Government and business leaders meeting today in São Paulo at the fourth meeting of the Investment Advisory Council (IAC) with UN Secretary-General Kofi Annan proposed practical means to increase the benefits of foreign direct investment (FDI) in developing countries, in particular least developed countries (LDCs), through establishing and deepening sustainable business linkages between foreign affiliates and domestic firms.
The IAC was established at the Third UN Conference on the Least Developed Countries in May 2001 on the joint initiative of UNCTAD and the International Chamber of Commerce (ICC). It provides government officials and business executives with a framework to explore practical ways of attracting increased FDI into developing countries, in particular LDCs, and anhancing the benefits of that investment.
The fourth meeting of the Council, held on in the occasion of UNCTAD XI, was organized in cooperation with the Global Compact of the United Nations and sponsored by the Governments of Norway and Germany. Ministers from developing countries, senior corporate executives and representatives of donor countries and several Brazilian organizations participated.
As recommended by the earlier meetings of the IAC in Monterrey (March 2002), Johannesburg (August 2002) and Tokyo (November 2003), today´s discussed a number of concrete proposals to strengthen the investment climate and deepen linkages between domestic enterprises and foreign affiliates of transnational corporations with a view to strengthening the domestic enterprise sector and making it internationally more competitive.
Concrete technical assistance proposals announced today include:
- Promotion of business linkages in Brazil, financed by the Government of Germany and implemented in cooperation with UNCTAD, GTZ (Germany), Ethos (Brazil), FDC (Brazil) and the UN Global Compact.
- Promotion of business linkages in Uganda, financed by the Government of Sweden in cooperation with UNCTAD, UNDP, Enterprise Uganda and the Uganda Investment Authority.
In addition, the Japan Bank of International Cooperation announced financial support for a project aimed at strengthening the investment climate in two Asian LDCs -- Cambodia and Laos. The project will focus on concrete and measurable activities to help the two governments achieve best-practice level in establishing an enabling investment framework.
Participants in today´s meeting recommended extending work on best practices based on the projects announced today and other initiatives. In particular, business is encouraged further to explore the successful deepening of linkages with local enterprises, within the framework of corporate responsibility, which is a way to generate new jobs, enhance the competitiveness of the domestic enterprise sector and thereby contribute to the creation of sustainable livelihoods.
