INVESTMENT FOR DEVELOPMENT (IFD Project)
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Investment for Development |
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The researchers of the selected seven countries have prepared country research reports on investment regimes of their respective countries. The terms of references (TORs) of these reports and the latest versions of the reports are available in the website. |
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Assessment
of investment policies in
Terms of Reference This report will constitute a study of the national investment policies of the selected country Input:
This report should draw on secondary sources Output:
A reader-friendly, non-technical document, for distribution to
stakeholders and to set the scene for the deeper research in Report B,
in particular helping to identify case studies. 1.
Brief overview of
macroeconomic context for the last 10 years
2.
Overview of main policy trends for the last 10+ years
3.
Investment Policy Audit For
all policies, report should specify when the measure was introduced,
whether there is any difference in the treatment of national and foreign
investors; differences across sectors etc.
4.
Policy-making process for investment issues. This
section should be more discursive, highlighting problems and potential
areas for improvement.
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The
report should seek to answer three key questions: I.
How successful have the countries in the study been in attracting
FDI? II.
What are the policies that have influenced their level of
success? III.
Can any general tentative policy recommendations be made on the
basis of this? 1/
Short introduction to global production strategies: why might a
MNC want to invest in a foreign country?
Market/resource/efficiency-seeking. What are the latest insights into
firms global strategies (e.g. are they less rational and more ad hoc
than had earlier been thought?) [Nothing too technical] Broad macro
characteristics of the project countries, presented in comparative
graphs. Given the characteristics of our project countries, how much FDI
would we expect them to attract? For what reasons? 2/
Comparative success in attracting FDI Do
the countries meet these expectations? Comparative
graphs showing the FDI stock/flow for each of the countries; FDI as a
share of GDP; as a share of world trade. Some
comparison with other countries in the region/world, e.g. China, E. and
SE Asia, success stories in Africa, Argentina? When
differences in size, dynamism and outward orientation of the economies
are held constant, are there still major differences in the amounts of
FDI that these countries attract An attempt will be made to identify key
drivers of FDI in each project nation. The report will also explore if
the determinants are significant 3/
Role of FDI in the economy Does
FDI play a major role in these economies? Comparative
graphs of: Proportion
of FDI in domestic capital formation FDI
in the capital account (debt/aid/portfolio) FDI
flows as a proportion of changes in value added in the manufacturing
sector? Foreign-owned
companies share in value addition; sales; employment; exports;
concentration in particular sectors (as far as the information is
available in the reports and annexes) First
conclusions on the overall importance of FDI in the economy. 4/
Place of FDI in the country’s economic policy. Is
it a particular focus? Is
there a distinct FDI policy or does it form part of a national
investment policy? To what extent has FDI policy changed in recent
years? Very
broadly, has liberalisation been correlated with a rise in FDI? Does the
literature back the proposition that liberalisation leads to greater FDI
flows? 5/
What specific policies have been used by project countries? How do these
compare to other investment regimes around the world? Including some
consideration of policies other than FDI policy per se. In
this report, there will not be
a detailed assessment of the effectiveness of policy; nor will there be
an assessment of the impact of FDI on the economy. These will be
reflected in Report B and the Report B synthesis. On
the whole the report should be reader friendly, it should not be too
technical. It must be comprehensible and interesting to laymen.
Terms of Reference Report B Draft 03-02-02 Report
B will seek to answer the following questions: What
impact has FDI had on the economy? How
successful have government policies been in attracting and benefiting
from FDI? What
changes should be made to government policy in order to attract and
benefit more from FDI? Report
B will contain: 1. A short introduction to FDI policy and performance in the country drawing on the research for Report A including presentation and analysis of data on the sectoral distribution of FDI. This will serve to make the document complete and more readable for people who are not familiar with the subject matter. The introduction will also include a brief summary of the results from the civil society survey (see below) and an explanation of the selection of the case study sectors. 2.
Civil Society Survey The
questionnaire for the survey is attached as Annex 1. Partners will send
out a postal and email survey, and may also distribute the survey, if
possible, at NRG meeting 1. They should aim for 50 responses. Responses
should be collated and shared with CUTS according to the following
outline and attached as an annex to the report.
3.
Three case studies: Three sectors will be selected for the research in
consultation with CUTS. They will include the power
sector, telecoms and a manufacturing sector (auto industry). For African
countries mining could be taken and textiles for Bangladesh. In countries
where these sectors either do not exist or are of very minorimportance in
relation to FDI, other sectors will be chosen in consultation with CUTS that
share important features with these sectors. For
each case study, the report will present an economic and policy overview of
the sector and the role of FDI in that sector. The research will be based on
existing studies, economic data and a survey of foreign investors and
domestic businesses in the selected sectors. Questionnaires are attached as
Annexes 2 & 3 respectively. The
following information will be collected and presented for each sector:
i
Sector
data over time (10 years): sales, exports, total capital, working capital,
employment, prices, (given inflation and exchange rate fluctuations),
market concentration, average size of firms, the sectors' share in the GDP
and total exports & imports.
ii
FDI performance: stock, flows, approvals compared with
fructification, nature of the FDI
iii
Policy: FDI-specific policies incentives and regulations, sectoral
regulations, IPR policy (if relevant).The implementation of policy is even
more important than the letter of the policy. The role and effectiveness of
the sectoral regulator, if appropriate.
iv
Impact of FDI on the sector in terms of: competition and
competitiveness of the sector, local business (competitors, suppliers,
contractors etc), employment (including quality of work and remuneration),
exports and capital flows, transfer of technology, know-how, skills and
management expertise, environment
v
Privatisation efforts in the sector: when started, how successful
till date, how much FDI is allowed in the sector, the associated problems On
the basis of this data, the impact of FDI in the sector and the impact of
policies will be analysed. The analysis will cover: The
differences between foreign firms and domestic firms in terms of performance
(sales, profits, market share, employment) analysed over time. If foreign
firms perform significantly different from domestic firms, explanations of
why this is the case. The
impact of policies on the flow of FDI. Identification of those policies that
have been most effective in attracting and retaining FDI in the sector and
those policies that have discouraged investors. Is it possible to identify
any policy changes which have had a significant impact on the amount of FDI
in the sector? The
relevance of policies on the impact of FDI on the sector. In particular, the
analysis will assess whether policies have increased the benefits of FDI in
terms the aspects of FDI in (iv) above, whether policies have been
implemented effectively and whether they have had the intended effects. 4. Conclusion. On the basis of the case studies and all the survey results as well as secondary sources and other economic data, the Report will generate concrete recommendations for government policies at the sectoral level. These should be presented in a clear, bulleted format. Looking forward, are any policy changes under onsideration? Should policy be tailored to the sector or are there useful policy steps that the government could take to maximise the benefits of FDI across the board? The analysis should consider, in particular, the relevance of corporate governance regulations, capital market regulation, competition policy, labour and environmental laws etc as well as FDI promotion and facilitation initiatives. In all cases, the analysis should consider how implementation of existing policies can improved and the prospects for successful implementation of proposed policies.
Terms of Reference 17-05-02 Note :
The specifications for the report has to be modified from those given in the
Operational Strategy Note (OSN). In the OSN, the report covers only the
second NRG. However, as all the NRG meetings would have important and useful
outputs for the report, the report would be more valuable if it covers all
of the three NRG meetings that are held in each country rather than covering
one meeting exclusively. The report would therefore be due 6 weeks
after the third NRG meeting has been held, i.e. in October-November 2002. Purpose: The purpose of
the report is for distribution as a policy advocacy document at the national
level. The report should therefore be written in a readily accessible style,
with attention given to the presentation as well as the language. Reports A
(FDI policy report) and B (FDI
performance and perceptions report) would act as base for report C. Report A and B of each
country will be published together as a FDI policy, performance and
perceptions report. Report C will be published as a National Advocacy
document. Contents:
The introductory chapter of the report would contain an overview of FDI
policies drawing from report A. It would also summarise FDI performance and
perceptions of civil society and investors drawing from Report B. The report would have a list
of actions including legislative changes but with emphasis on implementation
to be taken by:
Actions should be grouped
into categories, for example, by responsible department or agency, or by
relevant piece of legislation. The list of actions should be generated on
the basis of:
The partner might formulate recommendations and place them up for discussion by stakeholders at the NRG meetings. These could be drafted and discussed in NRG 3. There will be a range of
views represented at the NRG meetings. Universal endorsement for the actions
may not be necessary from the NRG meetings. The outcomes of partners’
research could get relatively more importance than opinions voiced at the
meeting. However reasoned dissent should be noted. It will enhance the utility
of the document for advocacy purposes if some recommendations have broad
backing in the meeting. This support and the opinions of key figures in the
NRG who supported particular propositions could be noted in the document.
Quotations from interventions by eminent individuals would be useful and
could be used where possible. For all the actions, clear
explanations of key terms and concepts could be provided for clear
understanding. In the interim project meeting scheduled for October 2002 and
the partners could decide how they could work together and with CUTS in
elucidating key terms and concepts. Each of the advocacy points should have
proper justification. This may draw on the Report A and Report B research,
on experience and examples of good practice in IFD countries or elsewhere in
the world and the discussions at NRG meetings. Format:
The report will contain the
following chapters:
1.
Full list of all identified NRG members contacted 2.
Full list of participants for each of the three events 3.
Agenda for the 3 events 4.
Three separate reports for the three events. The report should
summarize the presentations &
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