The two day long Launch meeting started on 13th December 2001. The IFD Launch Meeting brought together all those who will be working on the two-year project along with international experts to debate on aims and scope of the project, current investment issues and discuss future project activities. On the first day, international experts discussed key issues for developing countries in relation to investment, which were investment and development, civil society concerns and investment environment. On the second day, international experts discussed international investment agreements & the project methodology and project partners presented their country research results so far. The meeting was divided into six sessions besides the inaugural session. The discussions at the Launch Meeting session by session are given below.

Inaugural Session

Speakers: Pradeep S Mehta, Secretary General, Consumer Unity and Trust Society (CUTS), India,

Vicki Harris, Head, Private Sector Policy Department (PSPD), Department for International Development (DFID), UK,

Khalil Hamdani, Chief, Investment Policies and Capacity-building (IPCB) Branch, Division on Investment, Technology and Enterprise Development (DITE), United Nations Conference for Trade and Development (UNCTAD), Geneva,

Arvind Mayaram, Secretary, Industries, Government of Rajasthan, India.

  • Welcoming the participants, Pradeep S Mehta, traced the history of establishment and growth of CUTS from a small rural communication initiative to an international-level organisation. He outlined the background of the project, its aims and expected outcomes.
  • Vicky Harris paid tribute to CUTS for its organisational capacity and outreach by way of publications. She informed that DFID attaches great importance to research and the areas of Investment and Competition are vital.
  • Hamdani presented a paper on “International investment rule making: overview, relevance and role of civil society, particularly non-governmental organisations”. He emphasised the importance of FDI for the developing countries that are presently unable to attract much of the same. UNCTAD, he said, is interested in strengthening the decision-making capacity of developing countries by engaging policy makers and civil society in the policy making process.
  • Mayaram welcomed all the participants to Jaipur on behalf of the state government and pointed out the importance of sound investment policies. He also shared his experience in dealing with investment issues in his capacity as Vice-President of the World Association of Investment Promotion Agencies (WAIPA).

Session I

Theme: Investment and Development
Chair: Allan Asher, Consumers Association, UK.

Speakers: Hans Christiansen, Principal Economist, OECD; Arvind Mayaram and Suman Bery, Director General, National Council of Applied Economic Research, India.

The speakers in general were of the opinion that FDI is important for development but beneficial effects of FDI depend on certain conditions such as policy environment, investor perception etc.

  • Hans discussed on “Benefits and Costs of FDI for Development” shedding light on the overall effect of FDI on macroeconomic growth and other welfare-enhancing processes and on the channels through which these benefits take place.
  • Mayaram spoke on “Making policies effective”. Historically developing countries have viewed FDI with suspicion but perceptions are changing now, he added. There is a growing realization that Policy and Regulatory reforms are roads for FDI- the smoother the road, the faster the benefits.
  • The title of Bery’s presentation was “Can Developing Countries use Foreign Investment to move up the Development Ladder.” He was of the opinion that of late developing economies have shifted their focus from the absolute level of investment to the productivity of investment and that such economies now welcome FDI as an important factor which contributes to economic growth through technology transfer and improved efficiency.

Session II

Theme: Civil Society Concerns and Ways to Address Them

Chair: Khalil Hamdani

Speakers: D.K. Chhangani, All India Trade Union Congress, India, Gurinder
S Gill, Bhartiya Mazdoor Sangh, India,
David Ong’olo, Economist, Kenya,
Allan Asher, Consumers Association, UK,
Diane Terblanche, Consumer Institute of South Africa,
Garth Le Pere, Institute for Global Dialogue, South Africa,
Leonido Funzamo, ProConsumers, Mozambique.

The speakers reflected on various concerns of civil society and labour unions vis-à-vis FDI such as lower employment intensity of FDI, labour displacement, environmental concerns, and consumer issues.

  • Chhangani and Gill spoke on “The impact of foreign direct investment on developing countries: trade union perspectives”. Chhangani said that transnational corporations (TNCs) may ask for implementation of “hire and fire” policy, which may affect the workers adversely. Gill said that the tendency of the TNCs is to acquire domestic companies, which could worsen the job scenario by reducing employment. Both the trade union representatives’ felt that changes in this direction undermine the goals of equitable development.
  • “International Investment and Environmental Issues” was the topic of Ong’olo’s presentation. He shared the experience of Kenya’s Kwale Mineral Sands Project, which has been taken up by a Canadian TNC called Tiomin. The company has been accused of commencing illegal mining operations and damaging the environment.
  • Asher presented a paper “Civil Society Concerns and Ways to Address Them: The Behaviour of Companies”, by focussing on the problems associated with global business conduct. He was of the opinion that all stakeholders must take responsibility in making the companies behave responsibly.
  • Terblanche spoke on “Consumer Perceptions.” She emphasised that consumers are unaware of competition policy and consumer protection and surveys have to be conducted to assess perceptions on legislation, policy and implementation.
  • Garth made a presentation on “Investment in SADC” region. The thrust of his presentation was on the current state of financial flows, tax regimes and transaction costs. He added that these are priority areas for national government to look at in the context of SADC.
  • Funzamo shared “Mozambique’s Experience in Attracting Beneficial FDI” by looking at the various polices and schemes introduced by the government.

Session III

Theme: The Investment Environment

Chair: Vicki Harris

Speakers: Shyam Khemani, Director, Law and Economic Consulting Group (LECG), France and Sebastian Morris, Indian Institute of Management, Ahmedabad.

The speakers highlighted the need to provide appropriate competitive environment and good infrastructure for attracting FDI into a country.

  • Khemani emphasised effective competition, as the key element which increases economic efficiency and productivity in his presentation, titled “Interface between Investment and Competition”.
  • Sebastian Morris discussed “Infrastructure and Foreign Direct Investment” in the historic context by examining the experiences of a few countries. He highlighted the importance of infrastructure in economic development and pointed out the various issues involved in privatisation of infrastructure.

Session IV

Theme: International Investment Agreements

Chair: Diane Terblanche

Speakers: B. Bhattacharyya, Indian Institute of Foreign Trade, New Delhi and Roger Nellist, Investment Climate and Competition Team, PSPD, DFID.

The speakers discussed on the developing countries’ point of view in supporting an international investment agreement (IIA) at the WTO.

  • Bhattacharyya presented the paper “International Investment Agreements in WTO”, in which he discussed the status of investment in WTO framework and future plans, concerns of and benefits for developing countries from an IIA at the WTO.
  • Nellist spoke on “Why Developing Countries should support an International Investment Agreement at the WTO”. He discussed the goals of signing an IIA at the WTO and how an IIA will help investors and developing countries.

Session V

Theme: National Investment Policy and Performance

Chair: David On’golo and Shyam Khemani

Speakers: Gustavo Rocha, NEIT, University of Campinas, Brazil,
Brendan Vickers, Institute for Global Dialogue, South Africa,
Stephen Muyakwa, Development Consultant, Zambia,
Lorah Madete, Economic and Social Research Foundation, Tanzania,
Ananya Raihan, Centre for Policy Dialogue, Bangladesh,
Biswatosh Saha, Indian Institute of Technology, Kharagpur and
Miklos Szanyi, Budapest University of Economics and Business Administration, Hungary.

The speakers presented the preliminary research reports of their respective countries. The reports outlined briefly the general macroeconomic scene in these countries for the last few years, overview of main policy trends, investment policy audit, areas of problems & potential areas for improvement and other issues like participation of civil society in policy making process.

Session VI

Theme: Working Group Discussion on Project Methodology, Closing Remarks And Way Forward

Chair: Pradeep S. Mehta

Speaker: Rakesh Basant, Indian Institute of Management, Ahmedabad,

Discussants: Roger Nellist and Khalil Hamdani.

The focus of the discussion in this session was on objectives, scope, research methodology, current investment issues and outcome of the project.

  • Basant discussed “Introduction: scope and scale on research on investment perceptions and performance”. He identified methodologies and approaches, which would help to achieve the objectives of the IFD project and discussed the form and scale of analysis of research results.
  • Hamdani suggested that the project report should be simple and policy-oriented.
  • After the presentation of Basant, a debate was generated on the aims of the project and other issues, particularly whether the project would look into domestic investment and reduction of poverty. It was clarified that the project focuses on FDI per se, not portfolio or domestic investment. These need to be mentioned to give a complete macro picture but are not the subject of the research. The research for IFD is also not concerned with demonstrating the link between FDI and poverty reduction.

  • Mr. Mehta thanked all the participants and expressed hope that the project plans would meet the expectations of all the stakeholders.