Putting it to Work in Developing Countries - Nathan Associates

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Overall, multinational corporations in developing countries seem to act no better or worse than domestic firms in environmental matters. 37 To maximize the likelihood that FDI does not harm or even improves the environment, developing countries should consider (1) building regulatory capacity; (2) incorporating regulations and sustainability requirements into their economic growth strategies and specific policies for business and industry, both foreign and domestic; and (3) pressing parent firms and foreign affiliates to regard good environmental practice as a spillover effect expected of FDI. On their side, multinational corporations should shape day-to-day operations and business strategies according to the provisions of the Environmental Chapter of the OECD Guidelines for Multinational Enterprises. The OECD has formulated tools and corporate approaches (e.g., environment management systems, stakeholder consultation, environmental assessments, contingency planning, training) in connection with this Chapter. 38 22
3. TRENDS AND PATTERNS IN FDI FLOWS Foreign direct investment inflows to developing distribution in the developing world is uneven, countries rose more than seven-fold in the by country, by countries grouped by income 1990s, then declined significantly in the first level, and by major region. Recognizing FDI’s years of the new century as the world economy broad patterns and geography is essential to slowed and FDI flows from developed countries understanding how FDI fits in the developing collapsed. FDI activity has been recovering, and world, and to establishing a context for analyzoverall developing world inflows rapidly reached ing future flows. new highs. Behind such general trends, FDI’s Evolution of FDI in Developing Countries 1990–2000. The steady increase in volume of flow to developing countries was eclipsed by a phenomenal rise in flows between devel oped countries. Service sector FDI flows to developing countries rise gradually to 40 percent of FDI by 1999. The shares of Asia (especially China) in manufacturing and Latin America in services and utilities also rose. Africa remained marginalized. 2001–2006. FDI inflows decreased with worldwide recession after the “dot-com” crash. All FDI activity dropped severely, and then rebounded after 2003, with record high inflows achieved by 2005 for developing countries in all regions but Latin America. Early data suggest that inflows have contin ued to rise in 2006. Pre-1950. Two-thirds of FDI stock was in developing countries, especially Latin America and the Caribbean, and dominated by extractive and commodity-type investment. 1950–1970. Flows between developed coun tries, especially across the Atlantic, increased. Extractive and commodity FDI flows to developing countries continued, but with a gradual rise in market-seeking manufacturing FDI. By 1970 developing countries absorbed one-third of global FDI stock. 1970–1990. Manufacturing investment in developing countries increased, but developing countries’ share of global FDI stocks declined from 40 percent in 1985 to 25 percent in 1990. 23
Page 1: FOREIGN DIRECT INVESTMENT PUTTING I
Page 4 and 5: Sponsored by USAID’s Bureau of Ec
Page 6 and 7: 5. Attracting FDI 55 What Foreign I
Page 9: PREFACE Trade and foreign direct in
Page 12 and 13: • Strengthening competition and e
Page 14 and 15: 15 years is mixed at the industry l
Page 16 and 17: asis of careful country-by-country
Page 18 and 19: esources, including Internet addres
Page 20 and 21: Figure 1-1 Net Total Resource Flows
Page 22 and 23: Singapore’s Rise and FDI Througho
Page 24 and 25: FDI BY FINANCIAL COMPONENT A foreig
Page 27 and 28: 2. THE CASE FOR FDI International b
Page 29 and 30: The Global Factory—Catalyst for E
Page 31 and 32: countries through mergers and acqui
Page 33 and 34: conditions and policies in host cou
Page 35 and 36: labor market structure and flexibil
Page 37: and distributors and to invest in e
Page 41 and 42: 3. A wave of international corporat
Page 43 and 44: undo improvements in investment cli
Page 45 and 46: Table 3-2 Top Developing Country Re
Page 47 and 48: Three Global Variables in FDI Flows
Page 49 and 50: help maintain and perhaps even add
Page 51 and 52: shot up to almost $16 billion in 20
Page 53: tions and finance, including recent
Page 56 and 57: Table 4-1 Sector Distribution of Es
Page 58 and 59: Table 4-2 Estimated Developing Coun
Page 60 and 61: Figure 4-2 Selected Service Industr
Page 62 and 63: traditional clients more cost-effec
Page 64 and 65: Figure 4-5 Selected Manufacturing I
Page 66 and 67: countries or the Morocco-U.S. FTA w
Page 68 and 69: PRIVATE INFRASTRUCTURE DEMAND Robus
Page 70 and 71: eported to be a source of FDI throu
Page 72 and 73: But, in addition to these commercia
Page 74 and 75: Exhibit 5-1 Selected Investment Sco
Page 76 and 77: Exhibit 5-2 Selected Investment Cli
Page 78 and 79: Ultimately, governments must make f
Page 80 and 81: expedite approvals. Otherwise the a
Page 82 and 83: Where governments deem incentives n
Page 84 and 85: services in this phase involve one-
Page 87 and 88: 6. INTERNATIONAL AGREEMENTS AND INS
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FREE TRADE AND REGIONAL INTEGRATION
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1998. 11 But many advocates, partic
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Encouraging Local Supply Links: Car
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International Finance Corporation.
Page 97:
specific decisions to invest but do
Page 100 and 101:
4. Some FDI already flows to every
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following priorities recognize thos
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on creating regulatory systems that
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ENDNOTES CHAPTER 1 1 United Nations
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in Empirical FDI Studies,” in Doe
Page 111 and 112:
25 See Koji Miyamoto, “Human Capi
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5 WIR 2004, p. 150, for a descripti
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Countries—The Importance of ICT a
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equirement to export a certain prop
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APPENDIX A Data on FDI Flows and St
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Table A-2 Estimated Value of Inward
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Table A-3 Estimated Distribution of
Page 126 and 127:
Table A-4 Developing Countries' Sha
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Resource and Availability UNCTAD. 2
Page 130 and 131:
Resource and Availability Descripti
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Resource and Availability UNCTAD. 2
Page 134 and 135:
Resource and Availability Moran, Th
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Resource and Availability World Ban
Page 138 and 139:
Business linkages. Supplier-produce
Page 140 and 141:
Investment promotion agency (IPA).
Page 142 and 143:
Subnational investment promotion. A
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Putting it to Work in Developing Countries - Nathan Associates

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