Multilateral Investment Guarantee Agency2013-08-292013-08-292013978-0-8213-9508-0https://hdl.handle.net/10986/15504Global economic growth estimates for 2012 indicate a continuing fragile recovery. The ongoing sovereign debt crisis and recession in the euro zone, curtailed bank lending and domestic deleveraging, fluctuating but elevated commodity prices, and the ongoing political turmoil in the Middle East and North Africa have slowed the initial rebound that followed the 2008 global financial crisis. This slow progress has had an impact on developing countries, which initially fared well in terms of rebounding growth rates, private capital flows, and foreign direct investment (FDI). This report examines investors' perceptions and risk-mitigation strategies as they navigate today's uncertain economic waters. It finds that investors continue to rank political risk as a key obstacle to investing in developing countries and are increasingly turning toward Political Risk Insurance (PRI) as a risk-mitigation tool. The insurance industry has responded with new products and innovative ways to use existing products as well as substantial capacity to meet the growing demand.en-USCC BY 3.0 IGOaccess to capitalaccess to capital marketsaccess to financingaccountingadvanced economiesbalance of paymentbank lendingbanking crisesbanking sectorbondbond issuancebond spreadsbrokersbusiness riskbusiness riskscapital constraintscapital flowCapital Flowscapital requirementsCentral Bankclaim paymentscommoditycommodity pricescommunication technologiesConfidence Indexconsumer basecontract renegotiationsconvertibility restrictionscorporate investmentcorporate investorscountry debtcountry debt crisisCredit defaultCredit default swapsCredit RatingCredit Riskcurrencydebt burdensdebt contractsdebt crisisdebt financingdebt flowsdebt investmentdebt levelsdebt obligationsDebt Securitiesdebtsdefault riskderegulationDeveloping Countriesdeveloping countrydeveloping economiesdivestmentdomestic marketdomestic marketseconomic criseseconomic developmentsemerging marketsequitiesequity contractsequity financingequity investmentequity investmentsexpenditureExpendituresexportersExposureExpropriationExpropriationsexternal debtfinancial crisisFinancial Flowsfinancial institutionsfinancial marketsfinancial returnsfinancial sectorfinancial servicesfiscal deficitflow of investmentfood pricesforeign assetsforeign capitalforeign direct investmentforeign firmsForeign Investmentforeign investmentsforeign investorForeign Investorsglobal capitalglobal capital flowGlobal Economic Prospectsglobal economygovernment actionsGovernment debtgovernment guaranteesgovernment involvementgovernment regulationGross domestic productgrowth rateshost countryhost governmenthost governmentsincomeincome inequalitiesinflationinfrastructure projectsInsuranceinsurance companiesInsurance Industryinsurance marketinsurersinterest rateinterest ratesInternational Bankinternational businessinternational capitalinternational capital marketsInternational InvestmentinventoryInvestinginvestment climateinvestment climatesinvestment decisioninvestment decisionsinvestment disputesinvestment flowsinvestment incentivesinvestment opportunitiesinvestment patternsInvestment Plansinvestment policyInvestment Positionsinvestment projectsinvestment promotioninvestment restrictionsinvestor confidenceInvestor perceptionsIssuancejoint venturejoint venturesjurisdictionsliabilityliberalizationliquidityliquidity problemslocal economylocal investorsLow-income economiesmacroeconomic datamacroeconomic environmentMacroeconomic instabilitymacroeconomic stabilitymarket conditionsmarket developmentsmarket sizeMarkets databaseMonetary FundMultilateral Investment Guarantee Agencynatural disastersnatural resourcenatural resourcesNet debtnew marketsnew productnew productsofferingsoil pricesoutstanding debtpolitical regimepolitical regimesPOLITICAL RISKPolitical Risk InsurancePolitical Riskspolitical stabilitypolitical systemsPolitical Turmoilpolitical uncertaintypolitical upheavalportfolioportfolio investmentportfolio investment flowsPrivate bondPrivate CapitalPrivate Capital FlowsPrivate debtPrivate MarketPublic debtpublic financesPublic PolicyPublic utilitiesrapid growthregulatory frameworkregulatory requirementsremittancesreputationreturnreturnsRisk Managementrisk of expropriationrisk of expropriationsrisk profileSolvencySovereign DebtSovereign Debt RestructuringSovereign DefaultSovereign DefaultsSovereign RiskstocksSuretyTerrorismtransparencyturnoverurbanizationvolatile capitalworld economyWorld Bank10.1596/978-0-8213-9508-0