UNCTAD is launching a new effort to help wartorn countries rebuild their economies through increased investment flows. The first such initiative will be carried out in Rwanda, for which the government of Germany has provided 220,000 euros.
The initiative, called "Invest in Peace", grew out of previous UNDP work in Sri Lanka, where UNCTAD conducted an investment policy review (IPR) last year that drew heavily on the concept. Countries just emerging from conflicts face additional challenges in attracting investment, going beyond the establishment of investment codes, promotion agencies and strategies. They need to deal first with pressing social and economic problems like unemployment, reabsorption of former military personnel into productive activity and basic institution-building and infrastructure development.
To do so, however, requires massive amounts of resources, many of which have to be mobilized externally. UNCTAD´s IPRs define the policy and regulatory framework needed to attract the sort of investment that can help countries like Rwanda generate employment, build productive capacity and pave the way for infrastructure development. Afghanistan has already requested similar assistance. "FDI is one of several key stabilizing factors we are looking at, as it provides opportunities for job creation", says Assad Omer, Permanent Representative of Afghanistan to the UN in Geneva. "With the right kind of investment policies, foreign investors can contribute critical finance, know-how, technology, and access to global markets".
But "investors can only play this role in the right environment", warns Khalil Hamdani, head of UNCTAD´s Investment Policies and Capacity-building Branch, which is responsible for the IPRs. "Even where conflicts have long cooled, their legacy creates obstacles that need to be addressed directly in order to create an enabling environment that can attract and benefit from investment. This is a major problem for developing countries that should be given greater attention."
UNCTAD plans to extend the initiative to other post-conflict countries.
