Imported User:
The Executive Secretary, Nigerian Investment Promotion Council(NIPC), Mustapha Bello yesterday in Abuja formally launched the World Investment Report 2011 of the United Nations Conference on Trade and Development(UNCTAD).
In his opening presentation, the NIPC boss drew attention to non –equity mode of international production as reflected in the report, stressing that these modes with growing interest by transnational corporations (TNCs ) presented opportunities for developing countries and economies in transition to integrate more closely into the rapidly evolving global economy, to strengthen the potential of their home –grown productive capacity and to improve their international competitiveness.
The UNCTAD report which examined recent trades in Foreign Direct Investments (FDIs) and global policies, noted that global FDI has not yet recovered fully to its pre-crisis level, but observed that there were indications that it seemed likely to do so this year, while estimating that global FDI flows which rose moderately to $1.24 trillion in 2010, would increase to about $1.4 to 1.6 trillion, and approach its 2007 peak in 2013. The report noted that the recovery presented both a huge opportunity and a challenge for policymakers in all countries and emphasised that the challenge for the development community would be to make investment work towards achieving the millennium development goals.
UNCTAD said the slow recovery of FDI flows in 2010 masked starkly divergent trends among regions, sectors and modes of FDI. While East and south –East Asia and Latin America experienced strong growth in FDI inflows, Africa, south Asia, west Asia and transition economies continued to decline
In summary, it said that the regime of international investment policies was at a crossroads, with close to 6,100 treaties, many ongoing negotiations and multiple dispute settlement mechanisms.
It further suggested that as a way forward, policies aimed at improving the integration of developing economies into global value chains must look beyond FDI and trade , arguing that policy makers must of a necessity consider non-equity modes(NEMs) of international production which include contract manufacturing, servises outsourcing, contract farming, franchising, licencing, management contracts and other types of contractual relationship through which TNCs coordinate the activities of host –country firms without owning a stake in those firms., adding that crossborder NEM activity wordwide was significant and particularly important in developing countries. It was estimated to have generated over $2 trillion sales in 2009.Contract manufacturing and services outsourcing accounted for $1.1 to 1.3 trillion, franchising accounted for $330 to 350 billion, licencing accounted for $340 to 360 billion, and management contracts around $100 billion. In most cases NEMs were growing more rapidly than industries in which they operated. It is also estimated to employ 14 to 16 million workers in developing countries.
Add new comment