ISLAMABAD, May 22: As countries compete to attract investments, 80 percent of the national investment promotion agencies are failing to respond to investor inquiries in the key sectors of agribusiness and tourism, thereby costing their economies valuable opportunities to win foreign direct investment, says the World Bank in a new report.
The ‘Global Investment Promotion Best Practices 2012 report published on Monday says that increasing the competitiveness of their investment promotion intermediaries (IPIs) is one proactive policy government can pursue to mitigate the current decrease in foreign direct investment (FDI) inflows.
Pakistan and Bangladesh have been included from South Asia among the best regional IPI websites. While the website of Bangladesh for investors is among the best in terms of content, while the website of Board of Investment of Pakistan has effectiveness in terms of promotion of investment.
The report says that in the last five years, the global market for FDI shrunk by about 40 per cent from an all-time record high of $1.9 trillion. Countries that value FDI as an engine of economic growth, job creation, and industrial development now find themselves competing for a smaller pie, but one that is still worth more than $1 trillion, says the report.
Increasing the competitiveness of their IPIs is one proactive policy governments can pursue to mitigate the current decrease in FDI inflows. The Global Investment Promotion Best Practices (GIPB) project surveys the world’s IPIs triennially to collect examples of best practices and provides 189 national IPI competitiveness.
In 2010, for the first time ever, the majority of FDI went to developing and transition economies demonstrating their increasing ability to compete globally.
An analysis of 30,000 high value-added FDI projects shows that government-provided information and assistance significantly influenced investor decisions to locate in one economy or another.
A recent Oxford University study has shown that one dollar spent on investment promotion increases FDI inflows by 189 dollars and that 78 dollars spent on investment promotion creates an additional job by a foreign affiliate.
The report says that there has been a serious decline in the ability of many IPIs to provide meaningful responses or, in face, even to ackn-owledge investor requests for information.