1. THE WORLD BANK “Global Investment Promotion Benchmarking: Implications for Practitioners” 28 March 2011 Investment Climate Dept. (CIC) World Bank Group

2. THE WORLD BANK Outline Why GIPB? What Methodology? What Did We Find? And the Impact? What Next? 2

3. THE WORLD BANK Why GIPB? The Global Investment Promotion Benchmarking Program surveys the ability of national investment promotion intermediaries (IPIs) to provide information to foreign companies for their investment projects. By doing so GIPB contributes to sharpen country efforts to bridge the information gap about their investment opportunities and effectively attract FDI to their countries. TARGET: agency managers and policy makers are GIPB primary audience GIPB is not a country indicator. It is an institutional assessment mechanism for use in operational and policy advisory work by client s and IPIs independently. 3

4. THE WORLD BANK Why GIPB? In 2009, GIPB revealed that over 70% of IPIs may miss out on investment opportunities knocking on their doors because they are unable to provide the basic business information that companies need during the site selection process. GIPB Objectives are to: a) Improve public accountability and governance by providing governments with a measure of the performance of their mandated agency Achieved through 189 tailored and confidential performance country reports. b) Encourage improvements in IPIs' facilitation services to support attraction of more FDI As a result of helping IPIs to improve their level of facilitation performance on a regional basis. c) Enable CIC to assess the effect of its advisory work with clients in the area of investment facilitation The project will achieve improvements in at least 20 CIC clients using GIPB09 as baseline. 4

5. THE WORLD BANK What Methodology? Mirroring Investors’ Site Selection 5 Simulating investor site selection methodology, a global site location consultant assesses:  IPI Websites– quality, relevance and usefulness for a foreign investor of country and sector information provided.  Project Inquiry handling – a mystery shopper approach tests IPIs’ interaction with investors, information provision and how the IPI attempts to influence the investors’ decision. In GIPB09 two investment cases - a manufacturing and software development project – were tested A 2008 survey of 3,600 US large companies ($25m+) conducted by DCI Consulting reveals that: 64% of respondents will use the IPI website in their next investment location search. 92% of respondents will contact the IPI during the investment decision process Site location consultants are more likely to use the IPI services for information in the screening process. A 2008 survey of 3,600 US large companies ($25m+) conducted by DCI Consulting reveals that: 64% of respondents will use the IPI website in their next investment location search. 92% of respondents will contact the IPI during the investment decision process Site location consultants are more likely to use the IPI services for information in the screening process.

6. THE WORLD BANK 6 The Site Selection Methodology GIPB focuses on long-listing information needs

7. THE WORLD BANK The Site Selection Process: It’s all about information, and developing country IPIs play a key role 7  Project drivers  Success factors  Project specifications  Search Area  Countries/ regions  Fatal flaw analysis  Compare costs and conditions IPI provides country and sector information  Field investigations  Verify screening and process-drill down  Identify specific opportunities and risks IPI provides detailed information and field logistics support (site visit)  Risk analysis  Real estate  Incentives  Permitting IPI provides quality contacts, prepares development packages and ensures permits are granted speedily  Transition planning  Facilities plan  Vendor selection  Construction ramp-up IPI services investor to fast-track project implementation Long listingShort listingNegotiationsImplementation

8. THE WORLD BANK What Did We Find? Implications for investment promotion Investors seeking business information in non-OECD countries and contacting IPIs for assistance may become frustrated with the government sources. Most developing country IPIs do not fully understand private investor information needs, or don’t prioritize investor information over other investment promotion activities (image building, proactive missions, events, etc) In short, a majority of developing countries will miss out on FDI opportunities knocking on their doors because they fail to provide the operational information and investment climate information that companies require for their project analysis. Developing countries can attract more FDI if they focus on this high impact and low cost activity: Bridging the information gap potential investors face when researching their country/sector. 8

9. THE WORLD BANK Government agencies fail to deliver the information that investors need…online and offline Good news… Almost every country has an agency mandated to promote FDI and facilitate investors entry. Good news… Investors can find virtually every IPI online and contact them. Not so Good News… IPIs do not consider important, or lack the skills to prepare the kind of information that companies need during the site selection process! 9 Regional performance in each GIPB assessment category (Scores for each category calculated over 100%)

10. THE WORLD BANK Regional FDI Facilitation Trends Countries realize the importance of facilitating information online, although concentration has been overwhelmingly on website architecture and design and much less so on content and substance But… improvements in investment project inquiry handling have been moderate and levels of service remain low. In SSA more IPIs are making a bigger effort to be business-oriented and put their countries in the foreign investors’ radars. Most improved regions: SA and EAP (25% average) Regional comparison between 2006 and 2008 Data 10

11. THE WORLD BANK What Does GIPB Provide? Outputs A report with global results and regional trends, including regional performance comparisons. The Summary Report [PUBLIC] A customized report for each country with detailed results and steps for improvement. IPI Customized Reports [CONFIDENTIAL ] How can IFC Advisory Clients use GIPB? Assess the efficiency of the national investment promotion effort Measure performance in FDI promotion against competitor locations Learn from best practice countries 11

12. THE WORLD BANK What Impact? Positive feedback from IPIs, many have express their commitment to improve their performance based on GIPB’s tailored recommendations. MENA (Morocco, Egypt, Jordan) OECD (Belgium, Spain, Italy, Germany, Denmark) SSA (Guinea, Seychelles, Rwanda, Uganda and Mali) LAC (Ecuador, Haiti, Mexico, Nicaragua, Costa Rica, Honduras, Dominican Republic, Chile, Brazil, Argentina, Jamaica, Colombia, Ecuador) ECA (Turkey, Belarus) EAP (Indonesia, PNG, Thailand, South Korea, China, Philippines, ) SA (Bangladesh) 12

13. THE WORLD BANK Impact Case Study: PNG PNG received the GIPB09 report and learned that two potential investors had contacted their agency with questions about their project, and the IPI had failed to respond to both of them. PNG would have missed both projects if they had been real. GIPB served as an external assessment of PNG’s IPI effectiveness. PNG followed the detailed recommendations from the confidential GIPB report to outline a work plan that included: a)a vision of performance for staff, b)a client-tracking system, and c)a M&E plan to assess conversions of inquiries into leads. 13

14. THE WORLD BANK Next steps: GIPB12 Report: Global Launch in Jan 2012 Reaching out to key audience: Dissemination strategy includes road shows (workshops, joining existing events and meetings) in the regions and with key partners Reaching out to a broader audience: Strong web presence with comparative time data series, including “how to” toolkit for governments and private sector organizations Global FDI Flows vs GIPB performance (Univ. of Oxford) 14

15. THE WORLD BANK Next Next: Stay Tuned GIPB12 Coming up! Visit www.globalinvestmentpromotion.com 15