Reviewing Investment Policies in LDCs: Key features Chantal Dupasquier DITE, UNCTAD 25 September 2007
Background LDCs face significant development challenges and have not made sufficient progress in meeting the MDGs High level of poverty Lack of diversification Vulnerability to shocks High external debt burden Addressing these challenges require significant financial resources – aid, domestic savings, FDI IPRs can help member States increase access to investment, FDI in particular
IPRs – Global Vision and Strategy Vision –Enhancing the contribution of FDI to achieving national development goals, including the MDGs Strategy –Assessing the investment environment and policies –Advising governments and supporting their policies on FDI –Supporting institutional strengthening and training
IPRs completed so far 20 reviews (8 LDCs) –Algeria, Benin, Botswana, Colombia, Ecuador, Egypt, Ethiopia, Ghana, Kenya, Lesotho, Mauritius, Morocco, Nepal, Peru, Rwanda, Sri Lanka, Tanzania, Uganda, Uzbekistan and Zambia IPRs in progress –Dominican Republic, Mauritania, Nigeria and Vietnam
Key elements of an IPR Taking stock of FDI recent trends and economic impact Evaluating the regulatory, operational and institutional framework for investment –FDI entry, treatment, protection –Taxation –Business environment –Sectoral regulation –Regional environment Strategic sectoral and institutional recommendations
IPR Process Voluntary process initiated by member States Review undertaken by UNCTAD with support of national and international experts –Desk research, fact finding mission, survey of investors, etc. Peer review –Comments from international experts –National workshop –National policy statement at ministerial level –Presentation to intergovernmental bodies of UNCTAD Follow-up activities
How can member States maximize the benefits of an IPR? Strong political will to improve the investment environment Involvement of all relevant national stakeholders in the review process Commitment at the highest level of government to implement the outcome of the review
Expected outcome FDI to become a key source of financing development in LDCs At the moment, LDCs depend heavily on aid flows. While this is useful in the short run, it is not a sustainable long-term solution to their financing needs
THANK YOU