MIGA Report Finds that Sovereign Default and Expropriation Risks Worry Investors

by Sabrina I. Pacifici on December 6, 2012

Multilateral Investment Guarantee Agency: “The World Investment and Political Risk report examines the overall trends in political risk perceptions, foreign investment intentions, and longer-term demand for political risk insurance (PRI), especially in emerging economies. The research conducted for the report includes an Economist Intelligence Unit survey of multinational investors that addresses their risk perceptions for developing countries in the short and medium term. It addresses foreign direct investment (FDI) in the Middle East and North Africa in light of the Arab Spring, as well as the reaction of multinational enterprises to those developments. The 2012 edition of the report looks at the risk of sovereign defaults, typically caused by adverse economic shocks, and how it relates to expropriation. Both the risks of sovereign default and expropriation remain significant issues for foreign investors amid the global economic slowdown and continued political instability.”

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