UNCTAD today launched investment and enterprise development programmes with five countries in Latin America, the region which since 1999 has become the largest recipient of foreign direct investment (FDI) in the developing world (see TAD/INF/2835, dated 1 February 2000). The countries are Bolivia, Brazil, El Salvador, Guatemala and Panama.
The project in Brazil is aimed at improving the effectiveness of its investment promotion programme by helping the country to attract "better" FDI - investment in key industries, and investment that is export-oriented. Although Brazil leads the region as of last year, with its US$31 billion in FDI -- 40% of the regional total -- most of that investment was triggered by privatization or by attempts to meet the needs of the domestic market. UNCTAD’s assistance is designed in part to enhance the positive impact of FDI through linkages to export-oriented small and medium-sized enterprises (SMEs). A capacity-building programme will be set up to make government focal points for investment promotion more effective, and use of the Internet as a marketing tool to attract new investments will be developed. The project is being funded by the Swiss government.
The first challenge for Bolivia, which accounted for less than 1% (US$ 800 million) of the region’s FDI inflows last year, is to attract more investment. At the government’s request, UNCTAD is today launching a programme to develop and implement a national investment promotion strategy. The idea is to improve the investment climate, strengthen the country’s investment promotion activities and increase the quantity of FDI inflows. The programme has been made possible by the financial support of the Swiss government.
In Central America, UNCTAD is launching its EMPRETEC programme on enterprise development to help entrepreneurs build innovative and internationally competitive SMEs. The programmes in El Salvador, Guatemala and Panama will create an well-educated class of local entrepreneurs trained to work with foreign investors, create job opportunities and diffuse new technologies and skills. The three programmes are being financed by the Inter-American Development Bank (IDB), marking the first subregional cooperative effort between UNCTAD and the Bank.
Since its inception in 1988, the EMPRETEC programme has become operational in 12 African and Latin American countries. UNCTAD views enterprise development as crucial in achieving full integration of FDI into the host economy, which is how investment can best contribute to national development.
