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UNCTAD Framework recognized as key tool to harness investment for sustainable development and inclusive growth

25 September 2012

As part of the 59th session of the Trade and Development Board, member States endorsed UNCTAD’s Investment Policy Framework for Sustainable Development (IPFSD), noting the crucial roles it plays in the implementation of the Doha Mandate adopted at the UNCTAD XIII ministerial conference in Doha, Qatar in April of this year.

Developed as part of the 2012 World Investment Report (WIR), the IPFSD pulls together UNCTAD's cumulative expertise on national and international investment policymaking for making investment work for sustainable development and inclusive growth.

Under Agenda item 9 of the 2012 Trade and Development Board, member States shared their countries’ experiences concerning recent trends in foreign direct investment (FDI) and the challenges arising from today’s fast changing investment landscape. At a time when new issues emerge due to the changing geography of foreign investment flows, systemic flaws and issues of policy coherence and effectiveness, and the need to mainstream "sustainability" into investment policies, delegations appreciated IPFSD as the UNCTAD response to these challenges.

Panellists and Discussants on Item 9
Panellists and Discussants on Item 9: Investment for development - Towards a new generation of
investment policies for inclusive growth and sustainable development
 

H.E. Ms. Anabel González, Minister of Foreign Trade of Costa Rica, shared her country’s experience on how FDI helped expand the country’s productive capacity and export base. The Minister identified three key points for setting the stage to maximize the benefits of FDI: embedding investment policy in the national development strategy, aligning it as much as possible with policies in other areas and making policy consistent over time.

“UNCTAD’s Investment Policy Framework for Sustainable Development, provides a useful instrument for thinking about key issues in harnessing investment for sustainable and inclusive development. Each country has its own circumstances, for sure, but the framework’s core principles are fundamental in supporting investment policymaking in developing countries in a balanced and effective way”, she said.

H.E. Mr. Rob Davies, Minister of Trade and Industry of South Africa noted the need to acknowledge the limits of unrestrained liberalization and to be more selective in the design of investment policies both at the national and international level.

"We must recognize that the benefits of FDI are not automatic and policies are needed to ensure that FDI makes the right contribution. … I wish to support the work of UNCTAD and the idea that this work becomes strengthened so that we have a much more focused international dialogue with a consensus emerging. This will help those of us who, as individual countries, are trying to make this important transition towards investment for sustainable development", he said.

Prof. Jeffrey Sachs, Director of the Earth Institute of Columbia University, who joined the meeting by video link, commended UNCTAD for having brought FDI to the center of the development debate:

"We live in an era where FDI is the most important phenomenon: it integrates the world economy far more than trade. At the same time, we realize more and more that TNCs are at the center of national and global politics, they can influence governments in rich and poor countries alike".

Professor Sachs further emphasized the need to move ahead with the implementation aspects of IPFSD, pointing to several areas for more urgent action: extractive industries, public infrastructure (from transport to broadband connectivity) as well as corporate governance reforms and combating tax avoidance were crucial among them.

In the rich debate that followed the presentations, numerous member States, as well as two civil society groups voiced their views on current FDI trends, challenges and UNCTAD’s capacity building activities. Referring to UNCTAD’s Investment Policy Reviews (IPRs) and IIA-related training courses, country delegates encouraged the organization to continue its work in all its three pillars of activity: policy research, technical cooperation activities, and providing a platform for intergovernmental exchanges on country experiences.