GLOBAL INVESTMENT FORUM, ORGANIZED BY UNCTAD, STRESSES NEED FOR A HOLISTIC APPROACH TO FDI
Press Release
TAD/1837
GLOBAL INVESTMENT FORUM, ORGANIZED BY UNCTAD, STRESSES NEED FOR A HOLISTIC APPROACH TO FDI
19961016 (Delayed in transmission.)GENEVA, 11 October (UNCTAD) -- Over 300 government officials, business executives, non-governmental organizations, trade union representatives, academics and other civil society representatives participated in the one-day Global Investment Forum on foreign direct investment (FDI) and development organized by the United Nations Conference on Trade and Development (UNCTAD) on 10 October.
Among the Forum's conclusions was that there was a need for a more holistic approach to the question of costs and benefits of international investment. That issue should be addressed in the perspective of macroeconomic policies for development, both at the domestic and international level.
The Minister of Trade and Industry of South Africa and President of the ninth session of the Conference (UNCTAD IX), held in May in that country, Alec Erwin, said the Forum had provided lucid inputs in the international debate on the critical and controversial issue of a possible multilateral investment arrangement.
According to Mr. Erwin, who chaired the Forum, it was clear that the dialogue on the arguments in favour and against the need for a multilateral framework, and eventually its contents, must go on in the context of UNCTAD, in close cooperation with other relevant intergovernmental organizations.
During the deliberations, there was a strong feeling among ministers from some developing countries that more research and analysis was needed about the critical issues at stake in a multilateral framework on investment before bringing the subject to a rule-making body such as the World Trade Organization.
Representatives of the business sector, on the other hand, urged that negotiations on an international investment framework be launched in the near future. Maria Livanos Cattaui, Secretary-General, International Chamber of Commerce, and Douglas Gregory, Senior Adviser, International Trade and Investment, IBM Canada, called for governments to recognize the benefits of FDI by transnational corporations, to remove obstacles in the path of inward
flows of private investment to their countries, and for an early start of negotiations on a multinational investment agreement.
The Forum brought to the fore the increasing linkages between trade and investment. For example, an Assistant Minister of China, which accounts for the lion share in FDI flows to developing countries, stated that his country's overall foreign trade volume had risen sharply, with the share of foreign affiliates in that trade now accounting for about 40 per cent.
Many speakers stressed the complexity of the issues related to the effects of economic policy liberalization on the quality, quantity and distribution of FDI, and its impact on development. Both developed and developing countries urged UNCTAD to undertake more policy-oriented research in that field.
Mr. Erwin noted that the matter was clearly part of the new mandate of UNCTAD, following the ninth session of the Conference, which had called on UNCTAD to assist the developing countries to fully prepare for the complexities and the challenges that regional and multilateral negotiations can involve. He stressed that investment had become a central issue on the agenda of UNCTAD and indeed of the dynamics of the global economy.
The initiative of the Secretary-General of UNCTAD, Rubens Ricupero, of convening the Forum, was praised as an unprecedented opportunity for people from very different backgrounds and perspectives to interact on that crucial issue at a critical time, two months before the ministerial conference of the World Trade Organization in Singapore.
The UNCTAD Secretary-General said that the Forum achieved its prime goal of assisting governments to broaden understanding of the critical trends and issues in global investment today. Those discussions would help governments to prepare for the Singapore meeting. He added that FDI was growing more rapidly than global trade, and that many of the speakers at the Forum recognized that the time had come for investment to be seen as the full partner of trade in global commerce negotiations.
At the same time, he said that it was also clear that numerous governments were not yet adequately prepared to enter negotiations on a multilateral investment framework. The Forum brought to the fore the complexity of that issue and the concerns that many governments had that FDI be channelled in ways that ensure the maximum contribution to social and economic development in developing countries.
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Note: For more information, please contact Karl Sauvant, Chief, Research and Policy Analysis Branch, Division on Investment, Enterprise Development and Technology, UNCTAD, tel: 41 22 907 57 07; fax: 41 22 907 01 94; or e-mail: karl.sauvant@unctad.org.