Multilateral Investment Guarantee Agency2012-03-192012-03-192011978-0-8213-8478-7https://hdl.handle.net/10986/2538Political risk remains the top preoccupation for foreign investors operating in developing countries over the next three years, in spite of persistent concerns over the global downturn in the short term. The global economic recession triggered by the financial crisis that has unfolded over the past two years has not spared the developing world. Yet, the fragile and modest recovery now under way is being led by developing countries, which are expected to remain attractive destinations for Foreign Direct Investment (FDI). In light of overt political risk perceptions, the revival of FDI to these destinations calls for continued risk mitigation, including Political Risk Insurance (PRI). In the short term, concerns over the fallout from the financial crisis appear to dominate investors' preoccupations. Yet, FDI projections and surveys conducted for this report suggest that investors are cautiously optimistic about prospects for a global economic recovery led by the developing world. As a result, FDI to developing countries is expected to recover over the medium term. Investors from the primary industries, as well as those based in developing countries, appear particularly bullish in their investment intentions. As concerns over the health of the global economy recede, political risk considerations will return to pre-eminence for investors from both developed and developing countries.CC BY 3.0 IGOACCOUNTINGAFFILIATESAMORTIZATIONARBITRATIONARREARSBANK LENDINGBANKING SYSTEMBANKSBONDBOND ISSUANCEBORROWING POLICYBUSINESS ENVIRONMENTBUSINESS OPPORTUNITIESCAPITAL FLOWSCAPITAL FORMATIONCIVIL WARCIVIL WARSCOINSURANCECOMMODITIESCOMMODITYCOMMODITY PRICESCONFIDENCE INDEXCONSOLIDATIONCONTRACT RENEGOTIATIONSCONVERTIBILITY RESTRICTIONSCOPYRIGHT CLEARANCECOPYRIGHT CLEARANCE CENTERCOUNTRY RISKCREDIT AGENCIESCREDIT AGENCYCREDIT DEFAULTCREDIT DEFAULT SWAPSCROSS-BORDER CAPITALCURRENCYCURRENT PRICESDEBTDEBT DEFAULTDEBT FINANCINGDEBT FLOWSDEFICITSDEPOSITSDEVELOPING COUNTRIESDEVELOPING ECONOMIESDOMESTIC DEBTECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC DOWNTURNECONOMIC PERFORMANCEEMERGING MARKETEMERGING MARKET ECONOMIESEMPLOYMENTEQUITY FLOWSEQUITY INVESTMENTEXCHANGE RATEEXPORT CREDITEXPROPRIATIONEXPROPRIATIONSFINANCIAL CRISISFINANCIAL FLOWSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL SYSTEMFINANCIAL SYSTEMSFOOD PRICESFOREIGN CAPITALFOREIGN CAPITAL FLOWSFOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTORFOREIGN DIRECT INVESTORSFOREIGN FIRMSFOREIGN INVESTMENTFOREIGN INVESTORSFOREIGN OWNERSHIPGLOBAL ECONOMIC PROSPECTSGLOBAL ECONOMYGLOBAL EXPORTSGLOBAL FINANCIAL STABILITYGLOBAL TRADEGOVERNMENT INTERVENTIONGOVERNMENT INTERVENTIONSGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROUP OF INVESTORSGROWTH RATEHOLDINGHOME COUNTRIESHOST COUNTRIESHOST GOVERNMENTHOST GOVERNMENTSHUMAN RESOURCESHUMAN RIGHTSINCOMEINCOMESINFORMATION CONSTRAINTINSTITUTIONAL INVESTORINSURANCEINSURANCE INDUSTRYINSURANCE MARKETINSURERSINTANGIBLEINTANGIBLE ASSETSINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL BANKINGINTERNATIONAL CAPITALINTERNATIONAL CAPITAL FLOWSINTERNATIONAL DEBTINTERNATIONAL DEBT MARKETSINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCEINTERNATIONAL INVESTMENTINTERNATIONAL INVESTMENT AGREEMENTSINTERNATIONAL MARKETSINVENTORYINVESTINGINVESTMENT CORPORATIONINVESTMENT DECISIONSINVESTMENT DISPUTESINVESTMENT FLOWINVESTMENT FLOWSINVESTMENT INSURANCEINVESTMENT LOCATION DECISIONSINVESTMENT OPPORTUNITIESINVESTMENT PLANSINVESTOR BEHAVIORINVESTOR INTERESTSINVESTOR PERCEPTIONSINVESTOR PREFERENCEJOINT VENTUREJOINT VENTURESLARGE-SCALE INVESTMENTSLAWSLEVEL OF RISKLIABILITYLIBERALIZATIONLOCAL CURRENCIESLOCAL ECONOMIESLOCAL ENTERPRISESLOCAL GOVERNMENTSLONG-TERM INVESTMENTLOW-INCOME COUNTRIESMACROECONOMIC DATAMACROECONOMIC INSTABILITYMANDATESMARKET CONFIDENCEMARKET ECONOMIESMARKET FAILUREMARKET SIZEMIDDLE-INCOME COUNTRIESMONETARY FUNDMULTILATERAL INVESTMENT GUARANTEE AGENCYNATURAL RESOURCENATURAL RESOURCESNET DEBTNEW MARKETSOUTPUTOWNERSHIP STRUCTUREPOLITICAL RISKPOLITICAL RISK INSURANCEPOLITICAL RISKSPOLITICAL STABILITYPORTFOLIOPORTFOLIO INVESTMENTPORTFOLIO INVESTMENT FLOWSPOVERTY ALLEVIATIONPRIVATE CAPITALPRIVATE CAPITAL FLOWSPRIVATE CREDITORSPRIVATE DEBTPRIVATE DEBT FLOWSPRIVATE INVESTMENTPRIVATE MARKETPRODUCTIVITYPROFITABILITYPUBLIC DEBTPUBLIC FINANCEPUBLIC UTILITIESRATES OF RETURNRECAPITALIZATIONRED TAPEREGULATORY ENVIRONMENTREGULATORY FRAMEWORKSREINSURANCEREMITTANCESRETURNRETURNSRISK MANAGEMENTRISK MITIGATIONSECURITY CONCERNSSETTLEMENTSOCIAL SERVICESSOVEREIGN GUARANTEESSTATE INTERVENTIONSTATISTICAL ANALYSISSUBSIDIARYTECHNOLOGY TRANSFERTELECOMMUNICATIONSTERRORISMTRANSITION COUNTRIESTRANSPARENCYTREATIESTREATYUNEMPLOYMENT RATESVIRTUOUS CYCLEWORLD ECONOMYWorld Bank10.1596/978-0-8213-8478-7