Move to boost investment flows to poor countries
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| The new initiative will help bring Least Developed Countries into the world economy |
Brussels, 18 May 2001 - Cooperation between business and the United Nations in helping the world's poorest countries to attract foreign direct investment (FDI) entered a new phase today with the launch of an Investment Council for Least Developed Countries (LDCs).
The International Chamber of Commerce (ICC) and the UN Conference on Trade and Development said they were setting up the Council to facilitate dialogue on investment issues between senior executives of multinational corporations and the political leaders of LDCs.
Efforts will now go ahead to enlist senior executives from multinational companies to serve as business representatives on the Council. Tanzania has offered to host the first meeting later this year in the regional context of South-East Africa.
The announcement was made on the last day of the Third United Nations on the Least Developed Countries, called to discuss ways to help the LDCs to strengthen their economies and compete on global markets. The UN classifies 49 countries as LDCs, 34 of them in sub-Saharan Africa.
A new UNCTAD report on foreign direct investment in LDCs shows that, although their share of global FDI is only 0.5%, amounts of FDI going into these countries have increased substantially, from $600 million in 1990 to $5.2 billion in 1999. At the same time, official development assistance (ODA) to the LDCs has declined from $16.7 billion in 1990 to $11.6 billion in 1999.
ICC Secretary General Maria Livanos Cattaui and the UNCTAD Secretary-General Rubens Ricupero, in a joint statement announcing the initiative, said: "To increase FDI flows to these countries is a high priority. With the accelerating pace of globalization, the international community urgently needs to explore all ways to integrate the poorest countries better into the international production system and the world economy as a whole."
Noting that the private sector had a key role to play, they added: "Without a vibrant enterprise sector, no long-term development is possible."
They said that with the decline of official development assistance, other sources of capital were assuming growing importance. "With its potential advantages to recipient countries, FDI takes pride of place among them."
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