Investment for development:

Transcription

1 Investment for development: Towards a new generation of investment policies for inclusive growth and sustainable development Anabel González Minister of Foreign Trade, Costa Rica 59th Session Trade and Development Board Geneva, September 24 th, 2012

2 Content 1 The starting point 2 The case of Costa Rica 3 The global competitive scenario: Where do we stand today?

3 The starting point FDI is a powerful engine for growth and sustainable development Key points for setting the stage to maximize the benefits of FDI: A B C Embedding investment policy in the national development strategy Aligning investment policy with policies in other areas Making investment policy consistent over time

4 The case of Costa Rica: Evolution of FDI Agroindustrial Sector First contact centers Consolidation of CR as one of the main FDI locations in Latin America Pioneer of the industrial sector 1 st leading medical devices company Blue Chip companies

5 The case of Costa Rica: Evolution of FDI Towards increased sophistication of production processes Sub assembly Assembly Manufacturing and Assembly Design and Engineering Research & Development Parts and components assembly Sub-assembly of components Textile maquila Devices class I Product assembly Extrusion Injection Thermoforming Precision engineering Product assembly Re-design of products Devices class II and III Product validation Re-design of processes Automatization New products design Design of new processes (BTC a/ ) Prototype testing Pre-clinical and clinical studies Packaging Low cost labor Access to highly skilled labor pool Source: CINDE, 2011 Notes: a/ Business Transformation Center.

6 The case of Costa Rica: Impact of FDI

7 The case of Costa Rica: Impact of FDI Costa Rica: Evolution of FDI, (USD millions) Stock of FDI, selected economies, 2010 (% GDP) 2'500 2'000 1'500 1' Source: COMEX using Central Bank of Costa Rica data Costa Rica: Balance of payments, (% GDP) Source: OECD based on UNCTAD FDI data FDI, selected economies, (net inflows as % of GDP) Source: OECD based on IMF data Source: OECD based on World Bank data

8 The case of Costa Rica: Impact of FDI Costa Rican: Evolution of exports, (USD millions) 12'000 10'000 8' products 6'000 4'000 2' countries Source: COMEX with PROCOMER data

9 The case of Costa Rica: Impact of FDI 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Structure of industrial exports by intensity in the use of factors of production 8.5% 15.5% 36.2% 23.5% 12.8% 16.3% 14.9% 39.0% 36.3% 14.2% 20.4% 25.9% 12.9% 4.0% 19.6% Science-based Scale-intensive (K) Natural resources-intensive Labor-intensive (L) Differentiated product Source: CINDE, PROCOMER Costa Rica: Top exports 2011 Integrated circuits and electronic microstructures (18.02%) Precision and medical equipment (11.92%) a/ Banana (7.41%) Pineapple (6.91%) Gold coffee (3.56%) Other food preparations (2.99%) Pharmaceuticals (2.34%) Textiles (2.15%) Electric cables (2.09%) Palm oil (1.93%) Source: Procomer, Comex, 2012 Note: a/ This sector comprises IV sets, medical prosthesis and other medical devices

10 The case of Costa Rica: Impact of FDI Costa Rica: Evolution of exports in services, (USD billions) Others IT and Business Services Tourism Source : COMEX based on data from Central Bank of Costa Rica

11 The case of Costa Rica: Impact of FDI Costa Rica: Participation of global value chains in total exports, Share of high tech exports in manufactured exports, selected economies 0.4 GVC Exports 37% Other Exports 63% Costa Rica Korea China Ireland USA Mexico OECD Suriname Barbados Brazil LAC Finland Bolivia Ecuador Argentina Paraguay Peru Spain El Salvador Guatemala Chile Colombia Venezuela Nicaragua Honduras Jamaica Trin &Tob Uruguay Source: COMEX using Central Bank of Costa Rica data

12 Key drivers of investment in Costa Rica Strategic vision proactive and coordinated approach Attraction of FDI Interagency execution Sound business environment Political and economic stability Export processing zone regime Solid export platform WTO + 12 PTAs Robust air transportation network Educated work force Quality of educational system 1 st in LA (WEF) Cost competitive Privileged geographical location Middle of the Americas Proximity to US market

13 The new global competitive scenario: Where do we stand today? Opportunities from unbundling of productive processes Key challenges: Continued attraction of FDI Consolidating, growing, upgrading and harnessing investment for sustainable development The role of UNCTAD s Investment Policy Framework for Sustainable Development

14 Investment for development: Towards a new generation of investment policies for inclusive growth and sustainable development Anabel González Minister of Foreign Trade, Costa Rica 59th Session Trade and Development Board Geneva, September 24 th, 2012