Development Investment Risk Mitigation new

1
Doing Business in Conflict-Affected Countries
Lisa Curtis 14th July 2009
? DeRisk Advisory Services Ltd.
2
Characteristics of Conflict Affected Countries
Some truisms

• Most things are broken (infrastructure,
  institutions)
• No-one remembers how to run things, let alone fix
  them
• Everything needs fixing before you can fix
  anything else
• The private sector is scared of taking big
  investment risks
• The private sector that survived did so in spite
  of the lack of systems and rules. That has become
  the way we do business around here

? DeRisk Advisory Services Ltd. (FSA Registration
No. 503053) is an Appointed Representative of
Rapprocher Ltd., which is authorized and
regulated by the Financial Services Authority.
Registered in England Wales at 145-157 St.
John Street, London, EC1V4PY. Registration No.
06000654. Advisory Services Ltd.
? DeRisk Advisory Services Ltd.
2
3
Challenges to Doing Business Two Examples
Source World Bank, Doing Business in 2009
? DeRisk Advisory Services Ltd. (FSA Registration
No. 503053) is an Appointed Representative of
Rapprocher Ltd., which is authorized and
regulated by the Financial Services Authority.
3
4
Problems and Solutions
Disincentives to Investment
Perception vs Real Risk

• Discretion in procedures
• Cumbersome administrative processes
• Lack of information
• Shortage of skilled employees

• Uncertainty does not always mean corruption
• Not all conflict-affected countries are the same
• Not all sectors the same
• Investment process can help clarify the rules

• Large informal sector distorts the playing field
• Threatens the rule of law
• Limits competition
• Constrains growth

• Partnering with reform-minded policy-makers to
  support investment climate reforms reduces risk
• Partnering with domestic suppliers to create
  incentives for formalisation

• Understanding the upside
• New business opportunities fast growth esp. in
  domestic and regional markets
• Conditions for investment improving
• Growing portfolio of donor-sponsored initiatives
  to support investment in difficult environments

? DeRisk Advisory Services Ltd. (FSA Registration
No. 503053) is an Appointed Representative of
Rapprocher Ltd., which is authorized and
regulated by the Financial Services Authority.
Registered in England Wales at 145-157 St.
John Street, London, EC1V4PY. Registration No.
06000654. Advisory Services Ltd.
4
5
Self-Help Responsible investing reduces risk
Knowledge is Power Security

• What are the rules know the law better than
  the administrators
• Understand the reformers what do they want to
  achieve? How can investment correct market
  failures?
• Political economy matters what caused the
  conflict? Who benefits from perpetuating
  instability? Who needs to benefit most from a
  peace dividend?

Building a Long-Term Business Case

• Mainstreaming social benefits social
  infrastructure vs charitable works
• Promoting employment growth creating jobs and
  strong businesses in the supply chain has as much
  lasting impact as direct employment

In conflict affected environments aligning the
business case with the development case promotes
stability, reduces risks of disruption,
strengthens the license to operate
? DeRisk Advisory Services Ltd. (FSA Registration
No. 503053) is an Appointed Representative of
Rapprocher Ltd., which is authorized and
regulated by the Financial Services Authority.
Registered in England Wales at 145-157 St.
John Street, London, EC1V4PY. Registration No.
06000654. Advisory Services Ltd.
? DeRisk Advisory Services Ltd.
5
6
Outside help a wide range of facilities to
assist investors
? DeRisk Advisory Services Ltd. (FSA Registration
No. 503053) is an Appointed Representative of
Rapprocher Ltd., which is authorized and
regulated by the Financial Services Authority.
Registered in England Wales at 145-157 St.
John Street, London, EC1V4PY. Registration No.
06000654. Advisory Services Ltd.
? DeRisk Advisory Services Ltd.
6
7
For everything else, theres insurance.
For more information please contact Lisa
Curtis lisa.curtis_at_deriskas.com 44 (0)20 8819
4272
Registered in England Wales at 145-157 St. John
Street, London, EC1V4PY. Registration No.
06000654.
? DeRisk Advisory Services Ltd. (FSA Registration
No. 503053) is an Appointed Representative of
Rapprocher Ltd., which is authorized and
regulated by the Financial Services Authority.
Registered in England Wales at 145-157 St.
John Street, London, EC1V4PY. Registration No.
06000654. Advisory Services Ltd.
? DeRisk Advisory Services Ltd.
7