|
||
|
TWN
Info Service on UN Sustainable Development (Jun24/06) Geneva, 21 Jun (D. Ravi Kanth) — The Secretary-General of UN Trade and Development (formerly known as UNCTAD) on 20 June made the strongest pitch yet for “investment facilitation and digital government as tools to attract and retain investment”, despite these non-mandated plurilateral initiatives being opposed by developing countries at the World Trade Organization on both “systemic” and “procedural” grounds. At a press conference on 20 June, the UN Trade and Development head, Ms Rebeca Grynspan, launched the “World Investment Report 2024”, which appears to be replete with grim developments in the global investment landscape. However, she maintained that “by streamlining procedures, enhancing transparency and leveraging digital tools such as online single windows, we can foster a more conducive investment climate, particularly in developing countries.” The 164-page report covers several aspects concerning global investments, while laying emphasis on investment facilitation. GLOBAL FDI FLOWS In the first chapter highlighting international investment trends, the report said global foreign direct investment (FDI) decreased marginally last year, by 2 per cent, to $1.3 trillion. The report notes that “this headline figure was affected by wild swings in financial flows through a small number of European conduit economies; excluding the effect of these conduits, global FDI flows were more than 10 per cent lower than in 2022.” Given the challenges to international investment this year, the report noted that “weakening growth prospects, economic fracturing trends, trade and geopolitical tensions, industrial policies and supply chain diversification are reshaping FDI patterns, causing some multinational enterprises (MNEs) to adopt a cautious approach to overseas expansion.” While multilateral national companies enjoyed high profit levels, financing conditions are easing and increased greenfield project announcements in 2023 will positively affect FDI, it said, adding that modest growth for the full year appears possible. It also said that “international project finance and cross-border mergers and acquisitions (M&As) were especially weak in 2023. M&As, which mostly affect FDI in developed countries, fell by 46 per cent in value.” Further, according to the report, “project finance, important for infrastructure investment, was down 26 per cent.” It said that difficult “financing conditions, investor uncertainty, volatility in financial markets and – for M&As – tighter regulatory scrutiny were the principal causes of the decline.” PUSH FOR INVESTMENT FACILITATION In the “foreword” to the report, Ms Grynspan wrote that “digital business and investment facilitation is not merely a technical solution; it is a stepping stone towards wider digital government implementation, which can address underlying weaknesses in governance and institutions that often hinder investment and impede progress towards sustainable development.” “Investment facilitation,” she said, “while essential, is not a panacea for the challenges facing global investment flows”. However, she said that it is an “undeniable prerequisite for fostering an environment conducive to sustainable investment.” Later, in the section on “investment facilitation and digital government”, investment facilitation is touted as a “top priority for investment policymakers.” The report appears to have made some rather sweeping claims without hard evidence on the cost of commitments that developing countries will likely be compelled to undertake as part of an investment facilitation and digital trade agreement, said a UN official who asked not to be quoted. The report has made the following claims without providing concrete figures as to how many developing countries have followed the investment facilitation policies: 1. “Business and investment facilitation have become central to both private sector development and FDI attraction in developing countries”; 2. “At the core of facilitation efforts are information provision, transparent rules and regulations, and streamlined administrative procedures”; 3. “Business and investment facilitation have thus led to a wave of digital government initiatives, including information portals and online single windows”. Surprisingly, the claims made on investment facilitation seem incongruous with the range of sanctions imposed by Western countries on China, as well as the policies of “friend-shoring”, said a former UN official who asked not to be quoted. A former UNCTAD Secretary-General, Mr Rubens Ricupero from Brazil, had once said that UNCTAD works as a “trade union for developing countries” for assisting and helping them in addressing/tackling the uneven WTO agreement. The alleged unprecedented pitch for investment facilitation by an UNCTAD SG shows how the organization is apparently being navigated to promote the trade and investment agenda of the developed countries – who are referred to as the Group B countries in UNCTAD parlance, the official said. When asked at the press conference as to whether UN Trade and Development is now promoting the developed country initiatives such as investment facilitation, which is being currently opposed by major developing countries like India on both procedural and systemic grounds, Ms Grynspan said: “There may be reasons for India to have taken that position… We are not commenting on India’s position, they have also blocked other plurilateral agreements; they believe that this is not the right process to get to consensus.” To recall, developing countries have all along opposed investment facilitation, which was part of the four so- called “Singapore issues” – trade and investment, trade and competition policy, transparency in government procurement, and trade facilitation – since the WTO’s first ministerial meeting in Singapore in 1996. Later, developing countries rejected the so-called Multilateral Agreement on Investment that was pushed by the Paris-based Organization for Economic Cooperation and Development (OECD). Unlike the Trade Facilitation Agreement, investment facilitation was not part of the July 2004 package, and was opposed by India when China brought this issue to the WTO in 2016. In her reply to the question at the press conference, Ms Grynspan went on to say: “IF (investment facilitation) is important for FDI and also for national investments.” Elaborating further on IF, she said that “the position of UNCTAD has always been that without high levels of investment – one of the reasons for China’s development, is based on investment – … you cannot have high growth, and part of the problems that we have always said is the international architecture (for finance) is to have investment rights; you cannot grow without investment in infrastructure.” UN SDGs In her remarks, Ms Grynspan highlighted the importance of implementing the 17 United Nations Sustainable Development Goals (SDGs) on grounds that they aim to end poverty and hunger, improve health and well-being as well as investments in education, among others. When asked why UNCTAD is pushing for IF, which is not part of the SDGs, and that even though the SDGs did not call for investment facilitation in the chapter on “industry, innovation and infrastructure”, UNCTAD is pushing for this, she said that just “because SDGs don’t talk of investment facilitation, it does not mean we don’t invest in health and infrastructure.” “You need investments, otherwise how would countries grow, and developing countries [are] constrained by (lack) of investment,” she said, adding that there is a need for “reform of the international financial system.” Disagreeing with the question, she said that UNCTAD has been promoting IF for the past 20 years. Both the proposed non-mandated plurilateral digital trade and investment facilitation for development agreements are being pushed by China along with several industrialized and developing countries at the WTO’s upcoming General Council meeting before end-July. +
|
||
