Ms. Patricia Francis, President
of WAIPA, opened the Conference together with Mr. Carlos
Fortin, Deputy Secretary General of the United Nations
Conference on Trade and Development (UNCTAD), which hosted
the Conference. Ms. Patricia Francis welcomed the twenty-two
new members, which joined WAIPA in 2002. A report was
given to the WAIPA delegates on the activities organized
by WAIPA in 2002, with special emphasis on the nine regional
capacity building workshops carried out for the benefit
of over 200 IPA professionals.
Export Processing Zones at Risk? The
Effects of the WTO Agreement on Subsidies and Countervailing
Measures. What options for the future? This was the
theme of the special segment of the WAIPA Conference,
held concurrently with UNCTAD's Commission on Investment,
Technology and Related Financial Issues. This session
pointed at some interesting ideas, as countries are currently
having to give up a popular policy for attracting export-oriented
FDI, namely the granting of export subsidies. Usually
linked to export processing zones (EPZs), export subsidies
have played a significant role in the FDI attraction of
many countries. Mr. Francisco Thompson-Flôres, Deputy
Director-General of the WTO, opened the session with a
keynote address, on the relationship between trade and
investment, and the possibility of elaborating a multilateral
treaty on investment in the context of WTO negotiations.
The session was further introduced by Mr. Karl P. Sauvant,
Director of UNCTAD's Division on Investment, Technology
and Enterprise Development, who addressed the audience
on export competitiveness policies, such as incentives,
and their relationship to FDI.
Dr. Frieder Roessler from the Advisory
Centre on WTO Law, described the details of the WTO Agreement
on Subsidies and Countervailing Measures (the SCM Agreement),
with a view to differentiate the incentives which could
subject the host country to liability, from those incentives
that would not be problematic under the SCM Agreement.
This differentiation was further illustrated by the case
study of the national policies undertaken by Costa Rica
and presented by Mr. Tomás Dueñas, former Minister of
Foreign Trade, as well as a presentation by Mr. Enrique
Camacho, Managing Director of Professional Services at
Motorola (USA). Both speakers emphasized that EPZs incentives
comprise a very small part of TNCs decisions to relocate.
Other important factors exist, including, inter alia,
the availability of infrastructure, training of the labour
force, access to markets, logistics, the enforceability
of intellectual property and the degree to which there
exist backward integration into the local economy through
linkages. All speakers emphasized that EPZs would continue
to be a viable tool for countries to compete for export-oriented
FDI - while some incentives could no longer be offered,
others could, and investment professionals should bear
in mind that there is a broad range of factors attracting
companies to set up operations in EPZs.
| In
alerting governments of developing countries
to the challenges ahead, Patricia Francis, noted
that "[T]he timetable for transformation into
WTO compliance is short. Governments must now
focus on creating an efficient environment capable
of attracting and retaining export-oriented
FDI while providing technical assistance to
introduce the necessary regulatory and administrative
reforms. Multilateral and bilateral agencies
that form part of WAIPA's Consultative Committee
can play an important role in supporting governments
and the private sector in meeting these challenges". |
The participants of a session
chaired by Mr. Paid McMenamim, former President of WAIPA,
highlighted the best practices by their IPAs in the area
of investor targeting and country marketing. Mr. Sean
Dorgan, Chief Executive of the Industrial Development
Agency of Ireland (IDA) highlighted that country marketing
is more than advertising and that IPAs cannot launch a
marketing strategy without achieving first a deep understanding
of their country's locational advantages and see how these
advantages can address the business needs of TNCs. He
highlighted that sustained success of an IPA's operations,
requires flexibility in the response to quick changes
taking place in the business models that TNCs use to make
their investment decisions. Mr. M.J.T. Rowse, Director
General of InvestHK, stressed that the most important
thing for an IPA is to focus its targeting and encompass
its promotional message accordingly. He mentioned a recent
marketing initiative by InvestHK, as an example of focused
promotion. InvestHK sponsored a racing boat, which was
made in mainland China, under supervision of Honk Kong
managers and financed by foreign capital. 150 companies
that InvestHK wanted to target were also co-sponsors of
the boat, thus giving the IPA easy access to its targets.
A plenary session was
devoted to FDI Trends and Policy Implications for IPAs.
Mr James Zhan, Head of the Office of the Director, DITE,
UNCTAD outlined how recent FDI flows had been decreasing
and how this is posing additional challenges for IPAs.
Mr. Mehmet Ogütçü, Principal Administrator, Global Forum
on International Investment, Organization for Economic
Cooperation and Development (OECD) focused on FDI and
regional development and concluded that governments should
move from subsidies to regional competitiveness-enhancing
policies and from sector-based to location-based policies
complemented by multi-sector actions. Mr. Jacques Morisset,
Lead Economist, Private Sector Advisory Services Department,
Foreign Investment Advisory Service (FIAS) made interesting
observations in his presentation about IPAs in the developing
world. First, the effectiveness of an IPA depends on its
country's investment climate. Therefore, IPAs should devote
more resources on policy advocacy, which is not only beneficial
to foreign but also to domestic investors. By contrast,
investment generation or targeting appears expensive and
risky, especially in countries with poor investment climates.
Finally, certain internal characteristics of the IPAs
are associated with greater effectiveness. Those IPAs,
which have established reporting mechanisms to the highest
country's policy makers (i.e., the president or prime
minister) or to the private sector have been systematically
more efficient in attracting FDI. Such institutional links
tend to strengthen the government's commitment and reinforce
the IPA's credibility as well as visibility in the business
community.
WAIPA awarded three
IPAs for their advertising in printing media in 2003
at a cocktail sponsored by FDI Magazine (FT Group). The
winner was the Austrian Business Agency (ABA), followed
by the Ghana Investment Promotion Centre (GIPC) and CzechInvest.
WAIPA's Steering Committee
met on two occasions during the Conference. It was decided
that the next WAIPA's Annual Conference should be held
in parallel to UNCTAD XI in Rio de Janeiro, Brazil, hosted
by the Investe Brasil agency, whereas an interim meeting
should also be held in parallel to UNCTAD's Commission
on Investment, Technology and Related Financial Issues
in January 2004. The Steering Committee created three
task forces to improve the management of the WAIPA Secretariat
in the areas of fund-raising, programme development and
preparation for the Annual Conference.
On the last day of the
Conference, delegates could choose from a broad menu of
parallel events. Side events ranged from training workshops
and tutorials in topics such as investor targeting, country
benchmarking, investment project appraisal, and FDI statistics,
to regional round tables for Latin America and the Arab
Region and meetings such as ANIMA (The Euro-Mediterranean
Network of IPAs). Following the success of the session
on TNCs Location Decisions in the previous WAIPA Conference,
several senior representatives from Deloitte & Touche
-IBLS-, Ernst & Young, -ILAS- and IBM Business Consulting
Services -PLI. The presentations offered case studies
of city selection in shared service centres, global location
strategies for manufacturing operations and how governments
can influence TNCs decisions respectively.
Finally, WAIPA delegates
had the opportunity to visit the European Headquarters
of Procter & Gamble in Geneva. Procter and Gamble EMEA
Global Business Unit was relocated in 2000 from Belgium
to Switzerland. The programme of the visit included a
discussion of the IPAs representatives with Mr. Paul Polman,
President, and Mr. Winston Griffin, CFO about the company
investment culture and strategy for the future.
