Joint high level session with WAIPA Attracting FDI in service clusters

Experts also discussed the role of incentives in attracting R D related FDI.

They do so partly in the hope of attracting much needed services FDI.

The project Needs Assessment to Attract Asian FDI to Africa provides assistance to African countries in formulating policies favourable to attracting FDI from Asia, including SMEs.

Specifically, it examined the determinants of FDI in the services sector and why some locations had succeeded in attracting FDI to service clusters while others had not.

One of the reasons for this is that in most Latin American and Caribbean countries, FDI policies focus on attracting large quantities of FDI and do not pay much attention to the nature of FDI.

Assistance is required to support national investment related institutions and policy advice to create regulatory frameworks conducive to attracting FDI.

The issue of the size of host countries was mentioned by various experts as a factor in attracting R D related FDI.

It allowed for an exchange of views in a friendly setting and provided feedback on policies to Governments keen on attracting FDI.

While the political and macroeconomic stability in Benin were important factors in attracting FDI, the IPR nevertheless highlighted certain weaknesses relating to the investment framework.

In addition, the presence of reliable infrastructure is a key factor in attracting FDI and multinational enterprises, which, in turn, creates an upward spiral effect.

As stressed by UNCTAD in various issues of the World Investment Report, policies matter not only for attracting FDI but also for benefiting from it.

These countries are being denied a useful tool for attracting FDI, with recent evidence suggesting that signing a BIT by itself does not lead to increased inflows.

Of course, alongside the potential economic benefits of attracting a much larger share of Chinese FDI, legitimate competitive and national security concerns do need to be addressed.

Political stability, structural reform, a growing economy, increasing average income and the adoption of new consumption patterns have characterized the Russian market and services in attracting FDI.

The case of Mexicali, in Mexico, which was diversifying into attracting FDI in research and development activities clustered around its core base of investors in manufacturing, was highlighted.

For example, Chinese local governments became highly adept at attracting foreign direct investment (FDI) by providing attractive infrastructure and supporting services that facilitate the expansion of global production chains.

In India, the existence of reputed national research institutes and the management style of local companies, for example, were also mentioned as specific factors attracting FDI in R D.

The preponderance of small sized economies and the creation of economic space for investors and entrepreneurs remain an important challenge in attracting large flows of foreign direct investment (FDI).

The São Paolo consensus underlined that there was not just one method of development, and Benin should benefit from the best practices and experiences of other countries in attracting FDI.

In many developing countries, IPAs do not pay adequate attention to the potential for attracting FDI that could contribute to knowledge accumulation but focus rather on capital accumulation in tangible assets.

The representative of Benin, speaking on behalf of the least developed countries (LDCs), drew attention to the importance of government policies, the macroeconomic environment and the regulatory framework for attracting FDI.

The joint high level session of the World Association of Investment Promotion Agencies (WAIPA) with UNCTAD's Commission on Investment, Technology and Related Financial Issues focused on attracting FDI in service clusters.

The representative of Benin, speaking on behalf of the least developed countries (LDCs), drew attention to the importance of government policies, the macroeconomic environment and the regulatory framework for the attracting FDI.

While it was pointed out that there was no causal connection between international investment agreements (IIAs) and attracting FDI, it was nevertheless emphasized that the protection of investors would encourage the flow of investments.

The representative of the African Union said that the Africa report contained an enlightening and well thought out technical analysis of the policies of African Governments for attracting FDI, including those on privatization and deregulation.

Three of MIGA's focus areas were the facilitation of infrastructure expansion, concentration on conflict afflicted countries in need of post crisis reconstruction through private investment, and frontier markets that were underperforming in terms of attracting FDI.

The rationale for such a process is to exchange national experiences in attracting and utilizing FDI in an effective and efficient manner, through in depth policy reviews in individual countries and peer review at the intergovernmental level.

Source UNCTAD, FDI TNC database (www.unctad.org fdi statistics).

Many experts emphasized that, in light of the shift towards more knowledge based activities and increased internationalization of innovation activities, policy making aimed at attracting and benefiting from FDI in R D needs to treat the two policy areas in a holistic and coherent way.

Without FDI, there cannot be development and, without legal security, there will be no FDI.

Beware of FDI Protectionism

The global FDI environment

Luxembourg and Spain, both major recipients of FDI in 2003, received lower FDI inflows last year.

In the case of ASEAN, intraregional FDI accounts for close to one fifth of the total FDI.

But while the Government has received FDI to support tourism infrastructure in Mount Kumgang, FDI remains insignificant

The Benefits of Chinese FDI

Emerging FDI from developing countries

The global FDI environment 3

Outward FDI from developing countries

Source UNCTAD, FDI TNCs database.

LONDON Central Africa has lately been attracting some unfamiliar attention.

Recent trends in FDI have highlighted the emergence of FDI from developing countries, particularly but not only from Asia.

The impact of FDI on development

The shift of FDI to services