THE POLICY FRAMEWORK FOR THE POLICY FRAMEWORK FOR INVESTMENTINVESTMENT

Presentation by Pierre Presentation by Pierre PoretPoretHead, OECD Investment DivisionHead, OECD Investment Division

ASIA CONSULTATIVE CONFERENCE ONASIA CONSULTATIVE CONFERENCE ON““CREATING BETTER BUSINESS ENVIRONMENT FOR ENTERPRISE CREATING BETTER BUSINESS ENVIRONMENT FOR ENTERPRISE

DEVELOPMENT; ASIAN AND GLOBAL LESSONS FOR MORE DEVELOPMENT; ASIAN AND GLOBAL LESSONS FOR MORE EFFECTIVE DONOR PRACTICESEFFECTIVE DONOR PRACTICES””

Bangkok, 29 November Bangkok, 29 November –– 1 December 20061 December 2006

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CONTENTSCONTENTS

BACKGROUNDBACKGROUND

DISTINCTVE FEATURESDISTINCTVE FEATURES

WHO DEVELOPED THE PFI?WHO DEVELOPED THE PFI?

HOW CAN THE PFI BE USED?HOW CAN THE PFI BE USED?

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BACKGROUNDBACKGROUND

In 2002, the Monterrey UN Consensus recognised In 2002, the Monterrey UN Consensus recognised the key role of private investment for achieving the key role of private investment for achieving sustainable developmentsustainable development

In 2003, in Johannesburg OECD and nonIn 2003, in Johannesburg OECD and non--OECD OECD governments announced their intention to work governments announced their intention to work together to develop the Policy Framework for together to develop the Policy Framework for Investment (PFI)Investment (PFI)

In May 2006, the PFI was completed and OECD In May 2006, the PFI was completed and OECD Ministerial mandated continued coMinisterial mandated continued co--operation with operation with nonnon--member partners on implementationmember partners on implementation

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DOUBLE CHALLENGE FOR GOVERNMENTS:DOUBLE CHALLENGE FOR GOVERNMENTS:

Formulate the right policiesFormulate the right policiesImplement them effectivelyImplement them effectively

WAY FORWARD:WAY FORWARD:

Peer learning and sharing of experiencePeer learning and sharing of experienceWorking with international principlesWorking with international principlesNational ownership National ownership –– no no oneone--sizesize--fitsfits--allallMutual monitoringMutual monitoring

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THE PFITHE PFI……

…is the most comprehensive …is the most comprehensive multilaterallymultilaterally--backed instrument to date backed instrument to date for improving investment conditions;for improving investment conditions;

…covers 10 core policy areas;…covers 10 core policy areas;

…addresses 82 questions to governments …addresses 82 questions to governments to help them design and implement good to help them design and implement good policy practices and maximise the policy practices and maximise the benefits of investment. benefits of investment.

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DISTINCTIVE FEATURESDISTINCTIVE FEATURES

1.1. Good practice for allGood practice for all2.2. Development orientationDevelopment orientation3.3. Focus on domestic investment, but international Focus on domestic investment, but international

investment also coveredinvestment also covered4.4. Direct and indirect investment obstacles Direct and indirect investment obstacles 5.5. International and home country coInternational and home country co--operation operation

coveredcovered6.6. NonNon--prescriptiveprescriptive

7.7. Living toolLiving tool

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THE 10 PFI POLICY AREASTHE 10 PFI POLICY AREAS

1.1. Investment policyInvestment policy2.2. Investment promotion and facilitationInvestment promotion and facilitation3.3. Trade policyTrade policy4.4. Competition policyCompetition policy5.5. Tax policyTax policy6.6. Corporate governanceCorporate governance7.7. Policies for promoting responsible business Policies for promoting responsible business

conduct conduct 8.8. Infrastructure and financial sector Infrastructure and financial sector

developmentdevelopment9.9. Human resource development Human resource development 10.10. Public governancePublic governance

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THREE PRINCIPLES APPLY THREE PRINCIPLES APPLY THROUGHOUT THE 10 PFI CHAPTERSTHROUGHOUT THE 10 PFI CHAPTERS

1.1. Policy CoherencePolicy Coherence

2.2. Transparency and AccountabilityTransparency and Accountability

3.3. Regular Policy EvaluationRegular Policy Evaluation

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WHO DEVELOPED THE PFI?WHO DEVELOPED THE PFI?

Developed as a partnership process involving :Developed as a partnership process involving :

A task force of some 60 governments from A task force of some 60 governments from OECD and nonOECD and non--member economies member economies

Input from 8 Input from 8 specialisedspecialised OECD CommitteesOECD Committees

Business, Business, labourlabour, civil society representatives , civil society representatives

World Bank, UNCTAD and other international World Bank, UNCTAD and other international organisationsorganisations

Meetings in five regionsMeetings in five regions

WebWeb--based public consultationbased public consultation

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HOW CAN THE PFI BE USED?HOW CAN THE PFI BE USED?

SelfSelf--evaluation by governmentsevaluation by governments

Country peer reviewsCountry peer reviews

Regional coRegional co--operationoperation

PublicPublic--private dialogueprivate dialogue

Complement to policy guidance for ODA in Complement to policy guidance for ODA in support of private sector developmentsupport of private sector development

Recent examples: Egypt; Vietnam/APEC; Recent examples: Egypt; Vietnam/APEC; South East Europe Investment Reform South East Europe Investment Reform Index; NEPADIndex; NEPAD--OECD OECD

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IMPLEMENTATION SUPPORT FROM IMPLEMENTATION SUPPORT FROM THE OECDTHE OECD

A PFI Users Handbook is being developedA PFI Users Handbook is being developed

The format will be webThe format will be web--based and include:based and include:•• Options for the type of PFI use; its scope; the stage of Options for the type of PFI use; its scope; the stage of

investment climate reform; how to choose chapters to investment climate reform; how to choose chapters to focus on; whether to use a thematic approach;focus on; whether to use a thematic approach;

•• A compendium of country experience with PFI A compendium of country experience with PFI implementation;implementation;

•• Guidance on issues to address and possible indicators to Guidance on issues to address and possible indicators to examine in responding to PFI questions;examine in responding to PFI questions;

•• Options for Options for synthesisingsynthesising the results and measuring the results and measuring progress;progress;

•• Annexes with further resources and tools Annexes with further resources and tools

Users will be able to offer their own input and Users will be able to offer their own input and provide feedbackprovide feedback

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THE EXPECTED BENEFITSTHE EXPECTED BENEFITS

BetterBetter informedinformed decisiondecision--makingmaking

EnhancedEnhanced wholewhole--ofof--governmentgovernment sensitivitysensitivityto to investmentinvestment climateclimate issuesissues

AdjustmentsAdjustments in course in course ofof actionaction

PublicPublic--privateprivate mutualmutual trusttrust

More effective More effective aidaid

Visit PFI at: Visit PFI at: www.oecd.org/daf/investment/pfiwww.oecd.org/daf/investment/pfi