title: Investment facilitation for development: a new route to global investment governance
Creators: name: Berger, Axel
name: Gsell, Sebastian
name: Olekseyuk, Zoryana
Publisher: name: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)
publisherIdentifier: https://ror.org/01t3zke88
publisherIdentifierScheme: ROR
Year: 2019
Subjects: subject: Investition
subject: Governance
subject: Investment

description: While global investment needs are enormous in order to bolster the implementation of the
 2030 Agenda for Sustainable Development, developing countries are often excluded from
 global foreign direct investment (FDI) flows. Beyond economic fundamentals like market
 size, infrastructure and labour, the impediments to FDI in developing countries relate to
 the predictability, transparency and ease of the regulatory environment. In contrast, tax
 incentives and international investment agreements (IIAs) have been found to be less
 important (World Bank, 2018). To harness the advantages of FDI, it is critical that
 governments have policies and regulations in place that help to attract and retain FDI and
 enhance its contribution to sustainable development. The 2030 Agenda and the Addis Ababa
 Action Agenda, thus, call for appropriate international frameworks to support investments
 in developing countries. <br> In this context, the Joint Ministerial Statement on
 Investment Facilitation for Development adopted at the 11th Ministerial Conference of the
 World Trade Organization (WTO) in December 2017 called for the start of “structured
 discussions with the aim of developing a multilateral framework on investment
 facilitation”. Investment facilitation refers to a set of practical measures concerned
 with improving the transparency and predictability of investment frameworks, streamlining
 procedures related to foreign investors, and enhancing coordination and cooperation
 between stakeholders, such as host and home country government, foreign investors and
 domestic corporations, as well as societal actors. <br> Despite the deadlock in the WTO’s
 17-year-old Doha Round negotiations, the structured discussions on investment
 facilitation, which have been under way since March 2018, show that the members of the WTO
 take a strong interest in using the WTO as a platform to negotiate new international rules
 at the interface of trade and investment. In contrast to previous attempts by developed
 countries to establish multilateral rules for investment, the structured discussions are
 mainly driven by emerging and developing countries. Most of them have evolved over the
 past years into FDI host and home countries reflecting the changing geography of economic
 power in the world. Their increased role has led to a shift of policy agendas, focusing on
 practical measures to promote FDI in developing countries while excluding contentious
 issues such as investment liberalisation and protection, and investor–state dispute
 settlement (ISDS). <br> This policy brief provides an overview of the emerging policy
 debate about investment facilitation. We highlight that four key challenges need to be
 tackled in order to negotiate an investment facilitation framework (IFF) in the WTO that
 supports sustainable development: 
 

 
 There is a need to properly conceptualise the scope of investment facilitation as a
 basis for empirical analyses of the potential impact of a multilateral IFF.
 

 Many less- and least-developed countries do not yet participate in the structured
 discussions. It is necessary to enhance their capacity to participate in the structured
 discussions and address their specific concerns.

 In order to enhance the contribution of FDI to sustainable development it is necessary
 to support the development of governance mechanisms at the domestic level.

 It is key to ensure transparency towards countries not yet participating in the
 discussions, the business sector and societal actors to support a successful policy
 process.
description: Briefing Paper, 5/2019