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Davos Online Forum: Addressing the Top Three Structural Challenges as Global FDI Slashes by Nearly Half
Author: elegant
According to the investment trends monitoring report recently released by the United Nations Conference on Trade and Development (UNCTAD), the new corona pneumonia epidemic has reduced global foreign direct investment (FDI) by 42% in 2020, and the level of investment has a new low in the last 30 years. In the post-epidemic era, how should we resume cross-border investment?
The dialogue on the “Davos Agenda” held online by the World Economic Forum has just come to an end. During the four-day program, more than 1,500 leaders of political, business and social organizations from more than 70 countries and regions around the world exchanged in-depth discussions on the theme “Seize the critical year and rebuild the trust of all parties and discussed how to deal with the new corona pneumonia Under the epidemic, economic, environmental, social, technological and other global challenges, seeking cooperation to combat the epidemic and promote recovery plans.
In a panel discussion on January 29 on the topic “Rebalancing Global Foreign Direct Investment,” Alix Zwane, Executive Director of the Global Innovation Fund, found that while we are seeing a decline in short-term FDI activities, from In fact, the demand for International trade and investment flows are very strong. To promote the establishment of a sustainable FDI system, we must estimate the risks that may arise and take steps to address them.
According to the UNCTAD report, China’s economic recovery after the epidemic has been very rapid, overtaking the United States to become the world’s largest recipient of FDI. Ning Gaoning, secretary of the Party Leadership Group and chairman of the Sinochem Group, said that China has almost become the most open country in the world in recent years. China has welcomed free trade and FDI. At the same time, China’s economic recovery is better and faster. This is the reason why capital has chosen China as an investment destination.
“Before the new corona pandemic, investment from other countries in China had some adjustments or moved to other low-cost countries in Southeast Asia. But gradually, investment from these countries returned to China. The open markets and China’s hi-tech are attracting with these investments “This is the market itself that offers development opportunities and is a company-driven process. China is the fastest growing market in the world and welcomes the investment and development of the company, “said Ning Gaoning.
The dialogue on the “Davos Agenda” held online by the World Economic Forum has just come to an end.
Three structural challenges posed by FDI
Pascal Cagni, President of the French Business and Investment Agency and Ambassador for International Investments, believes: “In essence, if you want to reconsider foreign direct investment, you must know if you want to protect your own economy. Ernst & Young ranked France as the best in Europe. Countries that are attractive for investment because we are very focused on allowing countries and companies to receive FDI with minimal damage to ensure we survive this crisis. “
Carney said that in France, 10% of the total population is directly related to international investment, which represents 20% of France’s R&D expenditures and 30% of exports. “FDI is essentially a good thing for us. Letting investments come to France and receive them as much as possible is the key to solving our problems and continuing to maintain economic growth. If we don’t, we will fail and lose wealth.” He said.
Zewan said that although FDI has decreased in the very short term, in fact, the potential pool of global sustainable finance is increasing. For some structural reasons alone, it is difficult for FDI to reach the markets where these investments are most needed. Zewan raised three structural challenges: first, how do we measure the impact of FDI, to think about the risks we are willing to take; second, how to manage structural investment risks in the search for social value; Third, how Combining financial preferences and more business capital and mixed transactions has been shown to work.
“If you measure the investment impact carefully and rigorously, then the investment we create will tolerate financial risks and seek social value. We can carefully consider how to subsidize business capital so that business capital can enter earlier, which will be caused by The Lack of FDI. In the affected market, we can really help capital to stop being a spectator, but to enter the game of chess, promote recovery and recover all the profits we lost due to the new pandemic of the crown of the last year “. Wan said.
Establish a reasonable and transparent policy mechanism
Carney said that in the current uncertain international environment, what we need to do is not close borders and stand still, but establish a reasonable and transparent policy mechanism to clarify the basic treaties for joint cooperation. The EU recently launched the “Digital Market Bill is a good example.
“In Europe, our savings levels are now very high. I think we should redirect this money into innovative investments in a completely different way. We should not tolerate 1 euro out of every 5 euros in the bank, or just use it to create bubbles in the world. real estate finance. We should invest money in good companies, “added Carney.
Finnish Foreign Trade and Development Cooperation Minister Ville Skinnari stated that in terms of promoting FDI, the existence of trade agreements is of vital importance based on the development experience of Finland and the European Union. While there is criticism of global trade organizations around the world, clear trade agreements and treaties remain an important prerequisite for the prosperity and development of world trade.
Zewan said that we should provide capital for financial instruments with patience and risk tolerance to support the rebuilding of the market. When considering least developed countries and regions hoping to increase capital flows, if we are to achieve the sustainable development goal of “no country left behind”, we must find ways to help mobilize domestic resources and accelerate investment and investment. external currents.
“This is one of the main political challenges we face. We see that the development agencies of Western countries in the OECD are increasing their budgets and their role in bilateral aid. However, we have not yet fully figured out how to contribute to these. development fund creates the right incentives to improve the quality of public services outside of traditional sectors like energy. I think this is a big challenge for our development finance agencies, and it is to think about how to accelerate and improve the quality of utilities. In various sectors I am referring not only to the energy sector, but also to the water conservation and public health sector, and even to the agricultural sector, so you can see creative ways to mix capital to accelerate the quality of public services in underdeveloped countries, ”said Ze Wan.
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