COVID-19 Publications

Investment Policy Monitor: Special Issue – Investment Policy Responses to the COVID-19 Pandemic

Investment policies make an important contribution in tackling the devastating economic and social effects of the COVID-19 pandemic. Numerous countries around the globe have taken measures in support of investment or for protecting critical domestic industries in the crisis

The global spread of COVID-19 exerts impact on foreign investment policies. The devastating economic effects of the pandemic are expected to drive down global FDI flows by 40%, to its lowest level of the past two decades. Policy response varies from country to country. Many have adopted a series of policy measures aimed at supporting investors and their economies in general or are planning to do so. Others have put in place measures to protect critical domestic infrastructure and industries, particularly in the health sector. The crisis may also have implications for the negotiations of international investment agreements. More generally, the G20, G7 as well as some other groupings have issued statements in support of investment and global value chains. All this will also have lasting impact on future investment policymaking.

The outbreak and spread of Coronavirus (Covid-19) will cause a dramatic drop in global foreign direct investment (FDI) flows. Since our first Special Issue on the impact of the pandemic (early March), updated economic impact estimates and earnings revisions of the largest multinational enterprises (MN Es) now suggest that the downward pressure on FOi could be -30% to -40% during 2020-2021.

The outbreak and spread of Coronavirus (Covid-19) will negatively affect global foreign direct investment (FDI) flows. With scenarios of the spread of the epidemic ranging from short-term stabilization to continuation throughout the year, the downward pressure on FDI will be -5% to -15% (compared to previous forecasts projecting marginal growth in the FDI trend for 2020-2021).

The current COVID-19 crisis has brought to light the critical role of investment promotion agencies (IPAs). They have shown agility and reactiveness in supporting the evolving needs of investors during the pandemic and have been instrumental and valuable to governments as intermediaries between the public and private sector.

The COVID-19 pandemic has generated important challenges for investment promotion agencies (IPAs) forcing them to shift focus from routine investment promotion and facilitation towards crisis management, notification of investors of government emergency and economic relief measures, provision of crisis support services, and contribution to national COVID-19 business response efforts. All this is done while agencies have closed offices, moved functions online and asked staff to work from home.

Faced with a global pandemic, countries have been using UNCTAD’s online digital government platform, known as eRegistrations, to continue providing essential services to SMEs while their offices have been closed.

Faced with the challenge of a global pandemic countries are using UNCTAD’s egovernment platform so they can continue providing essential services and new COVID-19 fiscal rescue measures to businesses though online single windows while offices are closed.

UNCTAD’s investment promotion capacity building programme helps countries to improve policies and institutional capacity for attracting and retaining foreign direct investment for sustainable development. Assistance is provided through advisory services and training. In the context of the COVID-19 pandemic, the investment promotion programme has focused its efforts on assisting investment promotion agencies (IPAs) in dealing with the crisis.

UNCTAD and WHO on 23 April 2020 organized a webinar on investment in quality local
production to address supply bottlenecks related to the Covid-19 pandemic and beyond. The event, which was attended by 127 participants online, was opened by James Zhan, Director of UNCTAD’s Investment and Enterprise Division, and Emer Cooke, Director of WHO’s Regulation and Prequalification Department. Both emphasized the importance and potential of local pharmaceutical production to respond to Covid-19-related supply bottlenecks through effective partnerships between low income country-based producers, foreign investors, host country governments and development partners.