International Political Risk Management: Exploring New Frontiers (Working Papers Series on Contemporary Challenges for Investors, Lenders, and Insurers)

Printed on Demand. Limited stock is held for this title. If you would like to order 30 copies or more please contact books@worldbank.org This work brings together the assessments and experiences of leading academics and practitioners from the international investor, lender and insurance communities. It examines the transformations in the political risk insurance market in the 1990s, resulting from changes in the broader insurance industry and from the rapid and complex expansion of foreign direct investment into emerging markets. It also analyzes some of the current supply and demand challenges in the political risk insurance marketplace in the wake of the financial crises of the late 1990s. The authors explore future directions in political risk management with regard to many of the most difficult issues: breach of contract coverage for firms with large fixed investments in sectors such as infrastructure and natural resources; securitization of political risk exposure; pricing and capacity in the political risk insurance industry; multiple pledge of shares between investors and lenders; and cooperation among private and public insurers. This book is a collection of papers stemming from a symposium on International Political Risk Management held in April 2000, under the joint auspices of the Multilateral Investment Guarantee Agency (MIGA) and the Karl F. Landegger Program in International Business Diplomacy at the School of Foreign Service, Georgetown University. World Bank Publications Contents 6 Preface 9 Introduction 12 Part One: The Multiple Pledge-of-Shares Problem 16 Overview 16 The Multiple Pledge-of-Shares Problem: Report of a Little Progress 20 Comments 25 Part Two: Preferred Creditor Status 34 Overview 34 Preferred Creditor Status: Husbanding a Valuable Asset 38 Comments 46 Part Three: Breach of Contract Coverage 52 Overview 52 Breach of Contract Coverage in Infrastructure Projects: Can Investors Afford to Wait for Arbitration? 56 OPIC Modified Expropriation Coverage Case Study: MidAmerican’s Projects in Indonesia—Dieng and Patuha 69 Comment 80 Part Four: Securitizing Political Risk Insurance 84 Overview 84 Securitizing Political Risk Insurance: Lessons from Past Securitizations 88 Comments 159 Part Five: Cooperation, Competition, and the “Science of Pricing” in the Political Risk Insurance Marketplace 176 Overview 176 Cooperation, Competition, and the “Science of Pricing” in the Political Risk Insurance Marketplace 181 Comments 191 Appendixes 210 I: Biographies of Authors 210 II: “Political Risk Investment Insurance: The Renaissance Revisited” 218 III: Managing International Political Risk (1998) 242 IV: More About MIGA 245 V: Acronyms and Abbreviations 251 ISBN-13:,9780821348345 Contents......Page 6 Preface......Page 9 Introduction......Page 12 Overview......Page 16 The Multiple Pledge-of-Shares Problem: Report of a Little Progress......Page 20 Comments......Page 25 Overview......Page 34 Preferred Creditor Status: Husbanding a Valuable Asset......Page 38 Comments......Page 46 Overview......Page 52 Breach of Contract Coverage in Infrastructure Projects: Can Investors Afford to Wait for Arbitration?......Page 56 OPIC Modified Expropriation Coverage Case Study: MidAmerican’s Projects in Indonesia—Dieng and Patuha......Page 69 Comment......Page 80 Overview......Page 84 Securitizing Political Risk Insurance: Lessons from Past Securitizations......Page 88 Comments......Page 159 Overview......Page 176 Cooperation, Competition, and the “Science of Pricing” in the Political Risk Insurance Marketplace......Page 181 Comments......Page 191 I: Biographies of Authors......Page 210 II: “Political Risk Investment Insurance: The Renaissance Revisited”......Page 218 III: Managing International Political Risk (1998)......Page 242 IV: More About MIGA......Page 245 V: Acronyms and Abbreviations......Page 251 'This Working papers volume originated in a symposium on International Political Risk Management held on April 11, 2000, under the joint auspices of the Multilateral Investment Guarantee Agency of the World Bank Group and the Karl F. Landegger Program in International Business Diplomacy at the School of Foreign Service, Georgetown University'--p. viii.