World Bank Group Report issued on day two of Annual Investment Meeting (AIM 2017)
As part of the Annual Investment Meeting (AIM 2017) being held at the World Trade Center in Dubai, World Bank Group (WBG) issued today (Monday, 3rd April, 2017), a global report discussing the relevance of foreign direct investments (FDI) across the world.
The new report presented ideas and explanations on the best methods to achieve sustainable development through foreign direct investment (FDI) at a time it is considered as a vital source for sustainable development.
The report emphasised three fundamental propositions that policy makers should keep in mind when defining a modern investment vision for development in the era of globalisation. The first proposition highlighted that investment policy and development is about connecting foreign and domestic investments. The second, proposition focused on investments, and in particular foreign direct investment (FDI), which are not homogenous phenomena. The third proposition sheds light on how investments are more than just transactions, entailing multi-staged relationships among different stakeholders.
The report also emphasised that different types of FDI generate different kinds of jobs and thus have a different impact on the development of the local economy. In addition, the report quoted a UNCTAD (United Nations Conference on Trade and Development) study which revealed that FDI flows to developing economies reached record levels at $681 billion in 2014 with a total FDI stock in developing countries exceeding $8.3 trillion. It said that UNCTAD research shows that FDI can trigger multiple direct and indirect benefits in a host country, most importantly the transfer of new technology, managerial capabilities and increased productivity, although these benefits don’t materialise automatically. The WBG report stressed that in order to achieve economic and job growth, it is crucial that Domestic Value-Added (DVA) is increased on a competitive basis.
The report concluded with a note stating that the World Bank Group is currently assisting over 80 countries with framing their investment reform proposals and improving their investment competitiveness. In addition it highlighted the significance of different types of FDI, which can generate varied economic, social and other benefits for a country in the short and long-term. It also stressed the importance of having a sophisticated framework good enough to differentiate between the various kinds of FDI and their potential challenges and benefits for development, while being simple enough to enable governments to clearly start organising and prioritising the multiple and complex variables affecting the maximization of benefits of investment.
Finally, the report guaranteed that achieving measurable result is critical, not only for governments, but also, because in a time when the benefits of globalisation are being questioned, it is in the best interest of citizens and governments alike to become familiar with policies and tools that can contribute to improve the standards of living of the population by maximising the potential benefits of foreign and domestic investment.
“In today’s time, a deeper economic integration among countries will make the region more competitive in international markets and boost long-term growth. While the report by World Bank Group proposes explored synergies between regional and global economic integration, it also highlights the importance of pro-growth integration with the world which cannot be achieved without first strengthening the region’s own neighbourhood,” said Dawood Al Shezawi, CEO, AIM’s Organising Committee.
The World Bank Group has two major goals – to decrease the percentage of people living with less than $1.90 a day to no more than 3 percent by 2030, and to promote income growth of the bottom 40 percent of the population in each country.
