UN Geneva - Multimedia Newsroom : UNCTAD: Press conference - World Investment Report 2024

Good morning. Good morning, everybody.

And welcome

to the launch of the World Investment Report 2024. Welcome to those here Off line

and those online participating in this launch

news conference we have with US Secretary General

Rebecca Greenspan

and UN Trading Development's head of the Investment Research branch, Richard

Baldwin,

Secretary general, address you briefly with

a general overview of

the main findings

and the organization's

take on

the way. The way forward

and our colleague Richard

bwin will then

expand a bit on technical aspects and more nuance. So

you can also direct afterwards. Um, the

the questions

appropriately. Thank you very much, Secretary General. Thank you.

Welcome to to all of you to the launch of the World Investment report 2024.

Uh, you know that this is a very important report.

It is a reference, uh, all around the world

and we are very happy.

Sorry.

I need some water, baby.

And, um, we are very happy to present

the main trends that we found,

uh, this in in this year's report.

So,

uh, maybe it's important to say that when we talk about investment,

we talk more than about capital flows.

Yes,

we talk about unlocking human potential, fostering environmental stewardship

and pursuing a more equitable and sustainable world.

And in this year, world investment report

we found

we found,

uh, two,

main,

uh,

a trends that we want to share with you.

The first is that global foreign direct investment

remains weak for the second straight year.

Uh,

you have heard a saying that a part of the problem that we see in terms of the prospects

of sustainable growth for the

uh developing countries is precisely that we find weak

trade and weak investment and they are interconnected.

And so weak trade and weak investment also

mean for the developing countries weak growth.

That is what we are finding

precisely, uh uh, in in the estimates of all

the international organisations ourselves. But also,

uh uh, the World Bank and the IMF.

So

in the FD I in the foreign direct investment,

we found that again

FD i foreign direct investment week for a second straight year.

The other thing that is worrying

is that the funds directed towards the SDGS

and the related sectors to the SDGS

it fell 10% last year.

They fell 10% last year

a worrying trend. We will also talk about

bright spots Uh

uh, within this panorama. But, uh, these are two very worrying trends

that, uh, we highlight in the report of this year.

Uh, we also,

uh, corroborate again that since 2019,

the geographical distribution of manufacturing projects

mainly shifted towards location closer to major home markets

in Europe and the United States,

and that West Asia, North Africa and Central America

are emerging as strategic locations for manufacturing for the multinational

enterprises for the NA multinational business.

So

there is a little bit of decentralisation

in terms of investment

and specially on manufacturing

projects.

So it's central in in fact, the Central America and Mexico.

Yes,

uh, what we found that have benefited together with West Asia

and North Africa.

Now, over our general assessment,

uh, we want also to talk about the global and regional investment,

total investment landscape

and the challenges and opportunities that we identify,

uh, in in this panorama.

So, with respect to the decline in foreign direct investment,

uh, we found that it decreased 2% last year. Foreign direct investment

decreased 2%

and

in a way, it stabilised around $1.3 trillion.

So,

uh,

nothing major is happening in terms of global

direct investment is weak is going down.

Not dramatically.

Uh, so a very stable, but

is is a

is a stable point in a

very weak investment.

But,

uh,

uh if we

dig a little bit into the figures

and

we take away,

uh, the small number of European Condit economies if we exclude those,

uh,

the decline is sharper is 10%.

And I think that the Richard maybe here you can expand a little bit.

Why? This 10% is more important than the 2% decline,

and this decline for the second consecutive year is driven by

increasing trade and geopolitical tensions in a slowing global economy.

So,

uh, this is a very, uh,

challenging, uh,

trend for the developing nations. As I said before,

because developing nations

saw a decline of 7% in FD. I and I know that these are a lot of figures, but,

uh, if, uh, we want a little bit of clarity

For the

developing countries, the decline is 7%.

For a global FD I, the decline is 10%

but a decline for developing countries is much more

damaging yes than the average of the 10%.

The other trend that I

mentioned at the beginning

that is very worrying for us is the decline in the investment related to SDG sectors,

and there again we see a

decline of 10% is a different 10% than the other. Yeah, don't get confused.

So

the sectors relevant to the SDGS declined by

over 10% in terms of total investment flows.

But despite these challenges,

we think that 2024 will be better, that maybe we can see

because there are signs that there will be a modest growth

in 2024.

So

this is, you know, is is a modest growth, but it's a change of tendency.

And so we are more optimistic towards 2024.

And if,

as we say in the report, there is a

an extra effort,

uh, tweezing

the financial conditions and

for investment facilitation.

So if we could have these two things combined

that will support our more optimistic view for 2024 we

think that the financial conditions will will see uneasy during 2024

and if we can support the efforts of countries on investment facilitation.

Maybe that can unblock obstacles that the developing countries,

especially are facing in terms of attracting FD I.

So regional variations,

uh, interesting

that we have seen

a much more resilience

in Latin America and the Caribbean,

where FD I only went down by 1%.

It went down by 8% in developing Asia

it by 3% in Africa

and the inflows to Europe and North America.

We're down much more special.

You correct me, Richard.

But because mergers and acquisitions are very weak and mergers

and acquisitions are specially important for the developed world,

they happen much more in the developed world.

So

the the, uh decrease for Europe and North America is even, uh

stronger

is 14% for Europe and 5%

for North America.

Uh,

let me,

uh,

go now

to one bright spot that maybe is worth mentioning

that is that the least developed countries the land lock, developing

countries

and then small island

developing states saw a slight increase in FD I.

So that is good news, because these are the most vulnerable countries.

let me, uh maybe go now to,

uh what is happening in sustainable finance because that is, you know,

part of our worrying.

Um

uh, the worrying trends that we shared with you

and, uh, what we saw

in 2023

is that there was a marginal growth

in what we call sustainable bonds.

But the inflows into sustainable investment flows dropped

by 60%

by 60%.

So the source

of financing for sustainable development

is not yielding the results that we expected,

uh, and is not at as stable as we thought

it

was.

And part of it is because all

the discussion about green washing

and,

uh, the the the green washing concerns in terms of the investors demand

have really beaten, uh,

here because, you know, more and more

the investor is demanding

more impact and more.

Uh

uh uh

uh,

reporting more credible, sustainable investments. So not everything goes,

and that's,

you know,

I, in a way is on the one hand, is a is a bad news, but on the other hand,

it means that the investor is becoming more demanding

and looking much more critically, as at at everything that is called

green investment.

So

an opportunity

to be more serious and to fight brainwashing.

On the other hand,

worrying trends

if you don't trust the system

so the money won't be flowing

towards the sustainable funds.

So robust sustainability disclosures, external auditing,

third party ratings will be important to maintain

the enthusiasm

that we saw at the beginning with respect to the sustainable funds

And the the other point that the report

uh

uh,

emphasise

is the negative spillovers

on

the SME S because of sustainability standards,

we have seen that we cannot overburden the SME S

with the standards. We need a system that is credible.

We need a system that have standards.

But at the same time,

if we have many standards and many things happen,

you know what we many times call the spaghetti bowl of standards

is very difficult for the small and medium sized enterprises to navigate

such a complexity. So we need a system

that is credible,

uh,

that allow SME S to participate in global supply chains.

But we need a system that will be more straightforward

and less complex.

Sorry.

let me go now to some of the opportunities that we also

see,

uh,

to strengthen the performance of investment

and,

support

the,

uh,

moderate optimism that we have for 2024.

So

again,

balancing transparency with reducing undue burdens on businesses.

We think that is important.

So we need a

more consensus and less different system competing with respect to transparency.

The other,

uh, important thing that we can do to help the process of investment, obviously,

is digital

digitalization can help. Digital governance

can help

to have a business and investment facilitation.

Uh, for private sector development and FD I attraction in developing countries

with the

A more digital procedures that I also

bring transparency but also bring easiness into

the the the all the whole process and

the whole institutional processes is very important.

And,

uh, the push for investment facilitation is is showing positive trends.

Uh, so we call to support countries in the UN trade and development,

uh, action menu for investment facilitation that we,

uh, published in 2016,

uh,

shows that the number of online

single windows in developing countries has almost quadruple from 13

to 67 from 2016. I understand to 2023.

So,

uh, there is really, uh,

a

positive dynamic in developing countries.

to have single windows to do investment facilitation.

And the our, uh

uh, online,

Uh uh, device has proven that developing countries are taking it seriously

and has quadruple the single windows, uh, on investment facilitation

from 13 to 67 countries.

And we saw

the same in developed countries,

uh, where it has, uh, more than doubled

information portals for businesses and investors.

Re registration in developing countries also expanded from 82 in 2016

to 124

in 2023 24.

So

there is a,

uh, an acceleration in terms of, uh, investment facilitation.

And this is a trend

that is important for us to support, especially

in the weakest countries. And, uh, that have the weakest institutions.

So this bottom up cost effective approach to digital government for, uh,

investment facilitation,

uh, trying to benefit all businesses foreign and domestic, large and small.

Uh, is, uh, an important tool that we could,

uh, strengthen towards 2024

and that can

counter counter,

act a little bit with respect to the weak, uh,

investment and foreign direct investment towards

developing countries that we are seeing

and towards special

SDGS investment.

So

with that I, I am here. And I passed the floor to Richard to make more,

uh, to expand on the main trends that we have found in this very important report.

The investment,

uh,

report the world investment report that we are launching today. Thank you.

Thank you very much. Uh, SG.

I will

give some brief more details on each of the four areas that this report covers

the first part and the first chapter is on global investment trends.

We also monitor on an annual basis in the world investment report,

trends in investment policies,

both national investment policies and international investment agreements.

Then we monitor trends in sustainable finance.

And finally,

I'll say a few more things about the theme

of this report on investment facilitation and digital government.

First of all, starting with the trends.

As the SG indicated,

there is a huge difference between what happens in

global investment trends in developed countries versus developing countries.

In developed countries,

flows are much more dependent on intra firm financial flows

and on mergers and acquisitions, as

SG mentioned,

and as a result of that,

flows in developed countries are much and much more volatile and there are

many different big swings in investment flows in

especially European countries, through which a lot of investment flows.

There are so called

conwit countries,

and that explains why

the global trend, the headline number of minus two per cent

if we remove these big swings in countries such as Ireland, the UK, Netherlands,

Luxembourg, Switzerland and so forth.

If we remove those trends in

developed countries, then

global flows are down by 10 per cent.

So that's a more realistic number to keep in mind.

If you really want to consider

the capacity of international investment to add

assets productive assets, especially in developing countries in

developing countries, FDI

flows are still much more indicative of what's really

happening in terms of the creation of productive capacity,

creation of infrastructure and so forth.

So as a result, our report, of course,

focuses much more on what is happening in developing countries.

Just to explain a

bit more detail about some of the

trends already mentioned by the secretary general,

I

think one of the biggest drivers of what happened last year

was the downturn in international project finance.

If we look at the different components of international investment, which include

new Greenfield investment projects in industry, new international project,

finance in infrastructure

and mergers and acquisitions that we looked at already.

The biggest driver of what really happened last

year was the downturn in international project finance

as a result of much tighter financing conditions.

Now

that downturn in international project finance has several

knock on effects. The first one

is

that

SDG

investment or investment in SDG relevant sectors

is really affected by that.

Because SDG investment is mostly about infrastructure,

it's mostly about physical infrastructure, transport, infrastructure, power,

water and sanitation

energy. So

most of these projects

they rely very much on project finance and when

you have a global downturn in project finance that affects

SDG investment.

A second knock on effect of this downturn in project finance is the effect it has on

the poorest developing countries

because

the more we move from

developed to developing to the least developed countries,

the higher the incidence of project finance in their total investment flows.

So again, the downturn in project finance really affects LDCs

more than it affects other countries,

and the third knock on effect is, of course, on investment in the energy transition

because again, renewable energy projects, especially the biggest ones,

very much rely on project finance to be realised.

So

that is really a big driver of what happened last year.

But there were some bright spots as she mentioned one already

in some of the more vulnerable economies.

But another big bright spot

we see is in the increase. In Greenfield Investment,

Greenfield investment announcements

were up not by much just by two per cent.

But they were up by more in developing countries,

and that bodes well for future investment in industry projects. And

some of that investment S,

DSG mentioned, is in manufacturing and is in some

of

the markets that have easier access to the biggest international markets.

So the markets that are close to Europe close to the United States

and markets from which

that are close to China and to which manufacturing capacity is

gradually shifting in South East Asia, for example,

so that increase in Greenfield investment announcement

in manufacturing is a big plus,

especially because

we have been registering for more than 10 years

a gradual decline in Greenfield investment in industry.

So

the fact that 2023 shows an uptick even if it's only two per cent is really

a reversal of the trend that has some potential for positive news in future

and

just to conclude the part on the overall investment trends.

I think another important one to mention is the big

increase in investment in international investment in critical minerals,

almost a doubling of both investment projects and investment values in

both the extraction and processing of

critical minerals for the energy transition.

So those are some of the most important

trends signalled in the first chapter of our report

very briefly on the policy trends.

We had

slightly fewer international investment policy measures

registered last year around the world.

About 25 per cent fewer policy measures,

but still in line with the average number of measures

that we monitored over the last five years or so.

And most of these measures continue to be in

the direction of facilitating and promoting more investment,

especially in developing countries, again,

a big contrast between developed and developing countries.

In developing countries,

86 per cent of policy measures are in the direction of promoting

and facilitating investment, whereas in developed countries,

57 per cent so more than half of policy

measures are actually about restricting or regulating investment,

and there is a big increase in measures

aimed at screening international investment coming in.

So a big difference there

again looking mostly at developing countries.

Investment facilitation, which means basically

increasing transparency of rules and regulations for investment,

providing information to investors,

streamlining administrative procedures for investors.

That's the biggest effort that's being made in developing countries.

So what we remark in our report is

that this weak investment that the secretary general signalled

certainly in developing countries is really not for lack of policy efforts.

There are a lot of policy measures being

taken in developing countries to facilitate investment.

I'll

say more about investment facilitation a little bit later when I can come to

the theme chapter which as you've seen from the title page of the report,

that's part of our theme

just on international investment agreements to

conclude the discussion on policy measures.

International investment agreements,

mostly bilateral agreements but gradually moving more towards

plurilateral and regional investment agreements

are also taking up investment facilitation and

are also increasingly taking up provisions,

provisions aimed at stimulating investment

that is

beneficial to sustainable development.

So there is a gradual reform of

language in international investment agreements taking place.

This reform effort,

which has been very much pushed by

and led by,

is moving ahead.

But

we've taken stock of where we are today

on the reform of international investment agreements,

and we've noticed that still,

more than half of global FDI stock is covered

by what we call old generation investment treaties,

where these new provisions aimed at sustainable development and

aimed at investment facilitation are not prominently featured.

So there is still a lot of work to be done on international investment agreements,

a few things on sustainable finance.

But our secretary general has already introduced that topic extensively.

We see

a risk of a slowdown

as

she mentioned

only three per cent growth in bonds.

And in reality,

the growth in sustainable bonds was only really in the segment of green bonds,

whereas other segments

of their social bonds sustainability linked bonds were really not growing as fast

and a big big decline in

sustainable investment funds,

ETFs and other funds that are aimed at at

portfolios that support sustainable development.

So a real slow down there and there's a risk

of increasing.

Let's say a backlash is taking place in some markets and

increasing resistance to some of the prerequisites for sustainable investment,

especially sustainability reporting

because of the demands that it places on companies.

There are some things that can be done,

and I think one of the more obvious areas is where governments themselves

own or manage

such funds, such as in the case of public pension funds or sovereign wealth funds.

And we monitor also

what these funds and how these funds

behave when it comes to sustainability reporting

58 out of the 100

public funds that are monitored by

publish a sustainability report. So there's still quite a lot to be done.

42 do not report,

and only very few actually have targets for

the reduction of assets in their portfolio that are

that aim that include fossil fuels so that

there are very few targets for the

greening of investment portfolios of these funds.

So there's still a lot of work that can be done

to conclude with the last part of our report and the

theme chapter of our report on investment facilitation and digital government.

Their

investment facilitation, of course,

at this moment is really top of mind for investment policy makers around the world.

We just had a new agreement concluded by

a

group of members of the WTO

in February on investment facilitation for development and

as I mentioned in international investment agreements,

this is becoming ever more important

and in national policy measures. As I said earlier,

investment facilitation is really 2 to 4.

We see that this is beneficial.

We measured the impact of investment

facilitation measures and especially digital investment facilitation

measures on the capacity of countries

of developing countries to attract investment.

And we saw

that improvements of the quality of

online single windows for investment promotion

can lead to

an eight per cent increase in foreign direct

investment for each point of quality improvement according to

scale on the quality of information portals

and online single windows for investment promotion,

you will see these numbers in the report and we have an online

global enterprise registration website where you can see for each country how

we rate the

presence and quality of information portals and single windows.

What we see through that research is that there

is really a leapfrogging opportunity for developing countries,

and especially the least developed countries.

Some of the portals that we have identified in the least developed countries

are of the highest quality and can really be compared with

some of the portals that you can find in developed countries.

So there is a real leapfrogging opportunity there.

But most of these portals are developed with technical assistance,

are developed with support of organisations, including,

of course

and so technical assistance is really a very important aspect of this.

And it is not that easy because while we see

some of the poorest countries have fantastic investment facilitation portals,

others are really in difficulty in promoting these or producing these.

And if we see many failings, we measured them as SG mentioned both

when we first launched the Global Action Man for

Investment facilitation in 2016 and we measured them again

this year and we see that some of them have actually closed.

Some of them have real difficulty in maintaining updated information,

and we also see a phenomenon that we have dubbed

single window dressing,

which is basically where you have

portals where they look beautiful at the first instance.

But if you click through them there's really a lot missing at the back end,

so there's still work to be done. And there's really a need for technical assistance

just to conclude.

We do see that these portals on business and investment facilitation are a

real opportunity to act as a stepping stone for wider digital government.

And because

when we look at our surveys of

investment promotion agencies and surveys of investors,

we know that one of the biggest obstacles

to the attraction of investment in general,

but especially investment in sustainable development goals,

a key barrier to that is weaknesses in governance and

institutions and digital government can address precisely those weaknesses.

We really see that there is a very close link between

the establishment of business and investment facilitation portals,

the expansion towards wider digital government and

the capacity of countries to attract investment.

With that, I conclude, and I'm happy to answer questions. Thank you.

Thank you very much, Richard, for diving deeper into what Secretary General

advanced. In terms of main findings, challenges and opportunities, we have

already a few requests to take the floor.

You know the rules.

Notify yourself, please.

Name and media outlet and to whom you direct your question, please. Thank you.

Um, hi. My name is Christo Vogt.

I'm,

um, uh, working for a

F

pat,

Uh, here in Geneva.

Um, Secretary General And, uh, Mr Bowen

I.

I had two questions. If I May 1 on, uh,

the geographical re

redistribution you were talking about, uh, getting closer to the main markets.

Uh, is that a trend that you see

continuing in, uh, 2024?

Uh, how much is that link to the tensions, for example,

that we have with between the US and China.

And then the other question I had was

about all the rules on greenwashing green investment,

because you seem to see it as, like, a double edged sword on one end. It's great

because it makes for better

quality of investment.

On the other hand, it seems to hamper, uh, the flows of, uh, of some money.

So I was just wondering if it's something you can measure and how When do you see

that the benefits are actually greater than,

um than the

well than

not a great side. Thank you.

Very good questions. Um,

with, uh, let me take the first and I will give Richard the second

with regards to geographical, uh, redistribution

A

We see

some decentralisation efforts,

but not as strong as we expected. After covid.

You know, after covid.

Uh,

in a way, the narrative was that we will, uh,

look for resilience of the global supply chains

by

re not relying,

uh, overly

in one supplier

so that we will have a more, uh, an effort to decentralise suppliers.

And that could make

AAA

more inclusive. Globalisation process, Yes. Including

more developing countries in the global supply chains.

We are seeing some decentralisation efforts.

Uh, that is what we what we said from 2019 to 2023

uh, Mexico has benefited. Costa Rica has benefited,

uh,

in in, in, in, in Central America and Mesoamerica,

Uh, we see Vietnam benefiting also from some of it. We see, uh, as we said, I think,

uh, in in

West Africa

with

some, uh uh specially in in the supply chain of, uh uh of specific sectors.

Uh,

but the trend is not as strong as we expected,

because there are two other trends that we see.

One

is that we see some evidence in the in trade

of French Shing

some evidence

we These are very,

uh,

early days to see if

we have really a very strong trend in any of these,

uh uh,

possibilities.

But we see some friends showing

happening.

Uh,

the trade division made this, uh, effort to,

uh according to the pattern of voting in the UN, see if trade between

countries that had similar patterns of voting went up and it went up

and and the,

um, near shoring near shoring went up, but very much less than French shoring.

So these are two trends that we see, uh, happening.

But the other one that was in another, uh, document that was published,

Uh, not long ago by the Division of Investment.

We also see a tendency

to be more resilient

for more resilience in the supply chains. By

integrating vertically within the countries, the big countries

have also a tendency for vertical integration.

And so that could

weaken

the possibility of investment in of

a

bigger investment in the global supply chains. You see,

so we see these three, we see three things happening at the same time.

Which of these trends will be stronger or will predominate?

Uh, I think that is still early days to say

so.

A little bit of decentralisation that is more inclusive. That

that is

good news.

Uh,

a little bit of vertical integration that we don't know

how far it will go because it means higher costs

in the

in the supply chain. And some,

uh, firms and private sector is reacting against that,

because cost cost and prices could

go up

and

some friend showing happening. So

a

mixed picture

is not one tendency.

Yeah, absolutely. Dominating.

Uh,

and we need to continue monitoring what

will be, you know, what is it

that will predominate as we look? Uh, forward.

So But maybe you can bring the greenwashing

a question.

Sure, thank you.

On that question in particular.

And

it is true, as the SG said, that

investors are increasingly demanding

more information to be able to make informed investment decisions

in sustainable finance area.

And that's leading to a proliferation of new standards we have

had in the International Sustainability Standards Board

that was created just last year.

That has issued new standards,

and many countries are now pursuing implementation or adoption of standards.

So that's moving forward

and

at the same time, There's still a lot of work to be done.

If we look at

some of the

vehicles, the investment vehicles that I talked about earlier,

especially the investment funds,

only about 20 per cent of their portfolios at this moment is a net contributor

to the greening of the environment,

so only about 20 per cent of their portfolios it's measured in this report.

What we are advocating in this report is that we need a very balanced approach.

So on the one hand, investors need

the information and the standards are helping

to

create that information and they act as a

prerequisite for sustainable finance. On the other hand

can be

a

burden, especially on smaller companies.

So

in order to avoid

a

potential further backlash we have already seen

in

some countries and further resistance to new standards, it's really important

to balance

the request for information on the part of

of investors and

the

standards imposed on companies and especially small companies and especially

those companies in developing countries.

We're seeing that these kind of standards reporting standards both coming

from standard setters but also from other type of legislation,

are becoming or risking to become a barrier to trade and investment.

So in order for small companies in developing

countries to continue to keep access to,

for example, the European market,

they increasingly need to produce higher quality

climate disclosure and sustainability reporting,

and

that we need to balance with the need for

these companies to continue to have access to markets.

And well, one of the activities that

carries out in this area is for technical

assistance to help these countries and these companies

cope with increased demands for sustainability reporting.

Thank you. Thank you very much for this man. Another one here

from the room before I think we move online. Thank you.

Yes, Uh, my name is Jamil

Shade

and journalist from Brazil.

Um, Mrs Greenspan, First of all, if you could talk a little bit about South America,

uh, and the situation specifically of Brazil

Um um, obviously, with, uh,

with some of the trends in the case of Brazil going down,

uh, in 2023

and secondly,

and secondly, um, if you could also comment on the rise of,

uh, the extreme right with nationalistic, uh uh,

positions, uh, denial of, uh, climate change

and the fact that some of the countries, including our region,

Argentina detaching itself from agenda 2030.

Uh, how much all of that,

uh, including Europe

could also impact, uh, the trends that you are mentioning

put questions to. I was, uh, looking for the Brazilian numbers

because, uh, we had them in the

A

Latin America. Uh, press release?

No, I

think

so.

Well, uh, first of all, I said that Latin American, the Caribbean was more res

You You showed more resilience

towards the downward trend

that we have seen

in a foreign direct investment.

And, uh,

sorry. Let me let me look at the numbers to tell you exactly.

Uh,

so, uh, we we found that Greenfield FD I That is what the Richard referred to before,

Uh

uh,

What incr

the announcements of Greenfield FD. I increased,

uh, for large projects in Brazil and Chile.

And part of this is also because,

uh, Latin America and

the Caribbean have a huge potential with respect to renewable energy.

Yes,

and they have a much better energy matrix

in renewables.

So if we think that a lot of the new,

uh technologies and the new sectors will require,

uh, intensive renewable energy to be green products and to, uh,

comply with the standards.

We can understand that

Africa and Latin America

may have here

a comparative advantage that they they can exploit.

And, uh uh, you can see that in some already in some of the,

uh, Latin American countries, specially South America, like you say,

that is very also rich in the critical

minerals that are necessary for the energy transition.

So if we think about the energy transition as presenting two

opportunities for, uh for these countries, one

is adding value

to the critical minerals that they have and participating,

participating with more value added in the supply chain.

That's one possibility. But the other possibility

is also to attract

in a a renewable, energy intensive industries into these countries.

So, for example, chile is betting on

green hydrogen.

Uh, precisely because it has a lot of solar and wind that they can,

uh, uh, use uh uh, as renewable energy in Brazil the same thing.

They they go for biofuels. Also, they have been very strong on it,

but also for, uh, renewable energy. Uh uh. Especially well, Brazil has a lot of,

uh um

uh, hydro

energy But if you look at the,

uh, total energy matrix in Brazil is much more renewable than the rest of the world.

So,

uh,

in 2023 just to give some of the

of the, uh, numbers,

Latin America and the Caribbean attracted 19 mega projects valued at more than $1

billion each

and 17 of them undertaken by investors outside of the region.

So a lot of foreign direct

investment, I think that the

major ones are in the big countries. Yes, uh, Brazil and Mexico continue to be

the two big countries that attract more of FD. I,

uh but, uh, the 10,

uh, if if we look at the,

uh, at at the charts,

uh, you can see, uh, where the main,

uh, projects are being

are being funded.

Um, the main

countries that are investing,

uh, are

first the US, then Spain,

then,

uh, the Netherlands that have a mix. You know, we never know exactly where.

It's like a conglomerate of,

uh

of countries. Uh, Luxembourg,

Canada,

Uh, Republic of Korea, France, Germany,

Uh, are the main,

uh, countries, uh,

with investments in in South America,

with respect to

the trend

against the SDGS what we have to say. There is that the,

uh you know, the SDGS is the only

call for global solidarity.

And the improvement of the lives of the population is a

an internationally agreed

A

objectives that have to happen at the national level.

So

to get away from the SDGS as a

national proposition,

uh uh,

it will be we have to explain in the national context. Yes,

because the rest of the countries continue to be committed

to the SDGS.

And,

uh

well, uh, maybe

there has been, like, a narrative of the SDGS of something very abstract,

but it is not.

It is about

fighting. Poverty is about fight fighting. Hunger is about fighting.

Malnutrition is about,

uh

the, uh, well being of the vulnerable population. So

I don't really know if

this is a reaction towards a narrative that looks like an imposition

from the international.

Uh

uh, from the international institutions. Or

but if we if you look at it in a more

concrete

way from from a more concrete lens,

you know, probably,

uh, these are objectives that

the national governments will have to respond to.

Uh

So,

um uh,

in my in my own view. And we have said this in in several of my speeches.

You know, really, the DS are too big to fail

because they are about the well being of concrete people is about a

people centred agenda is about

the capacities.

The possibilities of, uh, somebody to have access to education, to health

and to basic human rights.

Uh, we will continue to be a voice in favour of this agenda.

Yes,

Uh, obviously,

countries have their,

uh,

their own, uh, political processes.

But if you I I my goal will be to look at the SDGS and their concrete,

uh, formulation

and, uh,

you know, generalisations. Uh,

it won't help,

uh,

to, um to respond to the needs of the most vulnerable people of the world.

You know, the SDGS is about that.

And sometimes I hear very, very strange.

Uh

um, explanations about the SDGS, even about the

the the colour,

you know, symbol of the SDGS

and,

uh uh, I.

I really don't understand very well

where this come from.

Because, as I say, when you look at these specific, uh,

at the objectives at at the indicators

uh, they are about the well being of people is the most basic aspirations

that humanity can have. So,

uh, we will see. We will have to see how how that develops. Yeah.

Thank you. Thank you.

Secretary General, we have for the moment,

we don't have any more questions here from

the journalists here at the PA.

So I go on to those following this launch

online via Zoom.

The first question from

Alma

Yadin

Lebanese TV Musa

Musa,

please.

Thank you very much. I have a question,

uh, maybe outside your report, But, uh, in my view,

it's very important to developing countries.

Last week, uh, the EU, uh, decided to facilitate the recruitment of talent

from third countries who live outside the EU,

uh, to make the EU labour market more competitive.

My question How you see this decision and especially in terms of,

uh, the impact of, uh, the development in the developing, uh,

developing countries.

Thank you.

Uh, I miss that,

but, uh, let me let me I missed the agreement.

Uh

uh, or the announcement. So we will have to look at

it in detail,

but, uh, E everything that will allow for, uh,

a

more ordered and legal MI migration is is is a good thing.

My my problem is that, uh,

we need to support countries to develop so they can retain talent.

And, uh, we see,

uh, tendencies for brain drain.

Uh, in many countries, you know, we were just in the small Island Developing States

conference in Antigua and Barbuda, where the Caribbean suffer from that, you know,

their doctors and their nurses, Uh,

they studied in their countries.

They have a good education, and they go away because they are better opportunities.

So I think that we have the responsibility as a global community

to help these countries to develop, to diversify their economies.

And this is very much

to the,

um

a basic

spirit of, uh,

Anton.

Yes, because that that from the beginning

have said

that what you produce matters

that, uh, we need to diversify the economies that we need,

uh, to add value that we need to have employment opportunities for our people that,

uh, decent jobs are important

and that we have to support the development

of these countries.

Uh, if not, the imbalances will deepen.

And, uh,

so I will

expect not only for uh,

the

regular migration of talented people.

But I will expect

to, uh, really take seriously the Marrakesh agreement

and

to allow for migration

to be safe,

to be orderly.

Uh uh, uh

uh, to happen in an orderly matter, uh, And to protect also,

uh, a vulnerable populations. When? When? When they migrate.

Uh,

but, uh, if you will have only,

uh,

if you won't support the development efforts of these countries for

a more diversified economy and more opportunities within the countries,

I think that the imbalances will

not flattened.

And so,

uh,

I think that both things will be important.

Thank you. Thank you. Secretary General

Isabel

Saco

FA news agency.

Yes. Good morning.

Uh, thank you very much for taking the time to present the this, uh,

interesting report.

Um, my first question

question is, um

um the critical minerals that you mentioned, uh,

the the big push that the investment has seen in this area.

And, um, Secretary General, uh,

said that Latin America has a lot of potential

in this and has a lot of critical minerals.

I would like to know if you have, um

uh, the, uh,

you know, the share of, um

the of this type of investment that Latin America is attracting,

Um, where the the investments come from, especially,

this is on the side.

And, uh, also, uh, I would like to ask on the a comment that, uh, was, uh, uh, made

on the on the fact that, um

uh, when you referred policies, uh, investment policies and policies.

You mentioned that the developing countries they are

They are doing well on this area.

They are,

uh, trying to

to facilitate investments, but they are not attracting investment.

Uh, good enough. And I would like to know why.

What is the reasons you are seeing that, um,

Why the developing countries are not sufficient,

sufficient and attractive enough for for for the international investment flows.

Thank you.

Uh,

sorry.

I will take the last part of your question,

and I will ask Richard to go into the details on on the critical minerals.

So,

uh, you are absolutely right.

I think that the developing countries have

made an effort for investment facilitation,

but still, the flows, uh, necessary at the scale necessary are not there.

And, uh, why?

Because the perception is that they continue to be very risky. countries.

And here, really, The, uh, rating agencies do not help? Yes.

And,

uh So if you,

uh

are, for example, institutional investors that are so important

that you need to have an investment grade

for the institutional investors really need to go to your, uh,

to your country

or private investors.

They will go to places they already know

or they feel more comfortable with because they

feel the perception of risk in many of these countries, despite the fact that

is very profitable,

Uh, is very high.

So that is why we have said

that we need the multilateral development banks.

We need the multilateral development banks

to crowd in private investment.

We need the multilateral development banks to take more risks.

We need the multilateral development banks to scale up the portion,

uh, that they, um

they, uh,

the participation that they have in the financing

in the total financing of the world.

And that's why we are advocates for better and

bigger and bolder.

Uh, a

multilateral development banks.

We were a voice, for example, that really pushed for, uh,

the special drawing rights to be able to be used by multilateral development banks.

So

they will have a uh uh uh They could, uh,

be able to scale up their resources

and their financing in the developing countries.

Uh, if we don't have

a mix

of these of the multilateral development banks and the, uh, public funds,

let's put it that way.

With crowding in private investment,

we don't think that we will be able to have

the flows of private investment that we need specially,

I would say, in the countries that are small and medium size, yes,

the big countries are doing better,

but the small and medium sized countries are not receiving the flows that they need.

Really for, um uh,

uh a

more dynamic and, uh,

increase their their sustainable growth possibilities.

So,

uh, as we can see this, the issues of trade,

investment and financing international financing are a very closely linked.

And that's why I think that the analysis of bank

that is so important because we look at these issues, Uh uh, in in a more coherent way,

the in in their inter dependence,

uh, really,

To achieve more sustainable investment and attract more private sector money,

we believe that the public public money is not by itself is not enough.

But without it,

we cannot really scale up in crowding private investment in a in a significant, uh,

in a significant way.

Uh,

So,

uh, I remember the report of last year the investment, uh,

report of last year that looked

at the, uh,

renewable energy investments.

And we said that when you have a combination

of national public money,

multilateral development banks

and private investment, the cost

the cost of, uh, financing went down 40%.

So the mix

is much better than when these different flows go,

uh, by themselves, specially in developing, especially in developing countries.

And that's why also,

uh, the cost of capital matters so much.

Uh, we have, uh, uh,

proven that the Africa, for example, pays between four and eight times

the interest rates that the US or Germany pays.

And so the the

very high cost of capital is really an obstacle for investment,

for infrastructure, for health or education, investment,

and also for the energy transition.

Because if we don't get down the cost of capita,

uh, it would be very difficult for these,

uh, countries to do,

uh, to make the investments that are necessary for, uh,

the energy transition and for, uh, uh, the, uh

uh,

targets in climate change.

So let me let me stop there and let me give

Richard the floor for the specifics with respect to critical minerals.

Uh,

saying first that the Secretary General has put together this

commission to look at critical minerals for the energy transition

where we have four working groups,

two of which are under the leadership and co ordination of an NTA.

And the other two under the coordinations of UE.

So,

uh,

we will see much more information on these

issues coming forward from these working groups.

Richard.

Thank you. S.

indeed, the energy transition is really affecting patterns

of international investment in extractive industries.

We see real decline already over some time

of new investments in fossil fuel extraction.

But last year we saw

a big increase in investment in mining and especially in critical minerals.

There's

mentioned earlier already some trends in Latin

America in response to the question,

but there's one country there that is one

of the biggest destinations for critical mineral investment,

which is Chile

and the other

country that attracts very large.

Both Greenfield and Project Finance in critical minerals is Indonesia.

They are not the only ones.

There are other destinations for these type of investments.

Zambia is an important one.

The United States and Canada are important destinations for investment.

And I believe the question also asked, Where does this investment come from?

The biggest investors here are China

and again United States, Canada and Australia,

which are the biggest sources of

international investment projects in critical minerals.

So

these are basically

projects that have both the extractive side,

but they also have a processing element to them.

The secretary general mentioned already that this is an attractive

proposition for countries that do have critical minerals in their soil

to add more value to it

if we look at the destination of

projects in critical mineral extraction extraction.

Last year,

about 17 of these projects went to the group of least developed countries,

but only two of those two of those projects

had a processing or manufacturing element added to it.

So there's a real scope there for further

value added to the extractive industry investment projects.

Thank you.

Thank you. We have two more questions

and then we will bring this to a wrap. Um So next one from Ravi Khan, please.

Hello?

Can you hear me, please?

Yes, we can.

Thank you. Thank you. Secretary

General,

I My question is that investment facilitation,

which is China's investment facilitation agreement

precise,

is not part of the UN

SDG agenda at all.

There is no mention of investment facilitation

in the SDG go night.

There is no mention

of investment facilitation. Why are you promoting it,

which is basically a developed country initiative?

You know, one of your predecessors,

Rubins

Recupero, had said that

H is a developing country trade union.

There are a lot of concerns among developing countries that you

are essentially adopting or implementing the agenda of group P countries.

My second

Russian is on Palestine

on

one of your divisions had done a lot of studies on Palestine.

That is the globalisation and development studies.

Israel has virtually destroyed the Palestinian economy today

what is

called

stop the Israel's destruction of

pin economy. Thank you.

Sorry, Robbie, with respect to your first question,

what is the question?

Why we are

promoting investment investment facilitation.

The

first is

on on

Pa

is all along the trade union for developing countries.

I understand, but Why Why do you think?

Uh,

so what you are saying, if I understand correctly,

is that investment facilitation is a developed country.

It's not part of the not part of the SDGs

at

all.

There's only one goal in SDG

SDG

14,

which says on fishery subsidies. But

as regards investment facilitation at

there is no mention,

the agreement is blocked at this point of time by India, South Africa

and Turkey. So why are you pushing for an agreement that is,

you know, you are supposed to represent the interests of developing countries.

India is a big developing country. Why are you going against India's stand on this?

An India stand is

India has blocked this agreement at the WTO.

Yeah, because it's

because it's a lui

national agreement. Yes,

it has. You know, India has had a stand against pur

national agreements,

and, uh,

and and there is, uh, there is a reason for India to have that position.

We are not commenting on that position of India.

They have blocked other pleural national agreements too,

because they believe that the process of pleural

national agreements

is not the right process to get to consensus within

the WTO

with respect to so So it is very important to clarify

the Indian position that I don't think that your question represents very well

with respect to investment facilitation.

The problem is that we know

that investment facilitation is important,

not only for foreign direct investment is also important

for national investment.

Uh,

the position

of a

that always has been

that without high levels of investment

and one of the things that we learned from China was precisely that

that without high levels of investment, you cannot have high growth.

And part of the problem that we have always said with respect

to the international financial architecture is

that it doesn't pay enough attention

to

in to investment rates

you cannot grow properly

without,

you know, infrastructure

investment in education, investment in health.

So it's very strange to think that because the SDGS

don't talk about investment, facilitation is not part of the SDGS.

So

if we don't have investment in education, if we don't have investment in health,

if we don't have investment in infrastructure, how are we going to,

uh uh to cope with the targets of the SDGS?

We need

investment

and small countries and medium sized countries

need

investment to happen, not only with their own resources,

because they are constrained by their own resources.

And so the voice of

an

A in favour of developing countries has always been

that the international and financial architecture has to respond to the

scarcity of savings and resources for investment in the developing world.

Because they cannot do it alone

when they are left alone, they cannot grow.

And so the reform of the international financial system has always been for

scaling up investment precisely has always been part of the,

uh,

uh of the agenda

of, uh

uh of an

A uh,

if you look at the trade and development report that I know that you are

fan of you will see how the problem of weak investment has always been and

and and the lack of finance at the interest rate and with the conditions necessary

for a developing

countries to grow

has been always part of

an

that's voice.

So,

uh, let me just, uh

uh, not agree with you in your interpretation of an A

having

a different voice with respect to these issues, investment facilitation has been

in the investment report if I'm not mistaken.

Uh, almost 20 years

because of this, Because of exactly Because of these reasons,

Uh, I

think that the the second question was on Palestine,

and, uh, we did a very important report

at the beginning of this year. That was a quick assessment,

Uh, that had,

uh, a a huge impact on what are the needs for reconstruction?

Uh uh, for

for,

uh, uh,

for a sustainable path in Gaza.

Uh, I

think that the numbers that we present,

uh, there are really striking,

uh, is sober, uh, to look at them.

Uh, we said very clearly

that

even if the war will stop today,

if, uh, we will go to business as usual,

Uh, still, Gaza will need,

uh, 80 years to go back

to the place where they were before the war,

and obviously, that is completely unsustainable.

So,

uh, we have been very strong, you know that We, uh,

produced the report on on Palestine.

And we have to,

um

uh to launch, uh, another report. Uh, this, uh, this year,

Uh, I think that an that has been a very authoritative, uh uh, voice

on this, and I really recommend the report that I think

you correct me. Amalia

was in February,

uh, that we launch in February.

Uh,

precisely on

on the, uh, on the on the things that have to change

for,

uh, uh, AAA possible ro road forward.

But, uh, I, I really advise,

uh, to look at this report because I think that a lot of the

questions that you have raised are answered

in there.

Thank you.

Secretary General, we have one final question, and then we must bring this to an end.

This is from the South China

Morning Post. Anthony Rowley, Please.

Can you hear me?

Yes.

Can you hear me?

Yes, we can.

Um my question relates principally to the

role of the multilateral development banks in

sustainable finance in climate change and so on.

they have been trying to coordinate their efforts increasingly in, um

uh, you know, But, um,

my question really is, um,

the multilateral development banks obviously

have, uh, get very deeply involved in project finance, But

do you think the scope for them to securitize some of their projects

so that these can be

dispersed among a wider group of investments?

One investors, One reason I ask is because, as you know,

there's been a a turning away from, uh, interest in in, um,

ESG investment, for instance, Quite significant, um,

withdrawals of investment in that sector.

because it hasn't really proved to be all that effective. So,

um, the the question really relates to the how do you channel capital?

Um, more effectively into, especially in developing countries.

The climate change issue?

Yes. Thank you.

With respect to ESG, that is precisely what we were saying before that,

investors have,

uh, um

uh

uh, stop to to believe that the ESG is really delivering on sustainability. Yes.

And that there is a lot of green washing in ESGI. I wouldn't throw the,

uh the the the the dirty water with the baby. Yes. I think that the ESG

basic principles are good, you know, Is changing

the behaviour of the business community.

So they are,

uh, uh, aware and

responsible on the social,

environmental and governance issues that we care about.

Uh, the problem is that,

uh, it has there has been some deceiving trends. Yes, in terms of, uh,

uh of greenwashing.

So that's why we said before that on the one hand. This is good.

The investor is becoming more demanding

and wants more evidence of their investment

to be really according to the sustainability.

It is sustainable principles.

But on the other hand, it it the trend has been to lower the

the funds that are for sustainable development. So,

uh, we need to,

uh,

combat greenwashing.

And we made an observatory on greenwashing precisely in the last day. Not this one.

Not the 2023. But I believe 2021

the 2021 investment forum,

uh, a commitment to, you know, to expose greenwashing.

Uh, that's a good thing, but we need

for funds to go to those that are have been responsible and serious about it.

And And maybe that is not happening

with respect to the MD BS.

It's a very it is very important. Uh, what you are saying what the,

uh you know, they they are.

They have been two things happening with

respect to the multilateral development banks.

And,

uh, one

is that the

analysis the

CF analysis that was done in the framework of the G 20

really put,

uh,

a

lot of emphasis on the reform of the multilateral development banks.

Uh, we align pretty much with the what? The the the first half and the second calf.

Uh,

in the G 20 framework say that they should

do they have to use better their balance sheets.

They have to be quicker and more flexible.

They have to,

uh,

to scale up and go to developing countries, and they have to take more risks.

And here is the problem of security

and guarantees. Yes,

uh, because the guarantee part of the MD BS, for example,

is totally separated with from the rest of the bank

from the IBRD part.

And, uh,

so,

uh, the there is a problem with this these schemes of guarantee that are also a

guarantees that go project by project, that is a very

time consuming and

transaction,

uh, and very costly in terms of transaction costs.

So

I, uh, hearing the president of the World Bank.

I understand that they are reorganising

their guarantees scheme

with one. And here let me let me make one,

um, important comment.

The idea is not to take away all the risk from the private sector.

Yes, The private sector has to bear some risk.

The problem is to partner with the private sector to take away the risks that are not,

um, a a

particular of the business that the private sector is going to invest on.

So the risk from the

countryside

more than the risk only from the private sector side.

because we know that if you are, if you are going to have a profit,

you have to have a risk.

Yeah, that's the way it works. So,

uh, we have to be careful on that.

But there is a reorganisation of the guarantee schemes

in the in the World Bank and also in the I

DB and the African Development Bank that is doing much more

in trying to bring down the risk at the country level. So

the cost of capital also can go down

with respect. Uh uh, And also in the World Bank,

uh, the, uh, the president announced

that they have been, uh, they are establishing a hybrid fund

where they were able to raise $11 billion that can become from from

a

bilateral donors

that can become 70 billion if they go to the market

and include private sector with private sector, uh, money

and,

uh, the scheme that they are presenting,

uh doesn't allow for an increase in the interest rates

by bringing in private sector.

So

and they have also a window for middle income countries.

That was also part of the discussion in terms of the

of projects.

So I think

that they are

innovations that are happening in the multilateral development,

uh, system. And with the inter, uh, multilateral development banks,

I feel that there are two things that are still missing.

Uh, one is

dispute

to get to the scale.

Uh, the other is the capitalization of the multilateral development banks.

We still think that they need a

strong capitalization

to be able to have the scale that the developing countries need.

On the other hand,

the,

uh,

the link between the multilateral regional development banks

with the national development banks is not there.

And maybe that is a second thing that should be thought about

There is there are multilateral.

Uh, there are national development banks that could do a lot

in terms of investment opportunities inside the countries.

And that link is not being done,

you know? So the system from global to regional to national

is now from global to regional.

But the national part of the development banks is still not in the agenda.

Something that I think we we need to build more consensus,

uh, around

So thank you. Thank you very much. Thank you, Secretary General. Thank you.

Thank you, Richard. Thank everybody for attending and bearing so long.

We went way over time,

but I guess this is only a reflection of the interest this raises. And

we remain with

the message from the

from the Secretary General. As we've heard,

this is much more than just capital flows. It

is a bigger agenda. And you explained all the interconnected elements

at play. Thank you very much, everybody.

UNCTAD: Press conference - World Investment Report 2024 - 20 June 2024