conceptualising an investment facilitation index...• mikta (april 4, 2017) • china (april 21,...

Conceptualising an Investment Facilitation Index

Dr. Axel Berger, Ali Dadkhah, Dr. Zoryana Olekseyuk

Regional Seminar on Investment Facilitation for Sustainable Development

UN-ESCAP, Bangkok, 12 March 2019

© Deutsches Institut für Entwicklungspolitik (DIE)© German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

Discussions about investment facilitation at various levels:

• Multilateral Level:

– Agenda 2030 for Sustainable Development and Addis Ababa Action Agenda

– G20 Guiding Principles for Global Investment Policymaking

– WTO Structured Discussion

• International Organizations:

– UNCTAD Investment Facilitation Action Menu

– OECD Framework for Investment Policy Transparency and the Policy Framework for

Investment

• Regional Level:

– APEC Investment Facilitation Action Plan

– High-Level Trade and Investment Facilitation Forum for Development, Nigeria, 2017

2

Investment Facilitation - Background


Research Project of the German Development Institute: “Investment

Facilitation for Sustainable Development”

Research gaps

• Conceptualising investment facilitation

• Measuring impact

• Sustainability orientation

Contribution

• This project aims at generating research findings informing the stakeholders involved in rules-making

on investment facilitation

Outputs:

• Develop an Investment Facilitation Index, quantifying the current level of practice on investment

facilitation at the country level

• Ex ante impact assessments of proposed reforms or trade agreements

• Academic articles, policy briefs, background notes, data visualisation

3

Project overview


• Proposals in WTO:

• Negative approach:

• Positive approach:

4

Investment Facilitation Index: Scope

• Russia (March 30, 2017)

• Argentina and Brazil (April 24,2017)

• MIKTA (April 4, 2017)

• China (April 21, 2017)

• FIFD (April 21, 2017)

• Brazil (December 13, 2017)

• Market Access

• Investment Protection

• Government Procurement

• Investor-State Dispute Settlement

• Transparency and Predictability

• Mechanisms for Dialogue

• Application Process

• National Focal Point

• Single Electronic window

© Deutsches Institut für Entwicklungspolitik (DIE)© German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 5

IFI Policy Areas

Source: Authors

Policy Area Description

Transparency and Predictability

• Provide full, clear and up-to-date picture of investment regime, including advance notice of

proposed changes.

• Promote legislative simplification including plain language drafting.

Electronic Governance

• Establish single window and use information and communication technology.

• Apply new technology to improve information, application and approval processes.

Cooperation

• Make use of international and regional initiatives aimed at building investment expertise,

including information sharing.

• Provide institutionalised mechanism to support domestic inter-agency coordination.

Application Process

• Establish clear criteria and transparent procedures for administrative decisions including

investment approval mechanisms.

• Reduce the number and complexity of fees and charges.

Outward Investment • Provide comprehensive information available to the foreign investors by home countries.

Focal Point and Review

• Provide mechanisms to improve relations or facilitate contacts between host governments

and relevant stakeholders.

• Receive complaints from investors and/or help them solve difficulties or to carry out policy

advocacy.

• Encourage development of effective mechanisms at reasonable cost for resolving disputes

including private arbitration services.

• Provide framework to identify and address problems encountered by investors.


IFI Country Coverage

Low Income

Lower Middle Income

Upper Middle Income

High Income

World Bank Development Status Created with DataWrapper


Number of Countries per Decile

A) Inward FDI Stock: Countries per Decile B) Outward FDI Stock: Countries per Decile

Note: 69 countries are currently engaged in the Structured Discussion at the WTO.

We have data on the Inward FDI Stock of 197 countries including all 69 participating countries.

For Outward FDI Stock we have data on 173 countries, among which 68 are participating countries (Data on

Myanmar's Outward FDI Stock is missing).

Created with DataWrapper


• Sources of Information for the IFI Measures:

8

IFI Measures

• Proposed IFAs in WTO

• WTO TFA

• OECD STRI

• OECD TFI

• APEC IFAP

• Regional Trade Agreements

(CETA, CPTPP)

• UNCTAD Single Window

• World Bank Doing Business

Indicators

• WEF Global Competitiveness

Report

• Countries Rules and Regulations

Related to Investment Facilitation

There are 117 measures in the IFI.


IFI Measures

9

Measure Code Categories Sub-categoriesNumber of

Measures

A CooperationInternal

12External

B Electronic GovernanceICT

22Single Window

C Application ProcessFees and Charges

23Formalities

D Focal Point and Review

Alternative dispute resolution

25Appeal

Co-operation and information-sharing mechanisms

Ombudsperson

E Outward Investment

Promotion Services

8Insurance and guarantees

Other measures

F Regulatory Transparency and Predictability

Information availability

27Involvement of the trade community

Notification


• IFI Scoring Scheme

• (2) corresponds to the best performance

• Transform qualitative regulatory information into a multiple binary scheme

• Variables representing measures coded with 0, 1, or 2: to reflect the state of

implementation

• Variables are broken down on thresholds of 0/1/2 where variables depend on

numerical answers

10

IFI Scoring Scheme

Measure Answer

Establishment

of a focal point

(Ombudsman)

(0) There is no Focal Point; (1) A Focal Point is

planned or in the process of implementation; (2)

There is a Focal Point


IFI: Weighting the Policy Areas - Survey

11


IFI - Sample Countries (Equal Weight)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Canada Brazil Colombia China

Cooperation Electronic Governance Application Process Focal Point and Review Outward Investment Regulatory Transparency and Predictability


• Development of the Policy Shock

• Creating a template based on the IF Model Agreement

• Mapping articles of the Model Agreement to the measures in the IFI

• Change the answer and contribution of the measure based on the IFI

13

IFA Policy Shock

Measure Weight Answer Scores ContributionModel

Agreement

Contribution

After

Electronic submission

of documents accepted0.010309278 0 0 0

Article 4:

Electronic

documents

0.02173913


Thank you!

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conceptualising an investment facilitation index...• mikta (april 4, 2017) • china (april 21,...

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