Statement by Mr. Mukhisa Kituyi, Secretary General
G20 Trade Ministers Meeting
Delivered on behalf of the Investment Working Group (UNCTAD, OECD, World Bank, WTO)
We thank the Chinese Presidency for hosting this inaugural G20 Trade Ministers Meeting, and the G20 for its initiative to boost trade and investment.
We also very much welcome the creation of a G20 Trade and Investment Working Group. UNCTAD – as the focal point for investment in the UN system with 4 decades of experience in building consensus and providing policy advice in the area of investment – is pleased to have been able to play a role in supporting the group and coordinating its investment stream, working in close collaboration with our colleagues from the OECD, World Bank and WTO.
Boosting productive investment is a priority for all countries. It is the engine of economic growth and development. Foreign direct investment contributes capital and helps diffuse technology, create employment and connect economies to world trade. G20 member countries account for over half of global inward FDI and more than two-thirds of global outward FDI.
As the main investors and the biggest recipients of global investment, G20 members can play a catalytic role in global cooperation in investment policy making. This is important to stimulate investment for growth and jobs, to make investment work for sustainable development, to avoid protectionism, and to ensure policy coherence.
UNCTAD’s latest World Investment Report, launched only two weeks ago, shows again the extent to which global leadership is required to stimulate investment in productive capacity. Although global investment flows were up more than 30% in 2015, the total is still around 10% below the pre-crisis peak. Moreover, much of the increase was driven by transactions with little impact on productive capacity.
Even before the headwinds of Brexit, UNCTAD projected FDI flows to decline by 10-15 per cent in 2016. The importance of coordinated G20 action to stimulate investment is now even greater.
Aside from monitoring and periodically reporting to you on investment policy measures, the work we have supported this year in the G20 covers broader areas of investment policy, including international investment policies. Our World Investment Report shows that, at this moment, close to 150 economies are engaged in negotiating at least 57 new investment agreements.
That is why we welcome the G20 Guiding Principles for Investment Policymaking as a key outcome of this year’s G20 Presidency. The leadership that the G20 is showing and the consensus around this core set of Principles will foster policy coherence in treaty making, and will help international collaboration in and beyond the G20.
I wish to stress that last point: G20 Investment Policy Principles are not just relevant for G20 members. They will also be used by, and have an impact on, other countries. That is why it is important to consider the broad acceptability of the Principles beyond the G20.
In conclusion, I wish to stress the importance of further work on Investment Facilitation, building on this year’s efforts. UNCTAD believes that Investment Facilitation constitutes a policy gap that needs to be closed.
Facilitating investment is crucial for the post-2015 development agenda. We will make it a key theme of the 2016 World Investment Forum, which will take place during the UNCTAD14 Conference in Nairobi in 10 days. I hope that our discussions there will provide a further push to make the facilitation of investment for sustainable development an even more prominent item in the coming years.
Finally, as UNCTAD has also contributed to the Trade work stream, I wish to add a point on trade and development. As I said at the start, we very much welcome the objective of the G20 to boost global trade. We should bear in mind the importance of trade for development, and the importance of supporting developing countries in their efforts to participate in, and move up, global value chains.
One of the areas where we see significant potential for growth in developing countries is E-commerce – as is acknowledged in your Trade Growth Strategy. E-commerce can be a driver of economic growth, inclusive trade and job creation, including in low-income countries. To help developing countries build capacity and to support the growth of E-trade, we are launching an E-Trade initiative at UNCTAD14 in Nairobi. I believe this initiative fits well with the G20 work during this Presidency. We look forward to working with you to make E-Trade work for development.