1. UNCTAD/CD-TFT 1 FDI Trends & Developments European Regional Economic Forum 2010 The Role of FDI in Developing Knowledge-Based Competitiveness in European Regions Elisabeth Tuerk Legal Expert, UNCTAD, Division on Investment and Enterprise (DIAE), Geneva

2. UNCTAD/CD-TFT 2 Outline UNCTAD – some background Latest trends & developments FDI & investment policies FDI & (regional) competitiveness

3. Entrepreneurship Investment Policy Reviews Investment Trends and Policy Monitor ISAR IIAs Investment Information Systems Mission: Investment and Enterprise for Development Research & Analysis Technical Assistance Investment Facilitation Compact Consensu s Building WIRWIF UNCTAD – Some Background

4. UNCTAD/CD-TFT 4 The Crisis ended 4-year FDI boom ($ billions) Global FDI declined from $2 trillion (2007) to $1.7 trillion (2008) FDI flows to developed economies fell by 29%, to $962 billion FDI flows to developing economies rose 17%, to $621 billion Transition economies posted a new record high, with inflows reaching $114 billion, a 26% increase

5. UNCTAD/CD-TFT 5 Global FDI Quarterly Index, 2000-2009 Base 100: quarterly average of 2005

6. UNCTAD/CD-TFT 6 Cross-border M&A Sales & Int. Greenfield Projects, 2007-2009

7. UNCTAD/CD-TFT 7 Top Recipients of FDI Inflows The US remained the largest recipient country, followed by France, China, UK & the Russian Federation. The fact that half of the top 20 recipients are emerging economies is symbolic of the changing FDI landscape of 2008. Global FDI inflows, top 20 economies, 2007–2008 ($ billion)

8. UNCTAD/CD-TFT 8 TNCs Int. Investment Plans

9. UNCTAD/CD-TFT 9 WIR & Global Investment Trends Monitor

10. UNCTAD/CD-TFT 10 National Policy Trends: Overall more favourably to FDI However, in some countries a more restrictive FDI approach has emerged Additionally: signs of increasing covert protectionism, e.g., – –favouring domestic investment or invoking national security exceptions that stretch the definition of national security

11. UNCTAD/CD-TFT 11 International Policy Trends: IIA Network Growing In 2008: 59 BITs and 75 DTTs were signed; 1st half of 2009: 25 BITs were signed; By 1st half of 2009, totals: 2.717 BITs and 2.825 DTTs.

12. UNCTAD/CD-TFT 12 Other Int. Investment Agreements, 1957-2008 Growring

13. UNCTAD/CD-TFT 13 Resulting in... A Spaghetti Bowl of IIAs

14. UNCTAD/CD-TFT 14 UNCTADs Quarterly Investment Policy Monitor

15. UNCTAD/CD-TFT 15 Impact of FDI FDI can improve the competitiveness of, e.g., human resources, local firms, regions & countries FDI can upgrade competitiveness, thr., e.g. technology transfer, knowledge spillovers, local innovation, enhancing exports, infrastructure projects Virtuous cycle: FDI improves competitiveness while competitiveness also attracts FDI

16. UNCTAD/CD-TFT 16 Harnessing FDI for (Regional) Competitiveness Improving locational determinants of FDI, both economic & policy determinants Strengthening (regional) investment promotion e.g. regional investment promotion agencies Offering the right incentives for investors e.g. tax incentives, special economic zones, science and technology parks

17. UNCTAD/CD-TFT 17 To Conclude... Upgrading competitiveness focus on the relevant types of FDI (Regional) policies focus on these relevant types of FDI Regional policy on FDI interlinked & coherent with national policies

18. UNCTAD/CD-TFT 18 Visit UNCTAD Websites www.unctad.org/diae www.unctad.org/wir www.unctad.org/fdistatistics

19. UNCTAD/CD-TFT 19 Thank you for your attention! Elisabeth.Tuerk@unctad.org IIA@unctad.org