10 May 2011
[SPEAKING POINTS - AS PREPARED FOR DELIVERY]
Ladies and gentlemen,
I am very pleased to welcome you to this ninth session of the Investment Advisory Council.
The meeting is being held in collaboration with our partner, the International Chamber of Commerce (ICC), and I am delighted to co-chair this meeting with Mr. Jean-Guy Carrier, Secretary-General of the ICC.
I am also particularly honoured by the presence of Mr Joseph Deiss, President of the United Nations General Assembly, and would like to acknowledge today his indefatigable commitment to assist developing countries to meet the MDGs.
As some of you may recall, the Investment Advisory Council was established 10 years ago, during the third United Nations Conference on the Least Developed Countries, in Brussels. The objective was to provide you - Heads of States, government leaders and business executives - with a forum for discussing and launching initiatives aimed at ensuring that investment works for sustainable development in LDCs.
The Programme of Action for the decade 2001-2010 adopted in Brussels recognized the pivotal contribution of Foreign Direct Investment (FDI) towards capital formation, as well as know-how and the generation of trade opportunities. Consequently, it called for an increase in Foreign Direct Investment to LDCs. Indeed, we estimate that during the last decade the annual rate of growth of FDI inflows to LDCs was 15%, and their share in global FDI flows rose from 0.9 per cent to over 2 per cent.
However, FDI has tended to be concentrated in enclaves of export-oriented primary production, which has created limited employment, and has had few technological and productivity linkages with the wider economy. Nevertheless, the role of FDI remains critical for financing the investment that is needed for sustainable development and poverty reduction. Our newly issued publication, "Foreign Direct Investment in LDCs: Lessons Learned from the Decade 2001-2010, and the way forward", which will be introduced later in the session, analyzes some of the shortcomings of the last decade and formulates new policy recommendations to increase FDI inflows to LDCs and harness their impact for sustainable development.
I spoke yesterday about the instrumental role of developing productive capacities in LDCs, to set in motion a process of structural transformation and inclusive and sustained economic growth. In this context, I want to emphasise that foreign investment can make a huge contribution to productive capacity development, not just in terms of capital but also expertise, training, and linkages with the local economy. LDCs should therefore be supported in their efforts to attract and benefit from FDI. They may also need assistance in identifying and evaluating appropriate partnerships for financing productive capacity development through, for example, public-private partnerships in infrastructure projects.
There is therefore a need for a new partnership for LDC development, which in UNCTAD we call: "Invest in the poor, for the poor and with the poor". This means:
- developing viable business models to invest in developing countries (invest in the poor);
- investing in products and services that are accessible to and affordable by the poor (invest for the poor); and
- creating linkages with domestic firms and integrating local SMEs into global value chains with a view to building strong indigenous productive capacities (invest with the poor).
This new partnership will provide the focus of today´s discussion, which will also be informed by two recent UNCTAD studies on Foreign Direct Investment in LDCs: the first publication, previously mentioned, which addresses some of the lessons learned from the last decade ["Foreign Direct Investment in LDCs: Lessons Learned from the Decade 2001–2010 and the Way Forward "]; and, the second, which offers a guide to policymakers and investment promotion agencies on investment in the pharmaceutical sector in LDCs ["Investment in Pharmaceutical Production in the Least Developed Countries - A Guide for Policymakers and Investment Promotion Agencies"].
We will also have the privilege to benefit from the views and experience of Mr. Corrado Ruffini, from Mc Kinsey & Co., who will, in a few minutes, make a short presentation on the financing gap for private sector development in LDCs.
I therefore very much look forward to our discussions and to your suggestions for new concrete initiatives to be implemented in the next decade. Before giving the floor to Mr Jean-Guy Carrier, let me express our gratitude to the Governments of China and Norway for their support to the Investment Advisory Council, as well as the government of Turkey for hosting the event.