October 22, 2021
Introduction
Organised in collaboration with the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), this session highlighted Foreign Direct Investment (FDI) as an important potential source of development finance for Least Developed Countries (LDCs), which can be complementary to Official Development Assistance (ODA). Despite gradual improvements over the years in the legal and regulatory frameworks for investment in LDCs, the pandemic has been a shock and FDI inflows have been significantly affected. Further, the existing structural weaknesses have only been amplified. Many LDCs are highly dependent on investment in extractive industries, which has been negatively affected by oil and commodity price shocks, while others are dependent on the travel and tourism sectors which have been among the hardest hit by the crisis. In the light of this, the objective to achieve a truly inclusive and sustainable global economic recovery, providing support to institutions that promote investment towards LDCs is more important than ever.
Session Highlights
The session began with a recount of the horrors of the COVID-19 impact on global economies. In particular, the financial stress on LDCs was noted. On a positive note, the Panellists identified the pandemic as a window of opportunity to examine the approach to investment. With successful vaccination programs being rolled out all across the globe, it was discussed that the time for strategising for economic recovery has arrived. FDI plays a critical role in doing this, for it can promote vibrancy in the global economy and sustainable development. It has been recognised that investment opportunities in each country have to be aligned with the 17 Sustainable Development Goals (SDGs) set out in 2015 as a part of 2030 Agenda for Sustainable Development.
The discussion recognised that a shift from the traditional model is desperately required. Many speakers talked about a shift in their country’s prioritisation. There seemed to be a focus on investment promotion, e-registration and green and digital instruments. It was discussed that the state is heavily involved in curating attractive business opportunities and is steadily devising ways of investment promotion. A speaker mentioned that in their country, the state provides incentives to companies investing in their employees’ skill training, accessibility, transportation, canteen and other amenities. Similarly, a call for prioritising health, housing, education and other factors, resonated throughout the course of the discussion. It was pointed out that the approach should be regional as well as multilateral. Further, it was discussed that having a robust, cohesive and modern regulatory framework proves to be extremely beneficial as well. This shall assist in improving competitiveness, simplify procedures and also lay down clear guidelines for Public-Private Partnerships, among other things.
With regard to sustainable finance and financial instruments, economic diversification coupled with innovation was recognised as a way to strengthen the investment regime. Economies left fragile after COVID-19 specifically require an infusion of innovation that also emphasises on the LDCs, according to Panellists.
Contemplating on the way forward, the Panellists opined that:
- SMEs need to be recognised as the backbone and there must be efforts to include them in the global value chain,
- Ensure projects prioritise SDGs, and
- Focus on coordination between governments, Investment Promotion Agencies (IPAs).
Further, it was highlighted that conducting capacity building training programs is essential as intensive training for bringing structural reforms in the investment climate of LDCs is the need of the hour.
Opening:
- Ms.RebecaGrynspan, Secretary General, UNCTAD
On the panel were:
- Mr. Courtenay Rattray, UN Under Secretary General and High Representative, UN-OHRLLS
- H.E. Mr.TipuMunshi MP, Honorable Minister, Ministry of Commerce, Bangladesh
- H.E. Mr.SokChendaSophea, Minister attached to the Prime Minister, Secretary General of the Council of the Development of Cambodia, Cambodia
- H.E. Mr. Michel Patrick Boisvert, Minister of Economy and Finance, Republic of Haiti
- H.E. Ms.InáciaTeixeira, Vice Minister of Community and Cultural Tourism, Timor Leste
- H.E. Ms. Rose KayiMivedor, Minister of Investment Promotion, Republic of Togo
- Ms.MadalitsoKazembe, Chairperson, SADC Business Council
- Mr. Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework, World Trade Organisation
- Ms. Vera Songwe, Executive Secretary, United Nations Economic Commission for Africa
- Mr. Leonard Stiegeler, Member of the Board of Directors, Swiss African Business Circle
Moderator:
- Ms. Yvonne Okwara, Senior News Anchor, Kenyan Television