UNCTAD’s Investment Policy Frameworkfor Sustainable Development

World Development Report 2012

A comment byBhanupong NidhiprabhaThammasat University

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FDI Trends and Prospects

• FDI inflows reached new records in 2011, increased by 26 per cent

• Particularly in Brunei, Indonesia, Malaysia, and Singapore

• Share of inflows of Thailand’s FDI: Lost opportunity

• Implication from macroeconomic perspective: capital flows structure, productivity, poverty reduction, and competitiveness

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FDI outflows

• FDI outflows from East Asia dropped by 9 %: Hong Kong and China declined by 15%

• From South-East Asia rose 36 %• Outflows from Indonesia and Thailand surged.• Reasons?• Implication?

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UNCTAD’s IPFSD

• A new generation of national and international investment policy making for inclusive growth and sustainable development

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On Core Principles

• It is an excellent policy framework: 11 commandments for FDI and DI

• Timely launched just in time for a newly opened economy

• Theory and practice• Caveat: Beware of unscrupulous politicians

with vested business interests.

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National Investment Policy Guidelines

• Integrating investment policy in development strategy: Policy coherence for productive capacity building• Attention to investment policy

options for the protection of sensitive industries

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National Investment Policy Guidelines

• Ensuring investment policy relevance and effectiveness of specific measures quantitative investment impact, FDI Attraction and Contribution Indices

• SMART goals (specific, measurable, aligned, reachable, and time bounded)

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How to operationalize SD objectives

• To attract responsible foreign investment • By offering incentives for

sustainable-development friendly outward investment and compliance with applicable CRS standards

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Further comments

• The role of public investment: Complementary or competitive.• Public investment in health and

education• FDI and Regional integration: AEC

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Further comments

• FDI and production network trade• FDI and spillovers from linkages to

domestic firms• FDI and poverty reduction• FDI and quality of institutions and

governance (crowding out or crowding in)