FDI Promotion & Facilitation

The Handbook on FDI Policy, Promotion and Facilitation for Sustainable Development in Asia and the Pacific seeks to take stock of the findings on and experiences with inward FDI and to summarize them in a convenient package that helps policymakers formulate better FDI policies and investment promotion agencies (IPAs) to better promote and facilitate FDI for sustainable development. Better FDI policies means policies that help attract higher inflows of FDI of higher quality and higher development impact across the three dimensions of sustainable development: economic, s

Foreign direct investment (FDI) can contribute to the sustainable development of home and host countries through creating jobs, generating economic growth and development, helping to alleviate poverty eradication, improving access to energy, infrastructure, health and environment.

This report analyzes how emerging market firms upgrade their capabilities to become leading global competitors, suggesting the use of foreign investments as an upgrading mechanism in global value chains. The report introduces a typology of global value chain upgrading strategies based on two dimensions: the type of global value chain expansion followed by the emerging market firm (repetition or extension), and the governance relationships between emerging market firms and advanced country lead firms (collaborators or autonomous).

Globally, both FDI inflows and outflows started to recover in 2019, with the former growing 30% to $1.5 billion and the latter increasing by 33% to $1.3 billion. However, the COVID-19 pandemic has caused global FDI flows to drop by 49% in the first two quarters of 2020 compared to the same period in 2019. Asia-Pacific’s share in global FDI inflows dropped from 45% in 2018 to 35% in 2019, and its share in global FDI outflows decelerated from 52% to 41%.

Foreign direct investment (FDI) is a principal means of financing the 2030 Agenda for Sustainable Development and the corresponding 17 Sustainable Development Goals. FDI’s potential contributions to sustainable development in Asia-Pacific can only be realized if the right conditions and policies are in place and if both the quantity and quality of FDI to, from, and within the region increase. This requires not only identifying and prioritizing FDI projects in key sustainable development sectors - such as renewable energy, education, health, water and sanitation, etc.

ABSTRACT

A growing body of research has developed since the global economic and financial crisis analyzing the relationship between NTMs and trade. However, much less attention has been dedicated to investigating the relationship between NTMs and foreign direct investment (FDI).

The Asia-Pacific Trade and Investment Report (APTIR) is a recurrent publication prepared by the Trade, Investment and Innovation Division of the United Nations Economic and Social Commission for Asia and the Pacific. It provides information and independent analyses of regional trends and policy developments in trade, goods and commercial services, as well as foreign direct investment. It also provides insights into the impacts of these recent and emerging developments on countries’ abilities to meet the challenges of achieving sustainable development.

The Asia-Pacific Trade and Investment Report (APTIR) is a recurrent publication prepared by the Trade, Investment and Innovation Division of the United Nations Economic and Social Commission for Asia and the Pacific. It provides information on and independent analyses of regional trends and policy developments in trade in goods and commercial services, as well as foreign direct investment. It also provides insights into the impacts of these recent and emerging developments on countries’ abilities to meet the challenges of achieving sustainable development.