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Last updated: Feb 11, 2016

 

INVESTMENT CLIMATE

Investment for Development (IFD)

The ‘Investment For Development’ (IFD) Project aims to create awareness and build capacity on investment regimes and international investment issues in developing and transition economies. This two-year project, launched in September 2001, is being conducted by the Consumer Unity & Trust Society (CUTS), in collaboration with the United Nations Conference on Trade and Development (UNCTAD). It is supported by the Department for International Development (DFID) of the UK.

Background

Foreign Direct Investment (FDI) is being recognised widely as a potential source of financing for development. It is being seen as a principal channel for transfer of technological know-how and a potentially significant contributor to income and export growth and employment. Several governments are trying to create ‘enabling environments’ for investment, making changes in the national economic and institutional infrastructure, though their attempts have been met with varying degrees of success. FDI to developing countries has been increasing, but disproportionate shares have been going to a handful of countries.

Through the experience of selected countries, the IFD project attempts to identify the various factors that can encourage or inhibit investment flows, the problems or deficiencies that exist in the national investment regimes and plausible solutions for the same. An extremely important aspect of the project is involvement of stakeholder groups, including civil society representatives, throughout the process to create the necessary momentum for building an investment-friendly regime.

Investment-related regulations and codes of conduct have been under discussion at the multilateral level such as the WTO, UNCTAD and in other bodies for sometime now. In order to protect and promote their interests, it is felt by developing countries that they need to have adequate expertise and capacity to engage actively in negotiations and policy formulation. The IFD project aims to raise awareness and capabilities relating to investment among policy-makers, government officials, business, the media, civil society and other stakeholders.

Outline

The project involves fact-finding and advocacy work on investment regimes in seven developing & transition economies. The project has two components, research and advocacy.

The project focuses on the following countries: India, Bangladesh, Brazil, Hungary, South Africa, Tanzania and Zambia. The countries were selected to cover a range in terms of size, level of development, geographical location, macroeconomic characteristics (including least developed countries, lower- and upper-middle income countries), policy orientation and performance in terms of attracting FDI. The level of activity and capacity in civil society organisations was also taken into account.

The Launch Meeting of the project was held at Jaipur, on December 13-14, 2001.

 

Progress At A Glance