Concept Notes as per Proposed Programme Budget (A/66/6 (Sect. 36)) and supplementary information for ACABQ

1213N.Building national capacities for promoting foreign direct investment in green and other growth sectors

United Nations Conference on Trade and Development ($461,000)

Background

Global foreign direct investment (FDI) inflows rose marginally from $1,114 billion in 2009 to around $1,122 billion in 2010. The stagnant FDI causes serious concern and calls for adjustments in the operations of many investment promotion agencies. This, in turn, has led to increased demand for guidance, advice and training by UNCTAD on how to react to the emerging challenges. This proposal is in response to that demand. It aims to enable beneficiaries to capitalize on changing global trends, such as a growing share of services and the primary sector in FDI, increased FDI flows to and from developing and transition economies (South-South flows), and emerging investment opportunities, particularly in green industries.

The project will improve the effectiveness of investment promotion agencies in developing countries to promote and retain FDI in order to create employment, development benefits and increased competitiveness. At the same time, potential disadvantages need to be considered, including the crowding out of domestic firms, technological dependency, higher costs for essential goods and services, and related social consequences (e.g. job losses). Both the advantages and disadvantages need to be appraised by investment promotion agencies and policymakers with a view to minimizing potential negative effects and maximizing positive impacts.

The project will enhance the capacity of investment promotion agencies to attract green FDI, for example in renewable energy, sustainable agriculture and more energy efficient production. Countries should focus on sectors/subsectors where they can develop an internationally competitive offer and in which there are significant development benefits to be reaped through FDI. To identify suitable sectors, investment promotion agencies need to have the capacity to analyse global trends in green FDI and assess their own country.

The project will involve close cooperation with United Nations country teams and take account of the United Nations Development Assistance Frameworks that specifically flag United Nations support in attracting FDI as an effective response to national development needs and priorities. It will also seek cooperation with the United Nations regional commissions (Economic Commission for Africa (ECA), Economic Commission for Europe (ECE), ECLAC, Economic and Social Commission for Asia and the Pacific (ESCAP), Economic and Social Commission for Western Asia (ESCWA)) and with non-United Nations stakeholders, such as the World Association of Investment Promotion Agencies and national investment promotion agencies.

Objective of the Organization: To strengthen the capacity of developing countries to attract and benefit from FDI in green and other growth sectors in order to create employment, promote agricultural development and reduce poverty / Summary budget
(Thousands of United States dollars)
General temporary
assistance40.0
Consultants154.0
Travel80.0
Contractual services50.0
Operating expenses35.0
Workshops102.0
Total461.0
Relationship to the strategic framework for the period 2012-2013 and the Millennium Development Goals: Trade and development subprogramme 2 (Investment and enterprise); Millennium Development Goals 1, 7 and 8
Expected accomplishments of the Secretariat / Indicators of achievement
(a)Increased capacity of policymakers and investment promotion agencies in developing countries to benefit from emerging investment opportunities in green and other fast-growing sectors (including South-South flows) with a potentially high development impact / (a)Increased number of beneficiary countries reporting more effectiveness in FDI promotion and retention in the sectors targeted by the project
(b)Establishment of a global online network on green FDI to enhance the exchange of best practices, cooperation and the development of global partnerships for development / (b)Increased number of investment promotion agencies in developing countries and other investment stakeholders participating in a new global online network focusing on green FDI
(c)A greater emphasis by developing-country investment promotion agencies on pursuing environmental sustainability through the promotion of FDI in green sectors, such as energy efficiency, sustainable agriculture and renewable energy / (c)Increased number of investment promotion agencies in developing countries reporting successful employment of innovative strategies and practices to attract green FDI through a survey of beneficiaries

Main activities

The main activities of the project will include:

(a)Carry out technical advice based on requests from Governments of developing countries. Advisory reports will be prepared on institutional arrangements, sector-specific investment promotion strategies, policies and best practices to promote FDI for sustainable development;

(b)Produce practical guides to support developing countries in designing and implementing forward-looking policies and strategies (e.g. market creation policies, promotion of South-South FDI) and special measures (e.g. cleantech parks, eco-industrial parks) for the promotion of FDI for sustainable development, including enhancement of investment in energy efficiency, sustainable agriculture and renewable energy;

(c)Establish a global online network on green FDI for investment promotion agencies and other investment stakeholders, which will include a database on best practices in promoting green FDI, an information centre on green FDI events and contacts, a discussion forum and online UNCTAD training courses on investment facilitation and promotion practices;

(d)Organize regional investment promotion training seminars for countries in Africa, Asia and the Pacific, and Latin America and the Caribbean. The seminars will provide hands-on advice to investment promotion agency officials and policymakers on strategies, policies and practices to attract FDI in green industries and other sectors with emerging investment opportunities and development potential.

Detailed budget (US dollars)

General Temporary Assistance
4 months, ad hoc assistance to conduct background research and organize advisory missions and capacity-building activities: ($10,000 x 4) = $40,000
Consultants
International consultants ($120,000): 8 work months for advisory work, the design and delivery of capacity-building activities and for setting up the global online network on green FDI, in support of activities (a), (b), (c), and (d): Consultancy: ($10,000 x 8) = $80,000. Travel Consultants: ($5,000 x 8) = $40,000
National consultants ($24,000): 8 work months as part of teams providing advisory services and training in support of activities (a), (b) and (d): ($3,000 x 8) = $24,000
Consultant for external evaluation: $10,000
US$ 10,000
Contractual services
Contractual services with local and regional institutions to support activity (d): $20,000; Establishment of the online network in support of activity (c): $30,000
Travel
UNCTAD Staff: 10 travel to provide ad hoc advisory services to IPAs and to organize and deliver training in support of activities (a) and (d): ($6,000 x 10) = $60,000; Regional Commission staff / other UN staff: 5 travel arrangements to assist in the delivery of advisory work and training seminars in support of activities (a) and (d): ($4,000 x 5) = $20,000
Operating expenses
Translation, simultaneous interpretation and printing of advisory reports, practical advisory guides and training manuals in support of activities (a), (b) and (d): $35,000.
Seminars and Workshops
3 seminars in support of activity (d) mobilizing 30 regional participants: ($3,000 x 30) = $90,000; 1 non-regional resource person per seminar: ($4,000 x 3) = $12,000[1] / 40 000
154 000
50 000
80 000
35 000
102 000

[1]UNCTAD will sponsor 10 participants per seminar. These activities will also be open to concerned participants not sponsored through this project.