Policies that effectively harnessed entrepreneurship and maximized investment were vital for restarting sluggish economic engines and boosting growth potential in developing countries, Government officials and heads of international organizations said this afternoon during a round table discussion at the Thirteenth Ministerial Meeting of the United Nations Conference on Trade and Development (UNCTAD XIII) in Doha, Qatar.
“Sustainable investment and enterprise [growth] can help guide us towards development-led globalization,” said UNCTAD Secretary-General Supachai Panitchpakdi as he opened the discussion on the theme “Promoting investment, trade entrepreneurship and related development polices to foster sustained economic growth for sustainable and inclusive development”. It was the second high-level round table convened at UNCTAD XIII, following an earlier round table on “Enhancing an enabling international environment at all levels in support of inclusive and sustainable development”.
Mr. Supachai said that, as a major policy tool, true investment could help developing countries boost productive capacity, create decent jobs and take advantage of technology transfer. “Policy matters. Development strategy matters. Creating an enabling global economic environment matters,” he declared, stressing also the need for policies that would bring public and private sector investment strategies together.
Rob Davies, Minister for Industry and Trade of South Africa, chaired the wide-ranging discussion, which aimed to build on the work of UNCTAD’s 2012 World Investment Forum — running in Doha from 20 to 23 April. Nearly 30 high-level Government and agency officials participated in the round table, with many sharing national or practical experiences on how countries could attract investment to lift people out of poverty and how policies at the nexus between investment, trade and enterprise development could be strengthened to facilitate productive capacity-building, industrial upgrading and integration into global markets.
Costa Rica’s Minister for Foreign Trade was among the many participants who flagged foreign direct investment (FDI) — and matching the right investor with the right partner — as a “powerful motor” for development and sustained growth. As such, it was vital to adopt national policies that would make smaller nations attractive to investors. She gave a brief recipe of necessary measures that developing countries and emerging economies could take to enhance their investment appeal, including “getting macroeconomic fundamentals right”, fortifying the rule of law, enhancing investment promotion activities, rebuilding physical infrastructure and scaling up financing, especially for small and medium-sized enterprises.
Agreeing with several of those points, Australia’s Parliamentary Secretary for Foreign Affairs said developing countries faced myriad challenges in infrastructure, education and institutional frameworks, as well as volatile inflation and exchange rates. To overcome such obstacles and attract the right investors, it was necessary for national authorities to harness productive capacity and invest in human resources, particularly the potential of small and medium-sized enterprises. He called for policies at the global level that would, among other things, streamline business rules and regulations while increasing the range of collateral.
“Capital knows no boundaries; it will go where it gets the best return on its investment,” said Zambia’s Minister for Commerce, Trade and Industry, who explained that, with that principle in mind, his country promoted itself as a “landlinked” rather than a “landlocked” country, and a gateway to more than 300 million consumers in its subregion and even further afield. Investors were driven by profit and their entry into particular markets often required, among other things, that an adequate corporate responsibility regime be in place. Overall, Governments bore responsibility for creating an enabling investment environment, he said, finally declaring: “We must be the ultimate drivers of our own development.”
Also reflecting on his national experience, Tunisia’s Minister for Development and International Cooperation said that recent revolutions in his country and other Arab nations had, among other aims, called for the freedom to engage in entrepreneurship and to work. In order to meet such expectations in Tunisia, the Government aimed to reduce the country’s reliance on foreign aid while continuing to create a conducive environment for foreign investment through improved investment laws and other measures, and demanding social responsibility from investors.
Picking up that thread, Finland’s Minister for International Development said social responsibility must be at the core of development policy, for which private investment was critical as assistance was limited. Laying out the elements that attracted foreign investment, she said it was equally important to ensure domestic engagement and resources. An important part of mobilizing domestic resources, in turn, was empowering women, she added.
Haiti’s Minister for Commerce and Industry called attention to the highly asymmetrical global financial environment in which wealth was concentrated in a few powerful nations and institutions. That troubling reality fostered lopsided investment patterns that left many countries scrambling for investment partners. As such, he called for the creation of special investment funds that would seek out investors and match them with partners on the basis of national priorities and absorptive capacities.
Focusing on what UNCTAD could do to help developing and emerging economies promote investment and trade among themselves as well as build their own productive capacities, Ghana’s Minister for Trade and Industry said the organization should help create a platform for such interaction and assist the relevant Governments to “think differently” about trade and investment agreements, which was the only way to drive change. Namibia’s Minister for Trade and Industry asked how UNCTAD could help ensure that investors and their enterprises actually improved people’s lives. Indeed, many African nations were rich in resources while their citizens remained mired in poverty, he pointed out, adding that in most such cases, multinationals “just take what they need”, but contributed very little to real economies in the countries where they operated.
Also participating in the discussion were the Under-Secretary for Investment Development and Trade Promotion of Argentina; the Minister for Industries of Bangladesh; the Assistant Minister for Commerce of China; the State Secretary for Economics and Technology of Germany; the Parliamentary Vice-Minister for Foreign Affairs of Japan; the Vice-Minister for Economic Relations and Integration of Paraguay; the Deputy Minister for Economic Development of the Russian Federation; and the Principal Deputy Assistant Secretary of State for Economic Growth, Energy and the Environment of the United States.
Also making statements were the State Secretary of Switzerland; the Foreign Investment Ombudsman and Chairman of the Regulatory Reform Committee of the Republic of Korea; the Vice-Minister of Economy, Investment and Competitiveness of Guatemala; the Vice-Minister for External Trade of Colombia; the Deputy Minister for Trade, Small and Medium Enterprises and Tourism of Djibouti; the Deputy Minister for Planning and Development of Mozambique; the President of the World Association of Investment and Promotion Agencies and Deputy Minister for Development, Industry and Foreign Trade of Brazil; the State Minister for Trade and Industry of Rwanda; the State Minister for Trade and Cooperatives of Uganda; and the Minister for Trade and Industry of Botswana.
Others making interventions were Patricia Francis, Executive Director of the International Trade Centre (UNCTAD/WTO); Cheick Sidi Diarra, Special Adviser on Africa and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States; Valentine Sendanyoye Rugwabiza, Deputy Director General of the World Trade Organization (WTO); and Richard Boucher, Deputy Secretary-General of the Organisation for Economic Cooperation and Development (OECD).
The Meeting will reconvene tomorrow with a high-level event on “Women in Development”.