Ministers from around the world back private sector investment-for-development policies

Geneva, 16 October 2014 (UNCTAD press release) – Ministerial Round Table

Investment, trade and development ministers from 29 countries and heads of international organizations made a decisive call for the ratcheting up of private sector investment to deliver the sustainable development goals (SDGs), being set to steer development efforts from 2016 until 2030. The calls were made at a round table that concluded the World Investment Forum 2014 in Geneva on 16 October.

The high-level meeting urged for the SDGs to contain concrete provisions on means to implement them, acknowledging that official development assistance and public resources would not reach far enough to achieve the ambitious set of goals, particularly in least developed countries. Opening the meeting UNCTAD Secretary-General Mukhisa Kituyi said a stronger role for private-sector investment would be “indispensable” if the sustainable development goals were to be met.

“We are confronted with a huge annual investment gap of $2.5 million in sustainable development sectors,” Dr. Kituyi said. “No matter what form the sustainable development goals take, they will require substantially more private investment, working in concert with public investment … This is the phenomenally challenging task before us.”

Amir Hossain Amu, Minister of Industries, Bangladesh, noted that intervention at the global level would be “crucial to ensure that non-public resources flow to marginalized countries”. Acknowledging the key role of the private sector to help generate productive capacity and give impetus to job creation and economic growth, Ministers considered policy frameworks and strategies that would propel the private sector to do the heavy lifting to deliver the development goals. The discussions were informed by UNCTAD’s 2014 World Investment Report, which proposes an Action Plan for Investing in the Sustainable Development Goals.

Lakshman Yapa Abeywardena, Minister of Investment Promotion in Sri Lanka, said: “Private financing can be harnessed towards sustainable and long-term investment through an enabling environment that provides the right incentives. An effective strategy in this context has to take into account all aspects of sustainable development and bring together the different modes of traditional financing.”

Other elements highlighted at the meeting as fundamental to delivering sustainable investment included:

  • ensuring that investment policies are in line with overall sustainable development strategies and specific strategic priorities (such as youth employment, widening the skills base, women empowerment, rural development, development of natural resources, industrial transformation, participation in global value chains, and developing alternative energy sources);
  • ensuring a balanced mix of public and private funding;
  • building absorptive capacities, including by improving access to finance for local SMEs;
  • putting in place effective institutions and good governance; facilitating investment and business by simplifying administrative procedures;
  • balancing investor rights with investor obligations, and giving a more prominent role to responsible business practice and corporate responsibility;
  • moving towards international investment policies that effectively attract investment and that safeguard space for policy making in the public interest, while supporting a sound investment climate.

A number of Ministers expressed their views about policy challenges arising from greater private sector involvement in SDG-relevant sectors, including on protecting public interests through regulation; ensuring accessibility and affordability of services for all; and securing complementarity between private and public investment.

Mongi Hamdi, Minister of Foreign Affairs of Tunisia, pointed out the role international institutions can play to help countries to develop the appropriate policy environment, lauding the role UNCTAD’s Investment Policy Framework for Sustainable Development (IPFSD) played in the preparation of Tunisia’s investment law. “The new investment law … will further improve the investment climate by opening up sectors, giving guarantees to investors and providing incentives in line with our sustainable development objectives,” he said.

The outcome of the meeting will be forwarded to the United Nations General Assembly and will feed into the Conference on Financing for Development next year in Addis Ababa, and ultimately into the goal-setting Conference on the Sustainable Development Goals in New York in September 2015.

Ahmed Abitew Asfaw, Minister of Industry, Ethiopia, said: “We have listened, at this Forum, to a number of private sector mechanisms that would enhance their participation in achieving the sustainable development goals. We welcome and look forward to the concrete translation of these mechanisms.”

The meeting was chaired by Lilianne Ploumen, Minister for Foreign Trade and Development Cooperation of The Netherlands, and Rob Davies, Minister of Trade and Industry of South Africa. [Download Chair’s summary]

NOTE: Also speaking at the roundtable were ministers from The Bahamas, Bhutan, Cameroon, Central African Republic, People’s Republic of China, Costa Rica, Croatia, Curaçao (The Netherlands), Dominican Republic, Ecuador, Guatemala, Kyrgyzstan, Lao People’s Democratic Republic, Lesotho, Madagascar, Mali, Niger, Nigeria, Seychelles, Sri Lanka, Sudan, Switzerland, Tunisia, United States of America, and Zimbabwe. Representatives of the Organisation for Economic Co-operation and Development (OECD) and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank also spoke.