UNCTAD - WAIPA Investment Conference
In conjunction with the 1st Session of the Investment, Enterprise and
Development Commission
Palais des Nations
Geneva, Switzerland
4-7 May 2009
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The programme
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Overview
The UNCTAD/WAIPA Investment Conference 2009 was held on the occasion of
UNCTAD's 1st Session of the Investment, Enterprise and Development Commission
(4-8 May 2009). It brought together 150 participants from 20 ministries, 30
investment promotion agencies (IPAs), 30 national and international organizations, as
well as various private sector companies and think tanks. The Conference focussed on
issues that are pertinent to IPAs in light of the global economic crisis. It featured a
High-level Session on Best Practices in Investment Policies, workshops and seminars.
Officials and delegates also participated in discussions on the recently conducted
UNCTAD investment policy reviews of the Dominican Republic and Nigeria.
In his opening address, Dr.
Supachai
Panitchpakdi,
Secretary-General of UNCTAD,
noted that, so far, very little had
been said on the impact of the
crisis on foreign direct investment
(FDI) and that the first session of
the Commission was timely. The
economic environment, despite
the first signs of recovery, was
still highly uncertain. "We need to
highlight to the global community
Opening address by
the implications for investment
Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD
and enterprise development. You
cannot have recovery without
going into new investment, new employment. The financial sector must be cleaned up
and be able to support new rounds of investment" according to the Secretary-General.
With regard to FDI flows, all indicators – including the sharp fall of profits of
enterprises, the limitation of resources and the reduced propensity to invest overseas –
pointed to a far deeper decline in FDI in 2009 as well as a negative impact on the
operations of transnational corporations (TNCs) in developing countries. Despite such
predictions, there were nevertheless some positive forces favourably affecting FDI,
such as the decline of asset prices creating new investment opportunities, the
possibility of larger South–South FDI flows, the opportunities offered by environment
related industries or energy, and increasing demand in some emerging economies.
Overall, the most probable scenario for the future trends of FDI flows was a U-shaped
recovery, with a real positive impact on investment and employment by 2011. Thus,
the right policies would be key.
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High level session on Best Practices in Investment Policies
Experts and delegates reaffirmed the positive contribution that FDI had made and
could make in economic and social growth, including through its positive
employment and balance-of-payments effects, transfer of skills and technology,
competition effects, and productive capacity-building, particularly for emerging
economies. While such positive effects were particularly needed in the current
environment, given the global financial and economic crisis, many expressed concern
and uncertainty regarding the types of policies that would be most conducive to
generating FDI inflows and subsequent development.
In light of the economic crisis and governments’ fiscal stimulus packages, participants
discussed the role of FDI in financing infrastructure projects, specifically those of
roads and electricity. Although there was general agreement on the advantages of
using FDI for this purpose (given shortfalls in domestic credit availability), some
stressed the need to implement policy frameworks for maximizing the development
effects of FDI. Identifying best-fit policies and the proper pacing and sequencing were
considered crucial in this context – an issue raised, amongst others, by LDCs.
Preparing the private sector for long-term public–private partnerships in infrastructure
was also considered important.
A second issue linked to the current crisis related to the recent G-20 commitments to
refrain from raising barriers to international trade and investment. Participants praised
those commitments, along with the monitoring of those commitments by relevant
international organizations, including UNCTAD.
In terms of attracting FDI, participants highlighted the need for effective IPAs,
amongst others, to provide foreign investors with a one-stop shop. Well-executed
investment promotion marketing was seen as a valuable tool with which to improve
perceptions held by foreign investors, or to raise the profile of small developing
economies.
Participants stressed the benefits of adhering to simple and transparent investment
rules for attracting FDI, and shared examples of countries that had shown significant
progress in those areas. For example, some countries reported reducing the time
necessary for certain procedures and improving their score in the World Bank’s
“Doing Business” report.
Administrative capacity and efficiency are crucial for creating an environment that
attracts foreign investment, and many delegates highlighted their countries’
experiences, including in the context of training public officials. Overall, it was
considered important to ensure that efforts to attract FDI would not result in a
competitive “race to the bottom”.
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The participants appreciated UNCTAD’s efforts to help countries improve their
institutional environment to attract FDI and make it work better for development. The
organization's role in helping devise policies to cope with the current situation was
seen as highly critical, and collaboration between UNCTAD and the World
Association of Investment Promotion Agencies (WAIPA) in organizing the session
was cited as a good initiative.
High Level Session Panel
Highlighted by speakers
FDI to finance infrastructure projects demands implementing policy
frameworks to maximize its development effects.
G-20 commitments to refrain from raising barriers to international trade and
investment were praised along with the monitoring of those commitments by
relevant international organizations
Effective one-stop shop services are a must for foreign investment
Well-executed investment promotion marketing is a
valuable tool to improve and raise country profiles, in
particular of small developing economies.
Simple and transparent investment rules for attracting FDI are beneficial.
Efforts to attract FDI should not result in a competitive “race to the bottom”.
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Investment Policy Reviews
5 May 2009, 10h00-18h00
The Conference included meetings on the Investment Policy Reviews (IPR) of
Nigeria and the Dominican Republic. IPRs provide an objective evaluation of the
policy, regulatory and institutional frameworks for FDI in beneficiary countries, with
the objective of attracting increased FDI and maximizing the benefits from it.
Dominican Republic
Since 2004, FDI inflows to the Dominican Republic have
been consistently increasing. With this in mind, the IPR
encouraged the Dominican Republic to adopt a new
investment law to reflect the good treatment of foreign
investors in practice. It also suggested that the government
strengthen their investment promotion efforts. The
establishment of a "national system of investment
promotion" whereby a strengthened national IPA and all
other agencies involved in promoting investment could
coordinate their activities through a network of servicelevel agreements and report to a Minister of Investment.
In his intervention, H.E. Mr. Eddy Martinez Manzueta, Minister and Executive
Director of the Centre for the Promotion of Exports and Investment (CEI-RD),
pointed out that several recommendations in the report have already been
implemented with the assistance of UNCTAD. These include revision of key
investment legislation and agreements; modernization and rationalization of the
institutional framework for FDI promotion; improvements in FDI-related data
collection; and the introduction of a competition law and competition agency. He also
called on the donor community to assist the country in implementing further technical
assistance in such areas as
dispute prevention policies,
reform of the fiscal regime,
and the launching of
linkages to better integrate
foreign investors and local
small and medium-sized
enterprises.
There
was
general
understanding that the
Dominican Republic is a
Panel of the Dominican Republic Investment Policy Review
case where significant
progress has been made to improve the conditions for FDI attraction and that this has
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resulted in important economic changes. However, the country needs to strengthen the
implementation and enforcement of new legal and economic reforms. UNCTAD
reaffirmed its commitment to assist the Dominican Republic with follow-up support
actions on those recommendations accepted by the Government.
Nigeria
The meeting highlighted reforms the Nigerian government
had made towards their investment framework, but urged
the government to adopt policies that can induce and
support foreign affiliates to make efforts to increase highvalue-added manufacturing. It also emphasized the need
for the country to improve the overall environment for
doing business, and recommended that Nigeria adopt an
effective investment promotion approach.
The IPR urged the government to design and implement a
strategy to attract non-oil FDI, focused around key
measures to improve the regulatory framework; invest in physical and human capital;
take advantage of regional integration; review external tariffs; foster linkages and
local industrial capacity; and strengthen institutions dealing with investment and
related issues. It also indicated that the Government had an important role to play in
image-building, in promoting public-private sector dialogue, in ensuring the passage
of more investor-friendly legislation through the National Assembly, in using oil
revenues for local supplier development and poverty reduction, and in developing
strategies for specific sectors. The Government and the private sector could partner to
address the shortage of electricity and the development of human capital.
H.E. Mr. Humphrey Enemakwu Abah, the Minister of State for Commerce and
Industry, reported progress on a number of the report´s recommendations, including
the setting up of a "one-stop shop"
for investment facilitation, and a
review of all fiscal and financial
incentives to investors in different
economic sectors. UNCTAD also
reaffirmed its commitment to
assist with follow-up support
actions on those recommendations
accepted
by
the
Nigerian
Government.
Members of the Panel at the Nigerian Investment Policy Review
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Workshops and Seminars
Administrative Efficiency for Boosting Productive Capacity in Times of
Crisis-Creating an environment conducive to productive capacity-building
Wednesday, 6 May 2009, 10h00-13h00
Administrative efficiency covers three major topics: transparency, simplification and
automation of business-related administrative procedures (automation is often referred
to as "e-government").
In the training session, developing and developed countries were asked to deliver
comments addressing different aspects of the issue of administrative efficiency. Most
of the comments highlighted the practical experience of several Member states in
developing a “one-stop shop” within their countries for streamlining applications for
the formation of enterprises and their operations. Most speakers underlined the
importance of administrative efficiency to alleviate the administrative cost weighing
on enterprises, boost productive capacities and bring entrepreneurs to the formal
sector. Enhancing administrative efficiency was also seen as a way to diminish
administrative misconduct and a useful approach against corruption.
Key points emanating from the discussions include:
ƒ
Countries should create “one-stop shops” for enterprise creation and
investment licensing, and make maximum use of internet technology in
this process.
ƒ
Governments should embed the development of “one-stop shops” within
a broader reform process.
ƒ
Governments should consider including members of the private sector in
the design (and possibly, implementation) of the resulting “one-stop
shops” to ensure the process is responsive to users needs.
ƒ
Countries should exchange experiences with each other as part of a
continuing improvement process of identifying new tools (especially
software tools) and new ways to streamline administrative procedures
without sacrificing the quality of regulations. In particular, South-South
cooperation should be encouraged.
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Promoting Foreign Investment in Tourism
Wednesday, 6 May 2009, 10:00-18:00
With close to 40 participants including ministers, ambassadors, directors and officials
from IPAs, academics and international experts, this one-day workshop focused on
three major topics – Investment Trends in light of the current economic crisis,
strategies for the promotion of FDI in the tourism sector and; investor targeting and
development. The workshop discussed the need for linking investment in tourism with
development as well as the role of public-private partnerships (PPPs) for the
development of infrastructure. Case studies highlighting the Indian, Jamaican and
Tanzanian experience with regards to promoting investment into the sector were also
presented, enriching the discussions.
Key points emanating from the discussions include:
ƒ
FDI in tourism is mainly associated with contract management, licensing
and franchising. Although more and more TNCs are investing directly in
hotels and other tourist assets in developing countries, the role of local
private and public sector continues to be determinant. PPPs in
infrastructure development have proven successful in various
developing countries.
ƒ
An integrated, coherent approach and policy framework is essential to
ensure greater benefits from TNC participation in the tourism industry
and to minimize potential negative impact. It is not so much about
promoting a different kind of tourism, but rather about promoting
tourism differently, in ways that create more and better linkages
throughout the value chain.
ƒ
To stimulate investment in tourism, it is necessary to have a well-defined
sector strategy with a master plan and realistic timetable. The master
plan should address all strategic issues: infrastructure, institutions,
accommodation, tourism facilities and services, means of access and
transportation, attractions, tourism markets, etc.
ƒ
Investor targeting is a screening process which involves identification of
specific investment projects, careful planning and management of
investor search programmes, a study of target company priorities, and
confidential contacts with corporate executives. On the other hand,
chances of success will be increased by choosing projects that best fit
to the country's capacity and the expectations of potential investors.
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Investment Policy Reviews - Best Practices and Lessons Learnt
Wednesday, 6 May 2009, 15:00-18:00
The aim of the seminar was to draw lessons from UNCTAD’s advisory work on
investment policy, particularly through its Investment Policy Review programme. The
seminar focused on three major topics that developing countries are usually
confronted with when designing policies to attract FDI:
ƒ
Tax policy
ƒ
Attraction and development of human capital, and
ƒ
Infrastructure development.
About 20 participants attended the seminar, including directors and officials from
IPAs, academics and international experts on FDI.
Investment Promotion Provisions in
International Investment Agreements
Thursday 7 May 2009, 10:00-13:00
The objective of the workshop was to introduce recent trends and
developments in international investment rulemaking, as well as
provide the international legal framework for investment.
The first part of the workshop focused on international investment
agreements (IIAs) and the challenges posed by the contemporary international
universe of IIAs, including the problem of policy coherence and overlapping
commitments. The second part was dedicated to the role of the Multilateral
Investment Guarantee Agency (MIGA) of the World Bank in insuring foreign
investors against political risk. The third part of the workshop covered investment
promotion provisions in IIAs - it emphasized the purpose of IIAs as a means of
attracting foreign investment.
About 30 participants attended the workshop, including IPA officials, international
experts and delegates from various permanent missions to the United Nations in
Geneva.
For more information on UNCTAD's Investment and Enterprise programme visit:
www.unctad.org/diae
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