Foreign Direct Investment: attract more to benefit more Khalil Hamdani Istanbul, 20 November 2013.
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Transcript of Foreign Direct Investment: attract more to benefit more Khalil Hamdani Istanbul, 20 November 2013.
Foreign Direct Investment:attract more to benefit more
Khalil HamdaniIstanbul, 20 November 2013
OIC countries can be more active in FDI (UNCTAD data, inflows, billions of dollars)
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
WorldDeveloping coountriesOIC countries
OIC countries are now more open to FDI (UNCTAD data, inflows, percent of GDP)
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
0
1
2
3
4
OIC countriesDeveloping countries
OIC country experiences vary by region(UNCTAD data, inflows per capita, dollars)
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
$0
$50
$100
$150
$200
$250
$300
$350
ASIA (8) MENA (19)SSA (22) Economies in transition (7)
African members rely on FDI more for capital formation(UNCTAD data, inflows, percent of gross fixed capital investment)
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
5
10
15
20
25
30
35
40
ASIA (8) MENA (19)SSA (22) Economies in transition (7)
Largest OIC recipients of FDI
Largest OIC providers of FDI
Intra-OIC FDI: acquisitions have slowed (UNCTAD data, billions of dollars)
Intra-OIC FDI: main buyers (cross-border acquisitions)
Intra-OIC FDI: main locations(cross-border acquisitions)
Intra-OIC FDI: greenfield projects(UNCTAD data, estimated capital expenditure, billions of dollars)
world
Intra-OIC FDI: main industries(UNCTAD data, greenfield projects, 2003-2012, capital expenditure, billions of
dollars)
Intra-OIC FDI played an important role(UNCTAD data, billions of dollars)
2000
2002
2004
2006
2008
2010
2012
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
OIC FDI inflowsOIC FDI outflowsIntra-OIC FDI (es-timated by author)
OIC countries can be more active on outward FDI (UNCTAD data, outflows, percent of GDP)
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
0
0.5
1
1.5
2
2.5
Developing countriesOIC countries
Intra-OIC FDI potential: current account surplus (UNCTAD data, billions of dollars)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
More open investment policies
• Reduction of barriers to FDI(opening up more sectors to foreign investment, lifting of ownership restrictions, employment of non-nationals, etc)
• Strengthening of standards of treatment (national treatment, legal protection to foreign investors, etc)
• Enhancing the functioning of the market(supervision of banking and financial services, protection of intellectual property rights, environmental standards, etc)
• Investment promotion and facilitation (image building, one-stop service, aftercare, policy advocacy, etc)
• Incentives
An improved investment climate
Linkages policies and programmes
Strengthening hard and soft infrastructure
Strategic FDI attraction
Strategic policy coordination
Source: Altenburg, 2005.
Investment strategy
Investment strategy: an example
• Shift from a natural resource-based to a knowledge-based economy• Diversify industrial base • Target biotechnology, pharmaceuticals and petrochemical products
• Encourage SMEs and entrepreneurship development
• Develop clusters of knowledge-based activities
BACKWARD
SUPPLIERS
FORWARD
CONSUMERSTNC
Work with existing investors
PRODUCT STEWARDSHIP
SUPPLY CHAIN MANAGEMENT
A A A
Improved productivityHigher incomes for suppliers Reduced costs for company
Better products for consumers Enlarged market share for company
The greater the linkages between foreign affiliates and local enterprises and public institutions, the greater the spillovers into the domestic economy.
Enhancing FDI benefits
Channels Education and training Support for SMEs Backward linkages Linkages with technology
partners Forward linkages with
customers
Participation in global supply chains
Outward investment
Benefits
Production efficiency Productivity growth Technological and
managerial capabilities Entrepreneurial activity Market diversification Upgrading of production Export growth
Incentives
Carefully targeted, strategic incentive packages may be relevant and useful to:
• enhance the benefits from investment and trade in extractive industries.
• diversify industrial and export base.• attract FDI into infrastructure, manufacturing and services.
• create linkages between FDI and domestic investment.
Recommendations• encourage investment among the OIC countries, through
intergovernmental agreements, financing facilities and joint investment projects to improve cross-border transactions and infrastructure.• Mandate your envoys in OIC countries to promote intra-OIC FDI.
• expand knowledge sharing within the OIC on FDI, using existing institutions and involving private sector. • Intensify cooperation among investment promotion agencies.
• generate reliable data on FDI at the country level that is comparable across OIC countries in conformity with international standards.
Intra-OIC FDI, trade and development (UNCTAD data, current account net, 2012, billions of dollars, for 57 OIC countries)
-$50,000
$0
$50,000
$100,000
$150,000
Intra-OIC FDI
Intra-OIC
trade and
development