Criteria for a useful guide

1
Investment Guide gaining a competitive edge

• Criteria for a useful guide
• Structure of the guide
• Requirements for ICC endorsement

2
Objective

• To provide first-time investors with basic
  information about the locational advantages,
  business climate, regulatory framework,
  opportunities for FDI and its constraints in a
  user-friendly way

3
Current structure of the guide

• 1. Overview
• 2. Locational advantages human and natural
  resources, markets, infrastructure
• 3. Business support services banking,finance,insu
  rance,auditing
• 4. Business environment registration, licensing,
  taxation,
• convertibility, customs
• 5. Investment climate FDI regulations, investor
  protection, incentives
• 6. Opportunities under privatization
• 7. Success stories

4
Criteria for useful/credible guide

• Relevant meets the needs of users
• Objective reflects the real situation
• Accurate
• Timely
• User friendly
• Outside endorsement

5
Requirements for ICC logo

• FDI statistics are accurate where a different
  definition is used investment is defined and
  figure broken down into components
• Assessment of business/investment climate is
  realistic
• Survey of investors opinions on
  business/investment climate
• Survey of government officials plans for further
  improvements their recognition of weaknesses
  their view of progress in implementation of
  business reforms
• 5. Format conforms in general to UNCTAD/ICC
  series

6
Investors survey

• Issues covered
• 1. 3 most attractive features
• 2. 3 things that need improvement
• 3. Desired institutional changes

7
What investors said

• Three most attractive features
• Best workers in Central Asia
• Large size of internal and regional markets
• Abundance of natural resources

8
What investors said contd

• Three things that need further improvement
• Central Bank transparency
• Independent judicial system
• Consistent application of the law particularly as
  regards customs administration

9
What investors said contd

• Desired institutional changes
• Independent banks
• More powerful chambers of commerce
• Investment promotion and protection agency (one
  stop shop)

10
Business environment

• Recent improvements
• 1. Reductions in red-tape in registration and
  licensing
• 2. Decriminalization of business errors
• 3. Reductions in reporting, inspections, audits
• 4. Complete revision of the tax system

11
Improvements taxation
12
FDI inflows in 2006/2007

• Global inflows were 1.3 trillion in 2006 and
  1.5 trillion in 2007
• Most attractive global destinations China,
  India, US, Russia and Brazil
• CIS attracted 69 billion in 06 and 98 billion
  in 07the highest increase of any region40 vs.
  only 18 globally

13
Factors affecting record increase in FDI inflows

• Increased corporate profits (from 8b in 2000 to
  785b in 2006)
• Increased mergers and acquisitions
• Resulting higher stock market prices
• Favorable financial (lending) conditions

14
Components of FDI

• Equity, reinvested earnings and intra-company
  loans
• Reinvested earnings were 30 of FDI overall and
  50 of FDI in developing countries

15
Current challenges

• Global economic downturn
• Competing in a Flat World
• Diversifying investment inflows by source and
  sector

16
The World is Flat

• Internet
• World wide web
• Google
• Off shoring
• Outsourcing
• Insourcing

17
Competing in a Flat World

• Necessary ingredients
• Dynamic local enterprises
• Universal broadband infrastructure
• Right education science and engineering
• Right tax policy
• Collaboration, partnering

18
Ideal country in a flat world

• The ideal country is one without natural
  resources that must look to its population and
  institutions for progress because often
  resource-rich countries neglect these to their
  regret. Ireland succeeded without natural
  resources. It cut taxes, had the right industrial
  policy, attracted FDI, and graduated students in
  science and engineering.

19
Ideal country in a flat world

• The ideal country is one without natural
  resources that must look to its population and
  institutions for progress. Ireland is an good
  example. It cut taxes, had the right industrial
  policy, health care policy, attracted FDI,
  graduated students in science and engineering and
  gave science grants.

20
Image building

• One stop-shop
• Fair resolution of disputes
• Quality FDI statistics
• Aftercare services for investors
• Attendance at global forums