Foreign Direct Investment

At the Third International Conference on Financing for Development in the Addis Ababa Action Agenda (AAAA), world leaders pledged to: “to adopt and implement investment promotion regimes for LDCs [and] offer financial and technical support for (…) access to information on investment facilities and risk insurance and guarantees such as through MIGA, as requested by the LDCs.” This study examines existing political investment insurance programs and related risk management facilities for foreign investment, in particular those of the Multilateral Investment Guarantee Agency (MIGA), as they app

This paper focuses on what the development partners of least developed countries (LDCs) can do to help those countries get more ‘sustainable’ foreign investment - investment that contributes to their sustainable development - and indicates some options for support that need to be further explored. It addresses the investment attraction measures that LDCs themselves can take only in as far these can be supported by development partners.

The purpose of this occasional policy papers series, published by the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), is to analyse policy issues relating to the development of the least developed countries (LDCs), stimulate discussions and promote international cooperation. In keeping with this objective, the authors are encouraged to express their own views, which do not necessarily reflect the views of the United Nations or its member States.

Foreign direct investment (FDI) plays an important role in the world economy today and has the potential to contribute towards accelerating the process of economic growth and sustainable development in the least developed countries (LDCs). The Istanbul programme of Action for the LDCs stresses that “policies to attract and retain foreign investment are essential components of national development strategies.”