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Development Account Projects

Capacity-building in developing countries to attract and benefit from international investment


FDI has become an important factor in the economic growth of developing countries and a new instrument for the integration of countries into the global economy. Attracting and managing FDI is therefore an important strategy for economic development. However, without the requisite knowledge or capacity to engage in international investment rulemaking and to evaluate and modernize national investment policies, many developing countries will continue to face difficulties in integrating into the global markets and will remain unable to attract the type of investment most suited to enhancing development.

Given that FDI issues are closely interwoven with domestic policy matters, the link between national policies and international engagement remains crucial to the enhancement of the development dimension. Thus, there is a need to strengthen national capacity to continuously update and improve the investment policy framework. This can be achieved by building an interactive Internet-based investment policies network among policy makers from developing countries and by strengthening the participation of developing countries in international investment forums.


To build the human resource and institutional capacity in developing countries to enable these countries to attract and benefit from international investment. Specifically, the project seeks: to build capacity among policy-makers and negotiators from developing countries to improve the national policy, regulatory and institutional framework relating to foreign direct investment (FDI) through Internet-based training courses and through national and regional workshops; to improve their ability to participate as effectively as possible in discussions and negotiations of international investment agreements, as well as to provide training on these issues; and to establish a network of expertise in developing countries on issues related to international investment agreements

Expected accomplishments:

  • Enhanced capability of professionals in developing countries to better understand the issues involved in negotiations on international investment agreement, for example, the range of issues that need to be considered and, in particular, the need to ensure that the development dimension is duly addressed
  • Improved capacity at the national level to develop and manage national investment policies; the establishment of an international support framework for investment policy reviews, aimed at exchanging information on best practices, particularly through enhanced institutional linkages at the national and regional level; local institutions and universities benefiting from the valuable and up-to-date information contained in the investment policy reviews and the project site, in particular on evaluation analysis and needs assessment on national FDI regimes; and improved understanding of the diversity of investment policy experiences
  • Strengthened capacity of negotiators and trainers from developing countries to participate effectively in the formulation, identification and analysis of the issues, alternative scenarios and other aspects concerning the negotiation of the agreements. As part of the project, a network of expertise in developing countries will be established, consisting of the trained negotiators, trainers and regional faculty, who will build and maintain their own electronic linkages.

Effects and Impact:

The project improved capacity of policy-makers at the national level to develop effective investment policies and enhanced their ability to participate in discussions and negotiations of international investment agreements. The project strengthened the capacity of beneficiary developing countries' negotiators to understand better international investment rule making and participate effectively in discussions and negotiations of international investment agreements, in particular through enhanced capacity for formulation of international investment agreements in which development dimensions are adequately addressed. Furthermore, the project activities allowed policy-makers, negotiators and experts from government institutions and academia from developing countries to gain experience and insights into: assessing the strengths and the weaknesses of their investment policy/climate in comparison with other countries and regions, and in relation to their own development objectives through the use of interactive databases; understanding the strategic decision-making process of foreign investors to locate in a foreign country; and the importance of proactive policies building closer ties at national and international level with different stakeholders; understanding key issues in IIAs, how they interact with each other, and how they need to be formulated to ensure that the development dimension is adequately addressed.

The project developed an Internet-based interactive database "Investment Compass" to benchmark the investment environment based on best practices. The database includes 52 developing countries (of which 18 LDCs); a network of 1350 institutions from governments (48 per cent in developing countries), international and non-government organizations, universities and private sector has been established.