Miga Articles of Agreement

MIGA Articles of Agreement: A Comprehensive Overview

The Multilateral Investment Guarantee Agency, or MIGA, was established in 1988 as a member of the World Bank Group. Its primary function is to provide political risk insurance and other risk mitigation services to foreign investors in developing countries. The agency`s Articles of Agreement outline the purposes, functions, and operations of MIGA. In this article, we will provide a comprehensive overview of the MIGA Articles of Agreement.

Purpose of MIGA

According to Article 1 of MIGA`s Articles of Agreement, the primary purpose of the agency is to promote and facilitate foreign investment in developing countries to support economic growth and development. The agency aims to increase the flow of private capital to these countries by providing guarantees against non-commercial risks, such as expropriation, war, and civil disturbance.

Functions of MIGA

MIGA`s Articles of Agreement outline the agency`s functions in detail. These include:

1. Guaranteeing investors against non-commercial risks: MIGA provides guarantees to investors against risks that are beyond their control, such as political violence, currency transfer restrictions, and breach of contract by the host government.

2. Providing advisory services: MIGA offers advisory services to its member countries and investors in areas such as investment promotion, policy reform, and dispute resolution.

3. Mobilizing capital: MIGA mobilizes private capital by providing guarantees to investors, thereby reducing their perceived risks of investing in developing countries.

4. Facilitating co-investment: MIGA facilitates co-investment by bringing together foreign and domestic investors in developing countries.

Operations of MIGA

MIGA`s Articles of Agreement also outline the agency`s operations. These include:

1. Membership: MIGA`s membership is open to all member countries of the World Bank Group. As of 2021, MIGA has 183 member countries.

2. Capital: MIGA`s capital comes from its member countries. As of 2021, MIGA has authorized capital of $7.5 billion.

3. Guarantees: MIGA can provide various types of guarantees to investors, including political risk insurance, credit enhancement, and contract performance guarantees.

4. Premiums: MIGA charges premiums to investors based on the level of risk associated with the investment.

Conclusion

The MIGA Articles of Agreement form the basis of the agency`s operations. The agency`s primary purpose is to promote and facilitate foreign investment in developing countries to support economic growth and development. MIGA achieves this by providing guarantees to investors against non-commercial risks, mobilizing private capital, providing advisory services, and facilitating co-investment. As a member of the World Bank Group, MIGA plays a crucial role in promoting sustainable development and poverty reduction in developing countries.