As the Investment Experts' Group (IEG) awaits possible Ministerial approval of APEC's Investment Facilitation Action Plan (IFAP), attention has been turned toward foreign investment. If approved, the IEG would be a key driver of the work programme to implement many of the actions and measures to be taken over the three-year implementation period of the IFAP.
While the plan is non-binding, implementation depends on endorsement by all APEC economies. In the meantime, the IEG has focussed immediate attention outward through a strong work program involving multi year, multi stage projects aimed at enhancing capacities especially in APEC's developing member economies. The IEG's work on improving investment climates is an important complement to other work on structural reform in the Economic Committee and the private sector development agenda in the Small Medium Enterprises Working Group.
In recent weeks, the group has collaborated with international organisations, including the United Nations Conference on Trade and Development (UNCTAD) and the Organisation for Economic Co-operation and Development (OECD) as well as the private sector, examining ways to make the region more attractive to investors:
Explains Group Chair and Senior Adviser to the Foreign Investment and Trade Policy Division of the Australian Government, Roy Nixon, "The appeal of investment depends largely on one's experience with governments and the ease with which procedural requirements are carried out." For example, investors may need to obtain a license, or acquire permission to buy land. "Investment rules and regulations should be transparent, consistent and open. These are the conditions necessary to operate a business and to make prudent long-term decisions."
Conversely, he adds, APEC should learn more about how to improve its use of foreign direct investment. To this end, the group is using a case study approach with examples from both developing and developed economies of best practices in areas such as infrastructure, electricity and small and medium enterprises.
"Particularly," says Nixon, "we are studying those policies through which economies have successfully connected large multi-national corporations to local suppliers.
The IFAP, which has undergone rigorous processes by APEC's Committee on Trade and Investment (CTI), could be endorsed by APEC Trade Ministers next month and would provide a comprehensive framework of investment facilitation principles to guide the collective actions of APEC member economies key areas affecting investment flows. The current draft reflects a balance of views with some flexibility and compromise where necessary.