Excellencies, distinguished delegates,
Ladies and gentlemen,
The COVID-19 pandemic has reversed much of the region’s progress on the 2030 Agenda for Sustainable Development.
It is also complicating the key aspects of economic globalization, shocking global and regional supply chains, and disrupting international trade and flows of foreign direct investment.
In fact, pandemic and associated lockdown measures resulted in global FDI flows plummeting by 42 per cent last year to an all-time low of $859 billion.
Developed countries, particularly in Europe and North America, recorded the most dramatic declines in FDI.
Developing countries in Asia and the Pacific, by comparison, were more resilient with FDI flows to developing Asia only mildly dropping by 4 per cent.
The severity of the pandemic’s impact on FDI flows varied by subregions in Asia and the Pacific.
For instance, while FDI inflows to both North East Asia and South Asia grew due to positive growth in both China and India, FDI collapsed by 31 per cent in South East Asia and by 24 per cent in North and Central Asia.
We are, indeed, going through turbulent times.
Looking ahead, effective policy response and recovery measures combined with a successful regional and global vaccine roll-out, should lead to a small and positive rebound in FDI flows in 2021, which is likely to accelerate in 2022.
This outlook, however, is dependent upon our ability to suppress the spread of the virus and the effectiveness of policy interventions to stimulate FDI and address the pandemic’s socio-economic effects.
The road to a sustainable recovery from the COVID-19 pandemic will be hard and gradual, and FDI will have an important role to play as public financing will remain scarce in the recovery period.
FDI can help bolster our region’s economic resilience, support employment generation and promote structural transformation.
Yet getting back to pre-COVID-19 levels of FDI will take time.
Cross-border business ties need to be re-established.
Appropriate projects need to be identified to attract investors and convince them to stay and even expand.
In the meantime, lower levels of investment will lead to heightened competition for investment among our region’s economies.
Recognizing this, it has never been more critical to take decisive policy action that ensures FDI is channeled into priority sustainable development sectors.
The pandemic has provided governments a unique window of opportunity to re-examine and reform their approaches towards FDI, with a view towards increasing its contribution to sustainable development.
A multilateral investment facilitation framework that supports and encourages countries to embark on a shared path towards domestic reforms to improve the transparency, efficiency and predictability of investment rules.
This process will further incentivize investors to act and boost FDI flows to our region’s economies at a time when it is needed the most.
Bold, new actions taken today will set national, subregional and regional development trajectories for the next decade and beyond.
In this context, today’s regional roundtable is both timely and strategic in providing a space for our member States to reflect on the opportunities, challenges and country specific concerns related to a multilateral investment facilitation framework.
I encourage you to reflect on actionable investment facilitation measures that will increase the sustainable development impact of FDI and enable your countries to achieve SDG targets.
To this end, I urge you to consult the full inventory of policy measures available.
For instance, you may want to give consideration to:
- creating a special category of ‘Recognized Sustainable Investors’ to incentivize investors to invest in sustainability;
- developing targeted incentives to advance investment in priority sustainable development sectors and publishing investment incentives and criteria to qualify online; and
- providing technical assistance to developing countries’ Investment Promotion Agencies to enhance their ability to facilitate sustainable FDI.
Finally, it is our hope that discussions will better enable policymakers and trade negotiators to participate in the ongoing structured negotiations at the WTO, as well as in other relevant international fora.
I wish you a successful meeting.
Thank you for your attention.