FROM INVESTMENT POLICY DESIGN TO IMPLEMENTATION:

MAKING INVESTMENT CLIMATE REFORMS HAPPEN

COLLABORATION BETWEEN

THE OECD AND WBG

April 20, 2015

Outline

I. OECD’s Investment Work

II. WBG Trade and Competitiveness Investment Policy & Promotion Work

III. OECD and WBG Collaboration

1

Outline

I. OECD’s Investment Work

II. WBG Trade and Competitiveness Investment Policy & Promotion Work

III. OECD and WBG Collaboration

2

Improving the Investment Climate – OECD Investment

Work

Policy Framework for Investment

Investment Policy Reviews

Regional cooperation on investment reform

• Southern African Development Community (SADC)

• Association of Southeast Asian Nations (ASEAN)

Sectoral work

• Policy Guidance for Investment in Clean Energy Infrastructure

• Private Participation on infrastructure investment

3

Horizontal issues

Investment policy

Investment promotion and

facilitation

Trade

Competition

Tax

Corporate governance

Policies for enabling

responsible business conduct

Developing human

resources for investment

Public governance

Infrastructure investment

Investment framework for green growth

Financing investment

A tool for investment climate reform taking into account

different dimensions of development

SocialEnvironmental

Economic

The 2015

Policy

Framework for

Investment

4

Our Objective – A Sound Enabling Environment for

Domestic and Foreign Investment

Mitigating

investor risk

A sound enabling environment

Integrated

frameworks

Participatory

approaches for

better policy

coherence

Full country-

ownership

Investment Policy Review: Recommendation

5

OECD Support to Investment Climate Reform

Toward Implementation

OECD assessment – Investment Policy Reviews

• Peer learning (regional, across regions, OECD

non-OECD)

• Translation of recommendations into operation

activities

• Measuring and Monitoring: Development of

indicators

=> Partnership with development partners to support and execute reforms

6

Outline

I. OECD’s Investment Work

II. WBG Trade and Competitiveness Investment Policy & Promotion Work

III. OECD and WBG Collaboration

7

Investment Policy and Promotion (IPP): Three Key Ideas

Investment policy is not about choosing between foreign and

domestic investment

It is about connecting them through global value chains. Trade and investment are

two sides of the same coin.

1

Foreign investment is not a transaction; it is a relationship

An investment policy strategy should not only pursue attraction, but also enable the

establishment, retention and linkages with the domestic productive sector, thereby

maximizing benefits from investment.

2

Not all types of investment are the same

Different types of investment have different effects on socio-economic development

and thus require different policies. Countries should align the type of investment with

different policies

3

8

Investment Cycle

Vision and Strategy

Investment AttractionLinkages

Investment Entry &

EstablishmentRetaining Investment

• Investment promotion

• Locational incentives

• Eliminating barriers to FDI

• Streamlining entry procedures

• Elimination of performance requirement

• Opening FDI in services

• Behavioral incentives

• Non-equity modes of investment (NEM)

• Upgrading investment protection guarantees

• Mechanizing investment retention and confidence

• Improving investment aftercare

9

Different Types of Investment Lead to Different Socio-

Economic Impacts and Different Patterns of Trade…

Natural resource-seeking

Market-seeking

Efficiency-seeking

Strategic-asset

seeking

9

Assistance Delivery Model

Outcomes

• Updating regulatory

frameworks

• Streamlining

administrative and

regulatory frameworks

• Developing systems that

foster transparency and

predictability.

• Incorporation of new

technologies to improve

government delivery of

services

Activities

• Assisting governments

in identifying and

prioritizing investment

policy and promotion

measures

• Concrete

recommendations

• Supervision/implement

ation support

Impacts

• Increase in generation

of domestic and

foreign investment

• Increase in investment

retained

• Cost savings for

investors and host

countries resulting

from reforms

• Greater regulatory

transparency and

strengthening of rule of

law

10

Our mission is to catalyze investment climate reforms that foster business competitiveness, connect firms to global markets, maximize the benefits of private investment, and create jobs.

WBG Instruments of Support

• Developing FDI strategy

• Reducing investment restrictions, barriers and procedures

• Investment promotion/facilitation

• Improving effectiveness of investment incentives

• Strengthening investor protection and aftercare to help retain and expand FDI

• Maximizing linkages and positive spillovers to local economy

• Promoting freer regional investment flows

• Implementation of international agreements to improve investment climate

Technical Assistance

• Investment Reform Map:

Providing a logical framework

enabling clients to visualize the

different types of FDI and

setting priorities to design

coherent and concrete

investment policy and

promotion reform agendas

• Rapid IC Advisory: Supporting

IC reforms leveraging

benchmarks and indicators

Doing Business

FDI regulations

Investor motivation surveys

World Investment and

Political Risk Indicators

Enterprise surveys

Diagnostics

• Mozambique Competitiveness and PSD Project ($25million):

Focusing on business environment/investment climate reforms, SME matching grant facility, training institutes capacity, etc.

IC TA program to government for the design and implementation of licensing reforms in key sectors (industry and commerce).

• Ethiopia ($250million):

Contributing to job creation by attracting investments and improving enterprise competitiveness in the target industrial zones and linked domestic enterprises.

Lending

(Development Policy Operations and Investment Lending)

11

Global Presence (in over 60 countries)

Africa ECA MNA EAP SA LAC

Current • Guinea• East Africa

(multiple countries)

• Ethiopia• Kenya• South Sudan• Regional

Program for West Africa (multiplecountries)

• EquatorialGuinea

• Armenia• Albania• Belarus• Bosnia and

Herzegovina• Georgia• Kosovo• Kazakhstan• Kyrgyzstan• Tajikistan• Turkey • Turkmenistan

• Egypt• Jordan• Kingdom of

Saudi Arabia• Kuwait• Oman• Tunisia• Morocco

• Cambodia• Mongolia• Myanmar• Pacific Islands

• Bangladesh• Pakistan• Nepal• India• Bhutan

• DominicanRepublic

• Mexico• Colombia• Bolivia• Brazil• El Salvador

Pipeline • Croatia• Moldova• Western

Balkans (multiple countries)

• Romania

• Egypt • Timor Leste• Laos

• Iraq • Peru• Paraguay• Mexico• Colombia

12

Outline

I. OECD’s Investment Work

II. WBG Trade and Competitiveness Investment Policy & Promotion Work

III. OECD and WBG Collaboration

13

OECD and World Bank Collaboration

Interaction and information sharing on each other’s activities:

• PFI taskforce: IPP team collaborates and contributes to the PFI update

• WBG Investment Climate Advisory Group: OECD investment team invited to join

Technical assistance to countries:

Coordination between PFI and T&C IPP Reform Work in various countries:

• ASEAN: Myanmar, Cambodia, Laos

• MENA: Tunisia, Jordan and Egypt

Thought leadership:

Joint exploration and discussion of cutting-edge issues on investment climate-related

issues

Policy advocacy:

Organization and participation in events to promote greater engagement with investment

stakeholders

14

Examples: OECD - World Bank Group Cooperation in

Myanmar

• OECD introduces Myanmar investment climate counterparts to WBG

• WBG participation in assessment, task force meetings

• WBG participation in public launching of the IPR of Myanmar

Myanmar IPR

• WBG formulation of a technical assistance programme based on the IPR recommendations and previous cooperation

Identification of areas of

implementation• Roll-out of WBG

and implemented country programme

• OECD contributes to specific elements of the programme

Program implementation

Work starting in Lao PDR and Cambodia in 2015

15

Examples: OECD - World Bank Group Cooperation in

Tunisia

• The WBG had ongoing projects on investment climate:

• Support on a new investment law according to good practices

• Transparency and inventory of investment incentives

• OECD also had capacity building initiatives in the country

Engagement

• Both institutions shared views/comments/updates on the process to modernize investment legal framework.

• OECD & WBG joint work on institutional mapping and design of institutional coordination framework for investment policy and promotion

Diagnostic

• WBG: New investment law

• OECD & WBG: Institutional coordination mechanism for IPP

Program implementation

16

Looking Forward

17

Creating an international platform on Investment for Development

• Post-2015 agenda – aid alone does not suffice

Roundtable on implementing policy reform for investment

• Convened by the WBG, the OECD, in conjunction with other

international organizations (October 2015)

THANK YOU