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Development Account Projects

International cooperation to develop a global monitoring system in national investment policies

Background:

Today, attracting and benefiting from FDI require both strengthening multilateral efforts to assist developing countries in overcoming the constraints that limit their attractiveness as a destination for foreign direct investment, and national efforts to devise active and well-sequenced policies to maximize the development benefits of investment flows. As a result of the global economic crisis, levels of FDI dwindled. However, since other flows of finance to developing countries have also declined, FDI remains the largest share of external capital flows to developing countries and is therefore crucial for financing a recovery from the global economic crisis and stimulating growth and stability.

With the view to further strengthen the capacity of developing countries' policy makers to attract and benefit from FDI there is a need to establish a global monitoring system to support national investment policies. This system would provide information on countries' FDI policies, laws and regulations, as well as in-depth analysis on the social, economic and development impact of such policies

The system will build on UNCTAD's existing methodology of collecting data on FDI policies. The new e-network based system will allow for comprehensive and sustainable monitoring of these policy developments, including through supporting independent analytical work and reporting at national level. The capacity-building quality of the system will be ensured through inaugural initiation seminars (held in conjunction with the Regional Commissions) and in-build online training elements.

Objective:

To improve the global, regional and national knowledge base on domestic investment policies and their impact on development to attract FDI and maximize development benefits.

Expected accomplishments:

  • Increased capacity of policy-makers in developing countries to formulate policies to attract and maximize the developmental benefits of FDI through an increased and improved access to verified, comprehensive and analyzed information on investment policies and their development implications;
  • Establishment of a global information system that will enable the international community and policy makers in developing countries to monitor and assess the impact of national investment policy development;
  • Establishment of an e-based network for sharing experiences and best practices (online discussion forum) between international and national investment policy makers, and others stakeholders.

Implementation status:

The project is at the intermediate stage. In the second half of 2012 the online platform for investment policymaking has been established: the Investment Policy Hub (http//investmentpolicyhub.org). The platform includes an online discussion forum where different stakeholders can meet and discuss best practices in national and international investment policymaking (A.1.2). Currently the site also includes a specific discussion forum on UNCTAD’s Investment Policy Framework for Sustainable Development (IPFSD) (A.1.1, 1.2 and A.2.2), a presentation of the Investment Policy Reviews (IPRs) (linked to A.2.2 and A.3) and public access to the UNCTAD’s database on bilateral investment treaties (BITs) (A.1.2). Furthermore, the internal database for the Investment Policy Monitor (IPM) (A.1.1, 1.2 and 1.3) has been finalized and work on the internal database for the Investment Policy Profiles (IPP) is in progress (A.1.2).

By early December 2012, the website has attracted over 6.000 visits of which almost 40% are returning visitors and has 190 registered users. However, full impact results can only be expected towards the end of (or after) the project period when the new public databases have been added to the website and a more structural promotion of the website has been set up. The internal database on investment policy measures continues to provide inputs for various reports, including UNCTAD’s World Investment Report and Investment Policy Monitor , and the joint UNCTAD-OECD-WTO Report on G20 Investment Measures .

Remaining activities include the finalization of the IPP database and development of the new international investment agreements (IIA) database, and the integration of all three (IPM, IIA and IPP) internal databases in the public website (A.1.2). The public website will also still receive a graphic makeover. The technical part of the project is expected to be finalized in the first half of 2013. Other remaining activities include the regional training and capacity-building workshops to disseminate methodologies for data collection and compilation of relevant information on national policies by designated national focal points (A.2.1).