Cheaper energy at lower risks in LDCs

Capital-thirsty developing countries need to reduce non-commercial risks in order to attract more private foreign investment. The World Bank sponsored Multilateral Investment Guarantee Agency (MIGA) can ensure direct investments in developing countries. By subscribing to MIGA's Convention developing countries would adhere to international arbitration of commercial disputes and thus increase their leverage to attract foreign investment. MIGA would also enhance South-South cooperation and provide a better legal framework to encourage cooperation between developing countries themselves. Lack of effective conflict resolution frequently hampers development of boundary energy resources or the pooling of resources only useful at a regional but not national scale. (Author)