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HONIARA, Solomon Islands (Solomon Star, Feb. 22) – In a move meant to bolster investor confidence in the country, the Government of Solomon Islands has agreed to become a full member of the World Bank’s Multi-lateral Investment Guarantee Agency (MIGA) Convention, which it signed but didn’t fully embrace in 1996.

Solomons Prime Minister Allan Kemakeza announced the decision yesterday following Cabinet’s endorsement last week.

Full membership of MIGA will cost Solomon Islands about US$541,000 - 10 per cent of which would be paid upon signing the instrument of ratification of the MIGA Convention.

Prime Minister Kemakeza said this is a small investment compared with the benefits Solomon Islands stand to get from its membership.

Kemakeza said MIGA is an agency of the World Bank, which, among other things promotes direct foreign investment in developing countries through its guarantees, technical assistance and legal services.

"Until now,Solomon Islands was a non member signatory of MIGA because we have not ratified the MIGA Convention," Kemakeza said. "This meant that as a nation, we have been missing out on the many benefits that MIGA provides to its members, particularly in the area of promoting and underwriting insurance cover for foreign investments in developing countries.

"Now that Solomon Islands has agreed to ratify the MIGA Convention, it is my hope that potential investors would look at Solomon Islands with full confidence because of the measure my Government has taken."

Kemakeza said no investor should look at Solomon Islands with questions of insurance coverage on his mind because the measure the government has taken, coupled with the return of law and order under the auspices of the Regional Assistance Mission to Solomon Islands (RAMSI) is more than sufficient to provide peace of mind for genuine investors.

"I therefore invite investors to come to Solomon Islands and be part of the resurgence of economic activities in this country," the Prime Minister said.

The Prime Minister said since MIGA came into operation it has issued more than 650 guarantees for projects in 85 developing countries.

"The agency mobilizes additional coverage through its Cooperative Underwriting Program (CUP), encouraging private sector insurers into transactions they would not have otherwise undertaken and helping the Agency serve more clients," he said.

"More than recently MIGA is an important catalyst and plays an important role in encouraging Foreign Direct Investment (FDI) into conflicted affected countries since the perception of political risk is usually very high and risk mitigation capacity is quite limited.

In the 2004 fiscal year MIGA supported 16 new projects in conflict affected countries.

February 23, 2005

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