VN Balasubramanyam, professor of development economics, Lancaster University Management School
Maintain macro economic stability, promote stability of policies and try to eliminate cumbersome rules and regulations and mitigate, if not root out, corruption and rent-seeking in the host countries. Much could also be done by the MNCs themselves to assure host countries on labour standards and the environment.
Fabian Collard, assistant communications manager, Office for Foreign Investors, Wallonia, Belgium
We need to improve our global offer of services and to develop the appropriate local synergy. Those should focus on links with the universities. These latest are going to play a leading role in the development of local know-how. Qualified human potential, innovation, start-up, and development in new technology will create the long-term attractiveness of our regions.
Mike Gooch OBE, inward investment director, South East England Development Agency
Existing recipients of FDI should concentrate their efforts on retaining and expanding investment by existing overseas companies, including a relationship with parent companies. This effort is to ensure that when the “good times” return they are in pole position for any new investment. They should also explore alternative markets and try to identify new technologies that will provide opportunities for the future.
Mark Hughes, executive consultant, Ernst and Young
Ignore the macro and focus on economic development/inward investment promotion agencies.
Christina Knutsson, director UK, Invest in Sweden
Creating a pro-business environment, improving government efficiency, investing in education and engaging in cross-border cooperation will facilitate FDI in both good and tough times. For an investment agency, promoting a nation with a declining economy is a challenge, however. No agency can do better than its country’s business climate.
Mehmet Ogutcu, OECD head, non-members liaison group and Global Forum for International Investment
It is no longer sufficient for a country simply to liberalise its restrictions on FDI – most have already done so. Nor is offering tax benefits and other incentives the key to success. Host and home governments need to move beyond the traditional policy of liberalising FDI. They must embrace a broader set of policies to create an enabling environment for investment: respect for workers’ and environmental rights, competition, taxation, financial markets, trade, corporate governance, public administration, and other public policy goals. While trying to maximise the benefits of FDI, a related challenge is to make sure that we don’t deter the investment flows in the first place.
Declan Murphy, OECD programme director, Investment Compact for South East Europe
Building better and more competitive strategies to attract, retain and maximise the benefits of FDI are crucial for all countries. Equally, countries need to look at regional markets in the same way as investors and to seek collaborative policies that will improve the image of the region. The Investment Compact is a vital part of the Stability Pact for South East Europe (in which the World Bank is a key partner) and seeks to support the improvement of the business environment across the region. It focuses very much on implementation of policy and capacity building to achieve that task. It seeks to introduce incremental drive and action across the region in pursuing policy reform and implementation, leading to increased private investment.
John R. Wille, interim director, Investment Marketing Services Department, Multilateral Investment Guarantee Agency, World Bank Group
First, ensure an investor-friendly business environment through sensible laws and regulatory oversight. Second, develop effective investor outreach programmes involving both the private sector and official investment promotion agencies. Competition is intense, so MIGA’s technical assistance and guarantee programmes are specifically designed to assist client countries in proactively competing for FDI.
Roel Spee, director, PriceWaterhouse Consulting-PLI (pictured left) and Henry Loewendahl, manager, PriceWaterhouse Consulting-PLI
The situation is different for emerging and developed countries and regions. In emerging markets, the opportunity to attract FDI is still high, but the underlying operating conditions have to be favourable. For example, East European countries are on the map for major FDI projects, but in many countries the environment is still not pro-business enough to win these projects. In developed markets, focusing on niche strengths aligned to opportunities in the market is vital. Locations should have an in-depth knowledge of their technological and cluster-related activities and market these to carefully targeted firms.
R&D links between companies and universities/research institutes should be promoted and there are opportunities for cross-border cooperation in areas like alliances. Additionally, in tough times it is vital to ensure that your established industries feel happy with the business environment and continue to consider the area a good location for future investment.
