Putting it to Work in Developing Countries - Nathan Associates

16 In an analysis of shareholder rights, creditor rights,
efficiency of judiciary, rule of law and absence of corruption,
Mexico scores below the Latin American average
in four of five measures. Based on López-de-Silanes,
“NAFTA and Mexico’s Reforms on Investor Protection”
as cited in Lederman, Maloney and Servén, Lessons from
NAFTA for Latin America and the Caribbean
(Washington DC: World Bank, 2003), p. 199.
17 A World Bank study concludes, for example, that
FDI increased temporarily in Mexico when it joined
NAFTA and in Spain and Portugal when they joined
the EU. But the study found no clear evidence that that
FDI was diverted from neighboring developing countries.
Rather, the relative flows of FDI among RIA beneficiary
countries in a region seemed to correlate more
closely with productivity growth, market openness and
size, monetary and price stability, tax burden, and governance
and institutional quality. See Lederman,
Maloney and Servén, Lessons from NAFTA for Latin
America and the Caribbean, Chapter 8, “The Impact of
NAFTA on Foreign Investment in Third
Countries,”2003.
18 WIR 2006, p. 27.
19 ASEAN has attempted to liberalize investment flows
among members. Signed in 1998, the Framework
Agreement on the ASEAN Investment Area (AIA) seeks
to raise FDI in ASEAN through the creation of a liberal
and transparent investment environment, leading to
fully open investment flows by 2020. Member states
have agreed to undertake programs in investment liberalization,
cooperation and facilitation, and investment
promotion. AIA focuses on manufacturing, agriculture,
forestry, fisheries and mining and quarrying, but with
increasing interest in expanding coverage to a broad
range of growing services (e.g., health care, tourism,
telecomunications, distribution and logistics, transportation
and others).
20 http://www.ecattrade.com/issues/
content.aspID=426
21 All resources can be accessed through MIGA’s website
at http://www.miga.org.
22 IFC has the added value of catalyzing FDI by use of
its own resources. On average, other investors and
lenders provide more than $5 for every $1 of IFC
financing. IFC alos syndicates loans with international
commercial banks, underwrites investment funds, and
provides business advisory services.
23 See World Development Report 2005, p. 179.
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