Some three hundred Government representatives, business executives, non-governmental organizations, the trade union movement, leading academics and the civil society at large participated in the Global Investment Forum on foreign direct investment (FDI) and development organized by UNCTAD on 10 October (see TAD/INF/2684). Among them were Ministers of Trade and Industry from developing countries, senior officials from intergovernmental organizations, and top executives from Nestle of Switzerland, L.G. Electronics of South Korea and Bata Shoes of Canada.
Participants paid tribute to the Secretary-General of UNCTAD, Mr. Rubens Ricupero, for having set up an unprecedented opportunity for people from very different backgrounds and perspectives to interact on this very important issue at a critical time, two months ahead of the Ministerial Conference of the World Trade Organization (WTO) in Singapore.
Mr. Alec Erwin, Minister of Trade and Industry of South Africa and President of UNCTAD IX, hailed the Forum a "success," noting that it had provided "lucid inputs" in the international debate on the critical and controversial issue of a possible multilateral investment arrangement. According to Mr. Erwin, who chaired the Forum, it was clear that the dialogue on the arguments in favour of and against the need for a multilateral framework, and eventually its contents, must go on in UNCTAD, in close cooperation with other relevant intergovernmental organizations.
The Forum demonstrated the need for a more holistic approach to the question of costs and benefits of international investment. The question should be addressed in the perspective of macro-economic policies for development, both at the domestic and international level.
There was a strong feeling among ministers from some developing countries that more research and analysis was needed about the critical issues at stake in a multilateral framework on investment before bringing the subject to a rule-making body such as the WTO.
Leading representatives of business, on the other hand, urged that negotiations on an international investment framework be launched in the near future. Ms. Maria Livanos Cattaui, Secretary-General, International Chamber of Commerce (ICC), and Mr. Douglas Gregory, Senior Advisor, International Trade and Investment, IBM Canada Ltd., called for governments to recognize the benefits of FDI by transnational corporations, to remove obstacles in the path of inward flows of private investment to their countries, and for an early start of negotiations on a multinational investment agreement.
The Forum brought to the fore the increasing linkages between trade and investment. An Assistant Minister from China, for example, which accounts for the lion share in FDI flows to developing countries, stated that his country´s overall foreign trade volume had risen sharply, with the share of foreign affiliates in this trade now accounting for about 40%.
Many speakers stressed the complexity of the issues related to the effects of economic policy liberalization on the quality, quantity and distribution of FDI, and its impact on development. Both developed and developing countries urged UNCTAD to undertake more policy-oriented research in this field.
Mr. Erwin noted that this is clearly part of UNCTAD´s new mandate, following the UNCTAD IX meeting in South Africa, last May. The Conference had called on UNCTAD to assisting the developing countries to fully prepare for the complexities and the challenges that regional and multilateral negotiations can involve. Mr. Erwin stressed that investment has become a central issue on the agenda of UNCTAD and indeed of the dynamics of the global economy.
An unprecedented format
The Global Investment Forum put in practice what had been determined at UNCTAD IX in the Spring in fully involving a wide range of actors in deliberations in UNCTAD on key issues of economic development. This precedent-setting format of bringing private and public sector leaders together at such a level, is a symbol of the "new UNCTAD," Mr. Ricupero said.
Highlighting this aspect of the all-day meeting was the fact that the first key presentations were not made by government officials, but representatives of the business community.
The UNCTAD Secretary-General said that the Forum achieved its prime goal of assisting governments to broaden understanding of the critical trends and issues in global investment today. These discussions, he added, will help governments to prepare for the Singapore WTO meeting.
Mr. Ricupero added that FDI is growing more rapidly than global trade, and that many of the speakers at the Forum recognized that the time has come for investment to be seen as the full partner of trade in global commerce negotiations.
At the same time, he said that it is also clear that numerous governments are not adequately prepared yet to enter negotiations on a multilateral investment framework. The Forum brought to the fore the complexity of this issue and the concerns that many governments have that FDI be channelled in ways that ensure the maximum contribution to social and economic development in developing countries.