MIGA was created in 1988 to provide risk-balancing insurance services to foreign direct investmentThis category refers to international investment in which the investor obtains a lasting interest in an enterprise in another country. Most concretely, it may take the form of buying or constructing a factory in a foreign country or adding improvements to such a facility, in the form of property, plants or equipment. projects in developing countries. The typical service offered by MIGA is political risk insurance, which insulates investors against government expropriations, consequences of conflict, terrorism, and similar threats. This allows both investors and lenders to undertake commitments to such projects without the overwhelming downside risk that would otherwise exist. It also enables developing countries to attract and maintain private investment in their countries, which is essential to sustained development.

Membership in MIGA is offered to all member countries of the World Bank Group and currently numbers 175 countries. MIGA is operated by a Council of Governors, who recently voted to double the agency’s capital stock from the current $1 billion, to $2 billion. A small amount of that ($150 million) came in the form of limited financial assistance from the World Bank, and the remaining $850 million increase was due to a capital increase.

Since it was established in 1988, MIGA has insured more than $20.9 billion of foreign direct investmentThis category refers to international investment in which the investor obtains a lasting interest in an enterprise in another country. Most concretely, it may take the form of buying or constructing a factory in a foreign country or adding improvements to such a facility, in the form of property, plants or equipment. in over 100 developing countries-investment that may not have otherwise happened. The result of all of MIGA’s activities is that, with the potential reduction of risks through insurance, developing countries are encouraged to adopt policies that promote investment. This combination of reform at the domestic level and insurance coverage for investors is another important tool in the drive to reduce poverty by the World Bank Group.

Examples of MIGA projects include the following:

• In Azerbaijan, MIGAs provided insurance to protect Turkish investors in a project to expand and modernize a flourmill to produce and distribute flour sold in Azerbaijan and Georgia.¹²
• In Ecuador, MIGA is supporting investors in the construction of a new airport to serve the capital of Quito to improve and expand economic development and trade.¹³
  

12 http://www.miga.org/regions/index_sv.cfm?stid=1533&country_id=17&hcountrycode=AZ
13 http://www.miga.org/regions/index_sv.cfm?stid=1531&country_id=61&hcountrycode=EC

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