Business Risks and Strategic Planning
Macroeconomic factors and FMO’s unique environment significantly affect the realization of our strategic objectives. In 2012 the recovery of the world economy was set back. One of the reasons for this was the continuing debt crisis in the Eurozone at the beginning of 2012. The investment climate in developing economies, on the other hand, was satisfactory. Nevertheless, economic activity did slow down somewhat, as a result of policy tightening, weaker demand or other specific factors.
FMO was satisfied to have met most of its targets for the 2012 strategic agenda. With the exception of mobilizing funds, which remained slightly behind target, all the financial performance and development impact goals were realized. Other successful initiatives were the establishment of a Joint Office in South Africa with our partner DEG and the finalization of our 2013-2016 strategy.
In this new strategy we defined an ambitious goal: to double our impact and halve our footprint by 2020. The first step in this journey is defining meaningful quantitative indicators for measurement, reporting and management of impact and footprint aspects. This step was taken by the SHIFT project group in 2012, and will continue until mid-2013. In 2013 we will also conduct a baseline measurement of our impact and footprint indicators. These will be critical for the successful implementation of our new strategy.
In the coming year we intend to further develop Investment Management activities for third parties and increasingly catalyze debt and equity finance. We strive to intensify relations with Dutch businesses that invest in FMO’s markets, as well as with knowledge institutes and NGOs that are relevant to our business. We will increase our overall exposure, especially in our Energy and Agribusiness, Food & Water focus sectors.
The 2013 outlook for capital flows to emerging markets has slightly improved, but mainly for short term finance. Capital restrictions and economic uncertainty will see many western commercial banks steering clear of exposure in developing countries. FMO will keep a close watch on scenarios that can have a significant impact on business opportunities.