Market reform attracts foreign investment in developing countries, survey reveals
Brussels, July 10, 2000 - Developing countries are hungry for foreign direct investment (FDI) and are reforming their markets to attract it a new survey has revealed.
The report, issued today by the European Round Table of Industrialists (ERT) www.ert.be, is the result of two years research and shows that investment conditions in 33 of the world's developing nations continue to improve markedly.
Compiled in collaboration with the International Chamber of Commerce, the survey covers countries in Asia, Latin America and Africa. Six countries selected for the UN-ICC investment guides project were included for the first time.
The survey found that during the period 1997-1999, the all countries in the sample space had continued in definite moves to open their economies to private investment including deregulating business rules and institutions and adapting these rule to global requirements.
Citing examples set by countries formerly closed such as Syria, Iran and Vietnam, the survey found many countries have pressed ahead with reforms to attract FDI despite events such as the Asian financial crisis and the failure of multilateral talks on investment at the OECD.
"More often than not, the countries have done away with investment restrictions unilaterally and have not waited for international negotiations," the survey reports.
Benefits of FDI were also recognized in the survey, including:
- the faster spread of knowledge among disparate global markets
- better choice for consumers with the promotion of competition
- greater awareness of the environment, where FDI encourages business best practices and promotes good corporate governance.
It also found that countries are increasingly using public policy benchmarking - comparing policies against successful changes in countries at a comparable level of economic and social development.
The report was compiled over one and half years and required governments from countries as diverse as Bangladesh, Guatemala, Mali and Tunisia to respond to a detailed questionnaire.
It also asked governments to identify problems with investors, the most common response to which was the lack of cultural sensitivity.
The ERT comprises a group of 48 leaders of major European companies. Together they represent a combined turnover of some EUR 850 billion and employ more than 4 million people worldwide. The report was prepared by an ERT Working Party led by Helmut Maucher, Honorary Chair of Nestlé, S.A.
Free copies of the report are available from The European Round Table of Industrialists in Brussels. Tel: +32 2 534 3100 or E-mail: Click here to send a mail