In recent years, companies from developing economies have increasingly invested abroad, seeking business opportunities outside their home countries. This is a recent trend, as until the turn of the century firms from developed economies dominated global cross-border direct investment. Because developing economies are the source of these investments, understanding the impact of such outward foreign direct investment (OFDI) on the home economies where these firms are headquartered is of great importance. OFDI can contribute to sustainable developmental outcomes, by generating home country effects which promote trade, employment, upgrading, growth and other aspects of economic development in source economies. Yet, the precise nature and characteristics of OFDI home country effects remain little understood. Moreover, even less is known about the most effective policies and measures governments can introduce to leverage OFDI for sustainable development. As a result, investment policymakers in developing countries have both a limited knowledge about the links between OFDI and home country sustainable development outcomes and remain hesitant to introduce policies to harness OFDI for sustainable development.
This session will address these knowledge and policy development constraints by presenting and discussing the first draft of a groundbreaking, innovative OFDI for Home Country Sustainable Development Policy Toolkit that UN ESCAP and the World Economic Forum (WEF) have jointly developed and will launch in early 2021. The presentation of the Toolkit will be followed by an interactive panel discussion with investment policymakers from both developed and developing countries and the private sector. The aim of the panel discussion is to learn from the experiences of these countries in introducing OFDI policies, and the extent to which economies and firms are able to benefit from these policies and measures in support of home country sustainable development.
Issues to be addressed
- How can OFDI contribute to sustainable development outcomes in the home country source markets?
- How can government policies and measures promote and maximize sustainable development outcomes from OFDI? What lessons can we learn from those countries that have successfully implemented OFDI policies targeting home country sustainable development?
- What issues are most relevant for the firms engaging in OFDI for policymakers to consider when implementing home country development OFDI strategies, and adopting policies and measures?