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The Multilateral Investment Guarantee Agency (MIGA) is an arm of the World Bank established in 1988 to provide political risk insurance to private corporations and banks investing in developing countries. Rather than supporting the World Bank s mission to alleviate poverty by promoting growth and creating jobs, MIGA instead underwrites the operations of many Fortune 500 companies. An overwhelming percentage of MIGA s investments harm the environment. Green
Scissors Proposal Current Status In 1998, Congress authorized a $30 million contribution toward an international effort to increase MIGA's resources. Congress has since appropriated $19 million, thus leaving $11 million of previously authorized funding. During consideration of the fiscal year 2002 Foreign Operations appropriations bill, Reps. Sherrod Brown (D-Ohio) and Robert Andrews (D-N.J.) successfully offered an amendment shifting all $10 million in proposed funding for MIGA to international health programs. Although the Senate passed a similar amendment, $5 million in funding was restored to MIGA by a House-Senate conference committee. In
addition to the $11 million in "paid-in capital" that
Congress must still appropriate, the U.S. will also be responsible
for $150 million in "callable capital," or reserve
funds that United States taxpayers will provide in case of emergency.
In 1998, Congress appointed a bipartisan commission to look at
the role of International Financial Institutions, including MIGA.
In March 2000, the commission, chaired by economist Alan Meltzer,
released a report recommending that MIGA be eliminated. MIGA uses federal taxpayer dollars to support foreign corporations and banks. An overwhelming portion of MIGA s investment portfolio supports foreign-owned corporations and banks. In fiscal year 2000, MIGA issued 53 guarantees in the amount of $1.6 billion, only one of which supported an American corporation. Moreover, this guarantee was actually reinsurance for a mine in Russia that already receives support from the federally funded Overseas Private Investment Corporation (OPIC). There
is little evidence to show that MIGA actually helps the poor,
which is its mission as part of the World Bank. Rather
than underwriting small-scale investments that would alleviate
poverty, MIGA is used for high-end projects such as soda bottling
plants, luxury hotels and cellular telephone networks -- investments
whose ability to help the poor is dubious at best. More than half of MIGA s portfolio underwrites environmentally destructive sectors such as oil, mining, gas, energy, and transportation. All too often, these projects are in biodiversity-rich areas or other regions with high conservation value. The agency has underwritten environmental disasters around the world, including a mine in Papua New Guinea that dumps toxic waste directly into the ocean, a gas pipeline in Bolivia that is fueling deforestation, and a mine in Guyana that experienced four cyanide spills in one year. Contacts
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