 The Dominican Republic should continue its already effective efforts to use foreign investment to diversify its economy, and Nigeria should strive to attract more investment outside its oil sector, new UNCTAD studies say.
UNCTAD unveiled Investment Policy Reviews (IPRs) of the Dominican Republic and Nigeria before morning and afternoon sessions, respectively, of the Investment, Enterprise and Development Commission.
"The experience of the Dominican Republic clearly shows that, within the right framework, FDI (foreign direct investment) can foster development, integration into the world economy and poverty reduction," Secretary-General Supachai Panitchpakdi said in introducing the Dominican Republic IPR.
Open policies initiated since the mid-1990s, the ongoing modernization of the investment framework, and the quality of the labour force have all contributed to a strong performance in attracting FDI and in diversifying the economy of the Dominican Republic, the study says.
UNCTAD stresses in the IPR that the Government's vision of leading an economic transformation towards high-value-added manufacturing and services requires further changes. In particular, investment attraction will have to evolve from one based on abundance of a relatively low-cost labour supply and generous fiscal incentives to one based on the excellence of the investment climate and the quality of the country's infrastructure.
Temístocles Montás,Minister of Economy, Planning and Development of the Dominican Republic, attended the meeting and termed the IPR "a fundamental reference work to guide the actions of our government." He said the recommendations in the IPR match a government understanding that it is important "to focus on our productive capacities in a competitive global market."
The IPR of Nigeria, introduced at the afternoon meeting, recommends that the country adopt a strategy for FDI that will spur growth outside the oil sector and lead to stronger manufacturing, including agro-industrial production.
"The experience of many countries shows that FDI can indeed be a powerful driver of development," Mr. Supachai said in presenting the study.
In Nigeria, the Secretary-General said, "The lion's share of foreign investment to date has gone to the oil sector, with very low inflows to manufacturing and services. Although FDI has helped generate significant export and fiscal revenues, it has not had a major impact on economic diversification, technological innovation, employment, and thus poverty reduction."
"The Government pledges to do its utmost best to implement the recommendations" contained in the IPR, said Humphrey Enemakwu Abah, Nigeria's Minister of State for Commerce and Industry.
UNCTAD carries out Investment Policy Reviews at the request of developing-country Governments. Now completed for 26 countries, UNCTAD's IPRs provide an objective evaluation of the policy, regulatory and institutional frameworks for FDI in beneficiary countries, with the objective of attracting increased FDI and maximizing the benefits from it.
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