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particularly among the Asian and African countries, such as Ghana and
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Morley, David - The Cambridge introduction to creative writing (2011) - libgen.li
particularly among the Asian and African countries, such as Ghana and Kenya. 15 Role of Investment Promotion Agencies The number of investment promotion agencies (IPAs) of national and local governments has grown at least five-fold over the past decade, seeking to attract foreign investment around the world. 16 Forty of the 47 countries in Sub-Saharan Africa have national IPAs; South Africa has over a dozen sub- national IPAs. Many other countries, including Kenya, Ghana, and Mauritius, have established other investment promotion intermediaries such as free-zone development bodies and sectoral agencies. Asia is also a focal point for IPA activities. China alone has 31 IPAs, mostly at the provincial level, and hundreds more intermediaries, including economic and technology development zones and municipal promotion offices. India is the host to a similar number of state-based IPAs, where government promotional efforts are also largely devolved at the subnational level 03-Chap3:03-Chap3 10/10/06 10:08 AM Page 158 CHALLENGES “ AT THE BORDER ” 159 The nature of investment promotion activities suggests that quasi-gov- ernment agencies maybe best positioned to fulfill the IPA function. 18 Sub- Saharan African IPAs operate within the public sphere but tend to be more autonomous than agencies in other parts of the world. No African IPA is fully private or has joint public-private status. In addition, African IPAs tend to be more reliant on funding from multilateral donors than agencies in other developing countries (figure 3.11). Recent cross-country analysis suggests that, for each 10 percent increase in IPA promotion budgets, the level of FDI inflows increased by 2.5 per- cent. 19 African IPAs on average have sufficient funding. The median IPA budget of $626,000 in Africa is twice as high as the median IPA budget in a low-income country and 28 percent higher than a median IPA budget in an upper-middle-income country (figure 3.12). However, the range of budgets in Africa is wide, evidenced by much higher mean budgets. Beyond the scope of the standard services associated with attracting investors, new activities are being undertaken by IPAs to provide post- investment services. These services are important because they attract new investors and investments through the linkage of existing satisfied investors and encourage the reinvesting of FDI interests. Asian IPAs have been directing their attention toward how to secure and expand existing FDI by improving investor aftercare. By comparison, SSA agencies tend to devote a lower share of resources to investor servicing but more to investment generation. On average, 46 percent of the budget in SSA IPAs is spent on investment generation but only 20 percent on investor servicing. For comparison, the corresponding figures for other developing countries are 33 and 31 percent, respectively. 20 Experience indicates that assigning IPAs as one-stop-shops is not the best option. The one-stop IPAs have seldom met with success, because regulatory authorities are usually unwilling to fully relinquish their reviewing or approval authority. As a result, what is intended to be one stop often turns into an additional complication in the investment process. Afar better solution has proven to focus on simplifying the process itself, which argues for IPAs’ policy advocacy. Managers of foreign companies can provide firsthand accounts of the investment environment and how it affects their businesses, and IPA staff can channel this feedback to relevant government bodies as part of their policy advocacy efforts. Another aspect of IPA services that is receiving increasing attention is maximizing the beneficial impact of FDI in the host economy. For exam- 03-Chap3:03-Chap3 10/10/06 10:08 AM Page 159 |