project progress report

IFD Project , First Quarterly Progress Report, (September- November, 2001)

I. Introduction

II. Project Management

III. Project Milestones

IV. Progress of the project

V. Plan for the second quarter

  Vicki Harris & Pradeep S. Mehta releasing the poster for IFD- Project at the Launch Meeting held on 13-14th december 2001

I. Introduction

1.1 This is the first report of the project titled “Investment for Development: Awareness and Capacity-Building on Investment Regimes and International Investment Issues in Selected Developing Countries and Transition Economies.” The project, popularly known as Investment for Development (IFD), is being implemented by Consumer Unity and Trust Society (CUTS), Jaipur. The Department for International Development (DFID), UK is supporting the two-year project. UNCTAD is providing support for the project in terms of information resources and advice and is also guiding the project through their representation on the Advisory Committee. Seven countries, Bangladesh, Brazil, Hungary, India, South Africa, Tanzania and Zambia have been selected for the purpose of the study.

1.2 The main objectives of the project are:

·         Assist project countries to design and implement effective investment policies that will contribute to equitable growth, development and poverty reduction;

·         To delineate measures that will help developing countries, in general, and selected countries, in particular, to construct an environment that stimulates domestic and foreign direct investment;

·         Contribute to the assessment of needs and formulation of negotiating strategies for developing countries for discussions on investment issues at the regional and multilateral levels;

·         Raise awareness and stimulate national debate on investment issues;

·         Build capacity in civil society on investment issues;

·         Encourage a participative policy-making process for investment issues;

·         Raise awareness of the impact of competition policy and sectoral regulatory policies on attracting beneficial investment;

·         Encourage “good regulation” or “re-regulation” rather than just deregulation;

·         Dampen competition for investment between countries;

·         Arrest reductions in labour, environment and other standards – the ‘race to the bottom’ – phenomenon, by examining and disseminating information on the relationship between standards and investment, and

·         Encourage co-operation, information sharing and joint initiatives across countries on investment issues.

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II. Project Management

2.1 One of the strengths of CUTS has been its networking capacity and outreach which has been demonstrated in numerous cross-country projects including the 7-Up project (on competition policy) currently being conducted in South Asia and Africa. CUTS has used its network of contacts to identify suitable project partners in each of the countries.

2.2 Within CUTS, a dedicated team is working on the project. Frequent internal meetings will ensure that the whole team is kept informed of all the project developments, while the tasks and responsibilities of each team member is clearly defined. For better project implementation, timetables (general as well as specific), bar charts etc. have been prepared for handy reference for the project partners, core researchers, advisory committee and project staff. A working draft operational strategy note has been prepared and circulated to all concerned.

2.3 Core researchers will bring together the research results from various countries into a cohesive whole, making comparisons, drawing conclusions and drafting policy recommendations applicable to a broad range of developing countries. The core researchers have been selected on the basis of their expertise in the area of economic aspects of investment policy.

2.4 To ensure the success of the project in achieving its stated goals, a project Advisory Committee (AC) has been appointed. The AC will contribute to the design of the project, comment on project outputs as requested, assist CUTS and project partners as necessary in identifying and gaining access to sources of relevant information, participate in project meetings as resource persons and approve major process decisions.

2.5 UNCTAD is providing support in terms of information resources and advice besides collaborating with CUTS in the organisation of the Regional Seminars and in the international conference to be held as the final meeting of the project. UNCTAD is represented on the Advisory Committee.

2.6 DFID, as donors, will also play an active role, working with partner organisations at the national level and contributing in the planning, monitoring and outreach phases of the project. DFID is also represented on the Advisory Committee.

2.7 Private sector input will be actively encouraged and senior businesspeople and business organisations such as Commonwealth Business Council, International Chamber of Commerce and World Economic Forum will be invited to contribute to work in progress throughout the study, including commenting on research outputs and taking part in advocacy and dissemination meetings.

2.8 CUTS will engage two consultants to guide the project throughout the two years. They will contribute actively and continuously to the project by contributing to the design of the project, providing detailed and prompt comments on all the project outputs and stay in constant touch with CUTS staff.

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III. Project Milestones

3.1 Project partners will prepare a report (Report A) covering aspects of the macro-economy; broad policy environment for investment; parameters of current investment policy, other related policies including differences across sectors/industries; policy developments over time and examine participation of different stakeholders including civil society. The report will be a reader friendly document summarising the investment regime of the selected country for distribution to stakeholders and would be ready by February, 2002.

3.2 These reports will be compiled by the core researchers to produce a further document (Investment Policy Comparison) covering areas of similarity and contrast, in particular with respect to policy; the researchers may also draw on examples of good practice from other countries. This document will inform the subsequent analysis and is not intended in itself to assess the effectiveness of policy. This report would be ready by May, 2002.

3.3 Project partners will prepare a report (Report B) covering investor and civil society perceptions of the investment environment in each country and the country’s performance in terms of attracting FDI and securing benefits from FDI for the national economy. Inputs for the report will include secondary sources, official documents, economic data, survey and case studies. The output will be a reader friendly document that will present the results of the research and use these to generate a proposal for improving national investment policy and the investment climate. The report would be ready by July 2002.

3.4 Partners will prepare a report (Report C) covering deliberations of the second NRG meeting and present a clear, prioritised set of policy recommendations by September 2002.

3.5 These reports will be compiled by the core researchers into a further document (Investment Performance Comparison) along with survey data collected by CUTS and other sources of data. This document will use statistical and anecdotal evidence to assess the effectiveness of policies and to generate recommendations on appropriate policies for different macroeconomic and sectoral situations. Two more compilations would be prepared, namely, ‘Large Emerging Markets’ (covering India, South Africa and Brazil) and ‘Least Developed Countries’ (Bangladesh, Tanzania and Zimbabwe). Both are expected to be ready by November 2002.

3.6 CUTS will prepare an Advocacy Document based on research outputs and deliberations at the Regional Meetings which will give policy recommendations at the national and regional levels and action points for the civil society. This document will be revised to reflect the deliberations at the final meeting. This report is expected to be ready by July 2003.

3.8 Project partners will prepare a report (Report D) covering activities and achievements in advocacy by July 2003.

3.7 At the final meeting, a separate session “what next” would be included to identify the areas and to devise mechanisms to follow-up the project outcome.

3.9 CUTS will prepare a final report (Project Process Report) covering the achievements of the project, problems encountered and solutions found and activities to take forward the project’s achievements by August 2003.

3.10 A number of seminars/meetings have been planned during the project:

·         Launch Meeting – 13-14 December 2001.

·         National Reference Group (NRG) Meetings   - January, May and October 2002.

·         Interim Meeting – Autumn 2002.

·         Regional Meetings – Autumn 2002.

·         Final Meeting  - April 2003.

3.11 Publications related to the project will be of two types: printed and electronic. A printed newsletter will be produced in each quarter containing regular updates on the progress of the project and articles related to current investment issues. Other hard-copy publications will consist of briefing papers, monographs and other incidental publications. A quarterly electronic newsletter dedicated to investment issues and progress of the project will also be produced.

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IV. Progress of the project

4.1 The project got under way on 1^st September 2001 and the first quarter ended on 30^th November 2001.

4.2 The following institutions were identified as partners in the project:

·         Bangladesh   : Centre for Policy Dialogue, Dhaka.

·         Brazil            : NEIT, University of Campinas, Campinas.

·         Hungary        : Budapest University of Economics and Public Administration, Budapest.

·         India              : National Council for Applied Economic Research, New Delhi.

·         South Africa : Institute for Global Dialogue, Johannesburg.

·         Tanzania       : Economic and Social Research Foundation, Dar es Salaam.

·         Zambia          : CUTS-Africa Resource Centre, Lusaka.

UNCTAD and the Project Advisory Committee (PAC) have approved the partners.

Contracts between CUTS and the partner organisations have been negotiated and executed in respect of South Africa, Hungary and Zambia by November. In respect of Brazil, IPEA, Rio-de-Janeiro, evinced interest in the project and CUTS was negotiating with them between May 2001 and October 2001. However, IPEA in mid-October, 2001 informed that their contribution would be quite limited and withdrew from the project. CUTS, then, negotiated and tied up with NEIT. The signed contract is expected soon. CUTS is negotiating execution of contracts with CPD, Dhaka and NCAER, New Delhi. Contract from Tanzania is expected shortly.

4.3 A working draft Operational Strategy Note (OSN) has been prepared and sent to all concerned. It is also available on a section of CUTS website, which has been dedicated to the project at www.cuts-international.org/ifd-indx.htm. The document is currently a working draft.

4.4 PAC comprising of international experts including policy-makers, representatives of international organisations, academia and other civil society groups will guide the design and implementation of the project. The PAC members are as follows:

·         Arvind Mayaram, Secretary to the Government of Rajasthan, Department of Industries, India and Vice President, World Association of Investment Promotion Agencies (WAIPA);

·         Diana Tussie, Senior Research Fellow, Latin American Faculty of Social Sciences (FLACSO), Argentina;

·         Farooq Sobhan, President, Bangladesh Enterprise Institute, Bangladesh;

·         John Gara, Commercial Justice Adviser to the Government of Uganda, Uganda;

·         Karl Sauvant, Director, Division on Investment, Technology and Enterprise Development, United Nations Conference for Trade and Development, Switzerland;

·         M. Sornarajah, Professor, Faculty of Law, National University of Singapore, Singapore;

·         Richard Eglin, Director, Trade and Finance Division, World Trade Organisation, Switzerland;

·         Roger Nellist, Head, Enabling Environment Team, Private Sector Policy Department, Department for International Development, UK;

·         Sanjaya Lall, Professor of Development Economics, Oxford University, UK.

4.5 Core Researchers: Rakesh Basant and Sebastian Morris, both faculty members of Indian Institute of Management, Ahmedabad have been appointed core researchers for the project. The core researchers will contribute to research design, prepare the two synthesis reports based on country research reports A and B respectively, contribute articles for the printed and electronic newsletters and participate in the project meetings.

4.6 CUTS has engaged two consultants, Peter Muchlinski and Olivia Jensen on the basis of their interest and ability in the subject matter and their commitment to the fulfilment of the project goals. Dr Peter Muchlinski is chairing Law and International Business, Kent Law School, Eliot College, University of Kent and Canterbury. He is an expert in international legal issues pertaining to multinationals and the WTO. Olivia is a political economist with MAs from Oxford University (Politics, Philosophy and Economics) and the International University of Japan (International Relations). The two consultants are expected to involve actively and continuously in the project by contributing to project design, providing detailed and prompt comments on all the project outputs and keeping in constant touch with CUTS staff.

4.7 By the 30^th of November, CUTS had received draft Report A from four of the seven country partners, namely, Hungary, India, Zambia, and Tanzania. Comments of CUTS thereon were sent to them.

4.8 The following outputs by way of Monograph, Newsletter and publicity was prepared by 30^th November:

·         Quarterly hard-copy Newsletter;

·         Monograph entitled ‘Making Investment Work for Developing Countries’;

·         Brochure entitled ‘Right Investment Helps Development’;

·         Poster entitled ‘Right Investment Helps Development’.

4.9 During the quarter, planning was done for the Partners Meeting, Launch Meeting and Advisory Committee Meeting scheduled for mid-December.

4.10 On 1 September 2001, Pradeep S. Mehta, Bipul Chatterjee and Olivia Jensen represented CUTS in Investment Task Force Meeting of the South Asia Centre for Economic and Political Studies at New Delhi.Their participation in the meeting would go a long way in networking activities of the project. Mehta was invited to join the task force for networking in South Asia.

4.11 Between 24^th to 28^th September Olivia Jensen, representing CUTS, participated in the Global Forum on Investment in Mexico City. The conference was organised by the OECD and the Mexican government. The proceedings were extremely relevant to the IFD project and the conference gave a valuable opportunity to publicise the project. A number of people also showed interest in receiving outputs from the IFD project and participating in events.

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V. Plan for the second quarter

5.1 The following major events are planned for the second quarter of the project:

·         Partners Meeting on 12^th December, 2001 at Jaipur.

·         Launch Meeting on 13^th and 14^th  December, 2001 at Jaipur.

·         Advisory Committee Meeting on 15^th December, 2001.

·         First round of NRG meetings during January 2002.

5.2 The working draft of Operational Strategy Note may require some changes/ additions/clarifications after the said events. The OSN will be revised by CUTS within one month of the meeting and the final version put up on the website. The document will then be ‘set in stone’ for all concerned to download and refer.

5.3 The first round of meetings of the NRG is due to take place in January 2002. All the partners will prepare the NRG list represented by all the key stakeholder groups in the country on the basis of the model sent by CUTS. The partners in consultation with CUTS would set out the agenda.

5.4 During the quarter, the partners will revise their country Report A on the basis of comments sent by CUTS, and the Core Researchers along-with discussions during the Launch Meeting and the first NRG Meeting.

5.5 The Core Researchers will, on the basis of the reports produced for each country, presentations and discussions at the Launch Meeting will start work on a compiled report, the "Investment Policy Comparison.”

5.6 CUTS will publish one electronic newsletter and one hard-copy newsletter during the quarter and will keep the website updated.