Investment Facilitation for Development

Foreign direct investment (FDI) can play a significant role in implementing the 2030 Agenda for Sustainable Development, especially in developing countries. However, FDI flows need to be ramped up considerably to make a marked contribution in order to meet this objective. This is all the more important now because global FDI flows decreased substantially as a result of the Covid-19 pandemic. According to the United Nations Conference for Development (UNCTAD), global FDI contracted by 49% in the first half of 2020, compared to the previous year. This makes the facilitation of FDI flows - and especially the facilitation of sustainable FDI flows - urgent.

Beyond such economic fundamentals as market size and growth, the quality of infrastructure and the level of skills, the impediments to sustainable FDI flows to developing countries can include:

• low levels of predictability and transparency of the regulatory framework,
• difficulties of undertaking investment,
• insufficient international cooperation among governments as well as stakeholders on investment facilitation matters,
• lack of incentives to contribute as much as possible to sustainable development.

To deal with these challenges, 106 members of the World Trade Organization (WTO) are negotiating a multilateral framework on investment facilitation for development.

In this context, the International Trade Centre (ITC) and the German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE) have launched a project on "Investment Facilitation for Development." The project supports the negotiations of a multilateral framework on investment facilitation for development by:

• building negotiation capacity in developing (including least developed) countries,
• channelling ground-level and analytical expertise to negotiators,
• promoting public discussions of issues related to investment facilitation for development.

The project delivers three sets of complementary activities:

• Two focus groups of global experts have been established to marshal global perspectives:
• The Commentary Group on a Multilateral Framework on Investment Facilitation for Development consists primarily of experts from investment promotion agencies, investment service providers and the private sector; it is being implemented together with the World Economic Forum. These experts provide ground-level insights for the drafting of the framework.
• The Expert Network on a Multilateral Framework on Investment Facilitation for Development consists of academic experts who explore legal, political and economic challenges that need to be addressed to move the negotiations forward.
• The project delivers capacity-building workshops to delegates from Missions to the WTO to showcase best practices as regards putting in place and implementing investment facilitation measures for development.
• Regular webinars are organized for the general public, to provide insights from experts and offer a platform for public dialogue.

For further information, please contact Quan Zhao (zhao@intracen.org), ITC; Axel Berger (axel.berger@idos-research.de), DIE; Karl P. Sauvant (karlsauvant@gmail.com), Columbia University/CCSI