Foreign direct investment (FDI) is both a driver and barometer of globalisation and recent global declines in FDI, as well as a trend towards geo-economic fragmentation, have sparked understandable fears about a retreat to protectionism.
UNCTAD’s latest World Investment Report, an authoritative source of information on global FDI data and trends released in June 2023, revealed an uncertain current environment for FDI. Though greenfield investment project numbers increased globally, volumes of FDI declined by -12% in 2022.
Most worryingly, inflows to some of the world’s most vulnerable economies were hardest hit and despite some modest growth in investment into some sectors related to the Sustainable Development Goals (SDGs), UNCTAD reports the annual SDG investment gap in developing countries has widened to $4tn.
The future of global trade and investment, and thus globalisation, may be up for debate. Predictions are impossible, especially in a time of such great flux. But what is certain is that investment promotion agencies — working in concert with private-sector partners — will remain essential facilitators of globalisation. Their role cannot be underestimated.
IPAs are government bodies but with a private-sector mindset. They are the private-sector face of the governments and they act as bridges between the public and private sectors. They are truly the engines of FDI, and without FDI, there can be no globalisation.
In such difficult market conditions, it is more important than ever for IPAs to be optimised to the best possible level.
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This is why we at WAIPA remain deeply committed to supporting IPAs in their missions and to providing a platform for capacity building and knowledge sharing. IPAs must collaborate in order to harness the capabilities and strengths of individual countries, instead of competing against one another. By fostering a collaborative environment, IPAs can share best practices, exchange knowledge, and leverage each other’s strengths to drive mutual success.
Through this internationally minded, co-operation-driven approach IPAs can serve as effective champions of global investment and sustainable development — and keep the wheels of globalisation turning now and in the future.
WAIPA’s World Investment Conference 2023 will take place in New Delhi, India, between 11 and 14 December, and is an essential gathering for investment promotion professionals, business leaders and international experts as they discuss the most pressing topics related to FDI. For more details and to register: https://waipa.org/wic/