Republic of - Waipa

AlessandroTeixeiraPresident, WorldAssociation ofInvestment PromotionAgencies (WAIPA)Chairman, BrazilianTrade and InvestmentPromotion Agency(Apex-Brasil)Executive Secretary,Deputy Minister,Ministry ofDevelopment, Industryand Foreign Tradeof the FederativeRepublic of BrazilDear WAIPAMembers and colleagues,The world economy entered anew era , with implications forinvestments worldwide. Thestill unfolding sovereign debtproblems, and the subprimecrisis that preceded them,stand to change the wayinvestors now look at assets.While portfolio decisions willrequire more diligence from theinvesting public, investmentdecions will likely now takemore independent stances.What constitutes creditworthinesswill be consideredin a different light. Just asratings of mortgage-backedsecurities were proven overgenerous, sovereign debtratings are now the object ofdispute. As over zeal mighthave recently taken hold, oldbiases may also have beenrevealed. What once seemedsafe and sound, may now callfor second thoughts. Countryrisk may no longer be regardedas it once was.Reconsidering risk applies notonly to portfolio investments. Itequally applies to decisions asto where to direct FDI (foreigndirect investment). As corporateinvestors rethink “risk”, and aseconomic activity picks up, amore open-mind set may begindirecting investments waybeyond the BRICs.Caution is understandablyalways needed, but, if we havelessons to learn from the twincrisis in mature markets, oneis that high growth economiesmay be well worth the “risk”.For national governments,the implications may be toWAIPA Annual Report 2010 7