee Corporation (DHAMAN), and the Islamic Corporation for the Insurance of Investment & Export Credit(ICIEC) of the Islamic Development bank Group.