South-South FDI

Over the past few years, the growth of outward FDI from emerging markets has outpaced the growth from industrialized countries. 'South-South' FDI has been growing especially fast. A MIGA survey finds that nearly 90 percent of South-based companies expected their overseas investments to increase over the next five years. More than four-fifths planned to invest in emerging markets over the next year. One obstacle cited is the presence of political risks. The latest issue of MIGA Perspectives, featured in this Spotlight, highlights the trend in South-South FDI and the forces behind it, as well as the political risk perceptions by South-based MNEs as they venture abroad.

South-based providers of political risk insurance have responded in different ways in line with government policy and specific investor needs. The similarities and differences of their approaches are illustrated in the case studies for India and China, as well as the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) in the MENA region and the African Trade Insurance Agency (ATI) in Sub-Saharan Africa.

For more resources on South-South FDI and political risk insurance, visit the PRI-Center – http://www.pri-center.com.