While analysts warning that the global investment slowdown will have repercussions for the global economy, UNCTAD has updated its advice on investment facilitation, helping countries to make it easier for investors to establish or expand their investments, as well as conduct their day-to-day business.
The advice will also benefit those countries which will need financial support to implement the Sustainable Development Goals (SDGs). Developing countries, for example, face an annual SDG-investment gap of $2.5 trillion.
"Our Global Action Menu for Investment Facilitation is set to establish itself as an important instrument for governments worldwide for their national and international policy needs," James Zhan, director of UNCTAD's investment and enterprise division, said.
"Although facilitating investment is crucial for growth and sustainable development, to date, national and international investment policies have not paid it enough attention," he added.
At the national level, for example, many countries have set up policy schemes to promote foreign investment. But while companies will likely be more tempted to invest in developing countries when the process of investing is easier, the period 2010-2015 saw just 23% of new investment promotion and facilitation policies around the world relate to investment facilitation per se.
Companies trying to invest in a developing country may encounter difficulties such as poor information, complicated bureaucracies and a low-level of expertise regarding their needs.
At the international level, concrete facilitation actions in the existing 3,300-plus international investment agreements (IIAs) are either absent or weak.
Responding to this, UNCTAD has released an update to a 10-part "action menu" that helps governments to be more transparent and provide better administrative procedures and other support mechanisms to make investing easier.
The menu was first released in January 2016 and has subsequently been enhanced by feedback from government officials and experts.
The menu is comprised of the following 10 action lines, which encourage governments to:
- Promote accessibility and transparency in the formulation of investment policies and regulations and procedures relevant to investors
- Enhance predictability and consistency in the application of investment policies
- Improve the efficiency of investment administrative procedures
- Build constructive stakeholder relationships in investment policy practice
- Designate a lead agency, focal point or investment facilitator with a mandate
- Establish monitoring and review mechanisms for investment facilitation
- Enhance international cooperation on investment facilitation
- Strengthen investment facilitation efforts in developing-country partners, through support and technical assistance
- Enhance investment policy and proactive investment attraction in developing-country partners, through capacity-building
- Complement investment facilitation by enhancing international cooperation for investment promotion for development, including through provisions in IIAs
Ministers, heads of investment promotion agencies, senior investment treaty negotiators, and other investment stakeholders have supported the initiative and requested UNCTAD to further develop policy advice, technical assistance and global consensus building in investment facilitation.
The updated advice on investment facilitation builds on new mandate from UNCTAD 14 in Naiorbi (link) and a G20 call for action on investment facilitation.
