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TRANSCRIPT
Promoting Sustainable Investments:Modern approaches to Investment Promotion
Roberto Echandi
WAIPA Conference
Istanbul, October 14, 2016
Cross-border Investment:
• Changing motivations
• Flowing in new directions
• Driven by new actors
• Evolving in composition
• Using different modalities
• Being increasingly regulated by patchy framework of international investment agreements (IIAs)
Critical to understand the changing paradigms affecting
cross-border investments
These developments
entail the need
for countries to
rethink the role and
nature of
Investment promotion
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Investment policy should not be about choosing between foreign and domestic investment, but rather about
connecting them
Investment policy and promotion should go beyond investment attraction…
Not all types of foreign direct investment are the same, need for more specific policy mixes
Integrating Investment Policy and
Promotion Solutions…
Going beyond investment attraction…
Vision and Strategy
Investment Attraction
Investment EntryInvestment Retention
& Protection
Linkages & Spillovers
Not all FDI is the same, nor react the same to investment
promotion strategies nor generate the same socio-economic
impacts
Natural resource-seeking
Market-seeking
Efficiency-seeking
Strategic-asset
seeking
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Investment Promotion is a key function that can help to deliver a broader Investment
Vision and Strategy integrating host country to the world
Investment Vision
and Investment
Strategy (IRM)
Going beyond attraction, fully integrating investment
promotion throughout the investment cycle
A host economy articulates
a coherent investment
policy AND investment
promotion strategy
Tools
Investment
Promotion
IPAs’ mandates, functions,
strategic plans and activities
are directly derived from the
host country’s vision.
Closely connected to
incentives and strategic
planning, Investment
Promotion plays a role in
every stage of the cycle.
Vision & Strategy
Attraction
Entry & Establishment
Retention & Expansion
Linkages & Spillovers
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Marketing
Information
Assistance
Advocacy
Information
Assistance
Advocacy
Marketing
Information
Assistance in retention
Advocacy
Information
Assistance in matchmaking
Advocacy
IPAs provide investor services
at each stage
Key implications for effective investment promotion
1. Investment Promotion and Policy should be formulated within an integrated lens
Policy/Strategy (and Investment Promotion strategy) helps them make choices,
defining the institutions needed for the task, the services they need to provide to
investors and the sequencing/phasing
2. Promotion is not only about investment attraction, but also about assisting investors
during the establishment, retention, expansion and linking FDI in the host country
Promotion strategies should be framed within broader investment and economic
policies integrating the host country into the international economy
3. Investment promotion requires service-oriented intermediary with a marketing
specialization and focus on targeted investors/segments
Countries must evolve towards having a professional and dedicated investment
promotion agency or IPA (at least a dedicated IPA unit within those offered by IPIs)
IPAs are a bridge between investors and government. They interpret and communicate
policy to investors, while providing evidence and advocating for reform
IPAs (or the IPA unit within an IPI) should operate with institutional flexibility/autonomy,
have personnel with a private sector mindset/experience, coordinate with public and
private partners and stakeholders to provide services to investors.
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High quality investor services are essential to overcome
the challenges investors face
Poor provision of services to investors
Investors do not location because of
lack of information or poor image perceptions
Investors consider location but drop it from the short list because of lack of
information/assistance
Investors decide against location
because process of establishment and
operation is too difficult
Investors stop expanding or withdraw their investments from
the location
Investors do not connect with local
businesses
Addressed by IPAs
providing …...
Marketing Services Information Services Assistance services Advocacy services
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The full array of investor services shows on this 4x4 matrix
More granularity on
the different
services provided
by IPAs and a new
classification under
a new matrix taking
into account the
investment cycle
and the 4 key areas
in which IPAs work.
Stages of the Investment Cycle:
Categories
of IPA
services:
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Four big buckets matrix
Investment
attraction
Investment
entry
Retaining /
expansion
investment
Linkages &
spillovers
Bucket 1:
Marketing services
Bucket 2:
Information services
Bucket 3:
Facilitation services
Bucket 4:
Policy advocacy
Marketing:
Services offered in the attraction and
persuasion of investors:
• Image building
• Investor outreach
Information:
Provision of information on the location:
Inquiry handling
Basic research and market intelligence
Advanced market research
Assistance:
Services facilitating investor persuasion,
entry and establishment:
Initial investor contacts
Pre-site visit arrangements
Site visits
Facilitating decision to invest
Individual investor troubleshooting
Advocacy:
Services on behalf of investors advocating
for policy reform for better business
environment:
Collecting information on problem areas
within business environment
Feeding recommendations back to
government on reform options
Evolving as the IPA moves from from basic to advanced services …………
… which IPAs can package for maximum effectiveness
Focus on investors’ services provides more granularity to the traditional
terminology referring to outreach, facilitation, aftercare and “policy advocacy”
IPAs need to make choices as to the range and depth of services offered …..
establish programs to package services to provide value to investors
Outreach
and
facilitationAftercare
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Investment promotion supports clients within three work streams
Strategy
• Formulating FDI and Investment promotion strategy within an integrated Investment Policy and Promotion Approach
Institutions
• IPA creation and reorganization
• IPI-to-IPA transition
• IPA strengthening
• Wider investment promotion institutional landscape
• National and subnational coordination framework establishment or strengthening
Investor Services
• IPA service offering: design and implementation (following the 4x4 with (i) marketing (ii) information, (iii) assistance; and (iv) advocacy
• Standard Operating Procedures, IRMS/CRM, systems, website implementation
• M&E/KPI design and establishment
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And ending with strong M&E Framework to measure
success
Reform area Reform description
A Reforms improving investment promotion strategy
Establishing/improving investment promotion strategy Investment Promotion Strategy is adopted or improved by IPA
in terms of strategic alignment, quality, focus, and
sequencing.
B Reforms improving the institutional framework for
investment promotion
1. Creating/strengthening investment-related
agency/intermediary (IPA)
1. IPA is legally created, established or strengthened to:
a. Improve the level of autonomy;
b. Strengthen investment promotion mandate;
c. Improve governance;
d. Improve organizational structure, internal reporting lines
and operating procedures;
e. Improve results orientation;
f. Improve budget and secure funding.
2. Improving coordination among agencies involved in
investment promotion
2.Investment promotion mandates across relevant agencies
are better aligned and formal coordination mechanisms are
established and functional.
C. Reforms improving investor services
Establishing/improving investment promotion services
provided to investors
Investment promotion services provided during the
investment lifecycle are upgraded in at least 2 of the following
areas:
a. Buckets of services: Marketing, Information, Assistance,
Advocacy
b. Programs: Outreach, Facilitation, Aftercare, Advocacy
c. Systems: SOP, IRMS/CRM, M&E/KPI, Website,
INSTITUTIONS/
IPAs
SERVICES
STRATEGIES,
(link to IRM)
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