project progress report

IFD Project , Sixth Quarterly Progress Report, (January-March 2003)

  Introduction
Progress of the Project
Plans for Next Quarter
Problems and Solutions

1.             Introduction

1.1.    This is the sixth Quarterly Progress Report (January-March 2003) 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’.  

1.2.    The project, which is popularly known as ‘Investment for Development’ (IFD), is being implemented by Consumer Unity & 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 PAC. Seven countries, Bangladesh, Brazil, Hungary, India, South Africa, Tanzania and Zambia have been selected for the purpose of the study. 

1.3.    The 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 cooperation, information sharing and joint initiatives across countries on investment issues.

1.4  During the first (September–November 2001) quarter of the project following developments took place:

·        Institutions in the project partner countries were identified as partners in the project. 
·        Operational Strategy Note (OSN) was prepared and sent to all concerned.
·        A Project Advisory Committee (PAC) was set up to guide the design and implementation of the project. 
·        Two core researchers both from the Indian Institute of Management, Ahmedabad were appointed.
·        Terms of Reference (TOR) Report A was prepared and sent to all concerned for their reference.
·        Two consultants were engaged on the basis of their interest and ability and their commitment to the fulfillment of the project goals.
·        Draft project reports (Report A) from four of the seven country partners were received. 

1.5 During the second (December 2001–February 2002) quarter of the project following developments took place: 

·        Draft Report A was received from all partner countries. 
·        Final Report A was received from India.
·        The launch meeting of the project was held at Jaipur, India on 13-14 December 2001. 
·        A meeting of project partners was held on 12 December 2001 at Jaipur. 
·        First PAC meeting was held in Jaipur, India on 15 December 2001 and the second PAC was held on 22 January 2002 at Geneva, Switzerland.
·        The first round of National Reference Group (NRG) meetings were held in India, Hungary, South Africa and Tanzania during the quarter.
·        Terms of Reference (TOR) for Report B was prepared along with the questionnaires for civil society, investor and local businesses and sent to all concerned. 
·        Centre Policy Dialogue, the Bangladesh partner, opted out of the project for their own reasons. Negotiations were under progress with Bangladesh Enterprise Institute in Dhaka.
·        The Zambian researcher Stephen Muyakwa withdrew from the project. No reasons for the withdrawal were cited. 

1.6  During the third (March-May 2002) quarter of the project following developments took place:

·        In Bangladesh, Bangladesh Enterprise Institute (BEI), Dhaka signed the contract with CUTS as IFD project partner in Bangladesh.
·        In Zambia, Gideon Mudenda took over as the independent IFD researcher.
·        Final Reports A were received from Brazil, Hungary, India, South Africa and Zambia.
·        The Terms of Reference (TOR) of Synthesis Report A was prepared and sent to core researchers and PAC members.
·        Draft Synthesis Report was prepared by IFD core researchers and sent to PAC members for their comments.
·        The Terms of Reference (TOR) of Report B was prepared and sent to all country partners.
·        Sanjib Pohit of NCAER, New Delhi, prepared India Report B.
·        The first round of NRG meetings was held in Bangladesh, Brazil and Zambia during the quarter.
·        The second quarterly electronic newsletter for the period January-March 2002 was circulated.
·        IFD E-Forum was launched as an online discussion forum on investment issues.
·        A briefing paper entitled ‘Foreign Direct Investment in India and South Africa: A Comparison of Performance and Policy’ was published by CUTS.
·        Terms of Reference (TOR) of Report C was prepared.  

1.7  During the fourth quarter (June to August 2002), the following developments took place:

·        Laveesh Bhandari of Indicus Analytics, New Delhi took over as core researcher of the IFD project. The change was made in consultation with the PAC.
·        Final reports A were received from each project partner.
·        Draft reports B were received from Bangladesh, India and South Africa.
·        The previous core researchers of the project prepared the draft synthesis report that has been circulated for comments.
·        The second round of NRG meetings was held in Bangladesh, Brazil, India and South Africa.
·        The third issue of IFD newsletter on the theme of Mergers and Acquisitions (M&A) was published.
·        The third quarterly electronic newsletter for the period April-June 2002 was circulated.
·        A briefing paper entitled ‘Regulating Corporate Behaviour’ was published.
·        A monograph entitled ‘Foreign Direct Investment in Developing Countries: What Economists (Don’t) Know and What Policymakers Should (Not) Do!’ was published.
·        Ms. Sanchita Chatterjee represented CUTS for the second NRG meeting in Bangladesh held on 08th August 2002. 

1.8  During the fifth quarter (September-December 2002), the following developments took place:

·        The second National Reference Group meetings were held in Hungary and Tanzania.
·        All the three regional seminars were held in collaboration with UNCTAD at Nairobi, New Delhi and Sao Paulo.
·        An interim meeting was held at New Delhi, which was attended by project partners, PAC members, consultants, core researcher and representatives from DFID and UNCTAD.  
·        The third Project Advisory Committee meeting was held at New Delhi.
·        A Research Seminar on Foreign Direct Investment and Development – the Policy Dimension was held. The aim was to discuss country experiences of national policies and development benefits of foreign direct investment (FDI), common concerns regarding national policies and, researchers’ opinions on bilateral investment treaties (BITs) and international investment agreements (IIAs) based on their research and studies.
·        The fourth issue of IFD newsletter on the theme ‘Investment and Employment’ was published.
·        The fourth and fifth issues of the quarterly electronic newsletter for the period July-September 2002 and October-December 2002 respectively were circulated.
·        A briefing paper entitled ‘Multilateral or Bilateral Investment Negotiations? Where can Developing Countries Make Themselves Heard?’ was published.
·        Rajan Gandhi represented CUTS at the 2002 conference of the OECD Global Forum on International Investment (GFII) at Shanghai, China, on 5-6 December 2002.
·        During the Asia-Pacific regional seminar held at New Delhi, a press conference was organised. Karl Sauvant, Director, Investment, Technology and Enterprise, UNCTAD, Christian Rogg, Investment Climate and Competition team, DFID and Pradeep S. Mehta Secretary General of CUTS participated. The press conference received wide coverage in the press.

2.          Progress in the Sixth Quarter (January- March 2003) 

2.1 Report B 

2.1.1 Report B (Performance and Perceptions Report) studies the relationship between policy, perceptions and performance through selected case studies. It is a reader-friendly and non-technical document and draws on secondary sources and the data from surveys that were conducted by the partners. CUTS will also carry out interviews on companies based outside the selected countries.

 2.1.2 During the quarter, draft report B was received from Zambia.

 2.1.3 Draft reports B have been received from all project countries and are also available on our website www.cuts-international.org/ifd-cr-lm-htm.

2.2 National Reference Group (NRG) Meetings

2.2.1 A major component of the project is to constitute a NRG in each project country for conducting periodic consultative meetings. It includes representatives of the civil society, government and media. For more information, kindly refer to the Operational Strategy Note (OSN). The purpose of constituting the NRG is to provide a sounding board and quality check on the research outputs.

 2.2.2 During the quarter, the second NRG meeting was held at Zambia, Lusaka on 13th February 2003. The meeting discussed the draft report B and the participants actively contributed by their suggestions. The second round of NRG meetings have been held by all the project partners.

 2.2.3 The third round of NRG meetings would target retention of momentum and assess progress made in the national investment debate. The draft report C which is the national advocacy document would be discussed and views invited from the participants.

 2.2.4 Between January and March 2003, the third and final round of NRG meetings started in project countries and have been held in Bangladesh, India, Tanzania and South Africa.

 2.2.5 The third NRG meeting has been fixed in the three remaining countries. They are to be held in Brazil on 14th April, in Zambia on 16th April and in Hungary on 29th April 2003.

2.3 Report C

2.3.1 This report will be a reader-friendly document with clear policy recommendations and action points for stakeholder groups reflecting consultation with but not necessarily endorsed by all stakeholders. It is based primarily on the NRG meetings but also draws on reports A and B.  It is being prepared by each project partner and, on finalisation, would be widely distributed in the respective country.

 2.3.2 Draft reports Cs have been received from Bangladesh, India, Tanzania and South Africa. These are being analysed and commented upon at CUTS.

2.4 Synthesis Reports

2.4.1 Synthesis report A based on all the seven country reports A has been revised by the IFD core researcher Laveesh Bhandari.

 2.4.2 This report has been sent out to the members of the Project Advisory Committee for comments.

 2.4.3 Synthesis report B is expected by the end of April 2003.

 2.4.4 The other two synthesis reports are being prepared by Suman Bery of National Council for Applied Economic Research (NCAER), New Delhi and David Ongolo, a Research Advisor for CUTS Africa Resource Centre, Lusaka, Zambia. Suman Bery is preparing a report on Large Emerging Economies: India, Brazil and South Africa, and David Ongolo a report on Least Developed Countries: Bangladesh, Tanzania and Zambia. The reports are expected by the end of April 2003.

2.5 Outreach

2.5.1 CUTS organised a ‘Partnership Conclave’ on 12-14 March 2003 at New Delhi with the theme ‘Governance and its Relationship with Poverty Reduction.’ This event was attended by over 250 persons from all over the world representing civil society, parliamentarians, business representatives, media, academia, policy makers, lawyers and inter-governmental organisations. Also present at the conclave were dignitaries like Minister for Commerce and Industry and Law and Justice Arun Jaitley, former Prime Minister I.K. Gujral, European Union’s Trade Commissioner Mr. Pascal Lamy, Minister for Food and Cultural Affairs, Sharad Yadav, executive coordinator of UNDP’s Millenium Development Goals Campaign Eveline Herfkens, Karl Marx professor of international studies at Cornell University Kaushik Basu, Commissioner of Earth Charter and former head of Consumers International Ms. Erna Witoelar and former Venezuelan minister Werner Corrales.

 2.5.2 Discussions ranged from international trade systems to investment to sustainable development, consumer rights and responsibilities to water and healthcare. The project partner in India, National Council of Applied Economic Research (NCAER), made use of this opportunity to hold a workshop-cum-NRG on the 13th of March 2003 before an international audience. The major issue that was discussed was how the policies should be designed to get benefits of foreign direct investment as the situation is different in different countries. The whole set of publications under the project was displayed on all the three days and received accolades. The event was widely covered in the media.

 2.5.3 The November 2002 issue of IFD newsletter received a good response. The theme of the newsletter was Investment and Environment. Contributions were received from Hungary, Bangladesh, South Africa and the core researcher.

 2.5.4 The sixth issue of the quarterly electronic newsletter for the period January to March 2003 was circulated.

 2.5.5 A briefing paper entitled ‘FDI in Mining and Environment’ has been published. It explains how mining impacts on the environment and what governments and other institutions can do in this regard. Some interesting illustrations have also been given.

 2.5.6 A monograph entitled ‘ABC of FDI.’ The monograph aims to highlight, in as simple terms as possible given the complexity of the subject, the potential role of FDI in economic growth and development. The study aims to equip the reader with a way of thinking that will help him/her analyse issues Centreed on FDI.

 2.5.7 Sanchita Chatterjee of CUTS, Jaipur attended the third NRG meeting at Dhaka, Bangladesh on 05th January 2003. She made use of the opportunity to discuss the project in detail with the partner.

 2.5.8 Rajeev Mathur of CUTS, Jaipur attended a Think Tank meeting organised by Trade Law Centre for South Africa (TRALAC) on ‘Developments in International Trade Negotiations and their Relevance for Southern Africa’ at Stellenbosch on 17-18 March 2003.  Over 30 Lawyers and professors of Law from South Africa, Amsterdam, Italy and USA, besides representatives from the WTO and UNCTAD attended the meeting. It was a good opportunity to showcase the work under the IFD project. The project and the IFD publications were very well received and the participants evinced a lot of interest in the project.

 2.5.9 Sanjib Pohit, researcher of the project partner in India made a presentation on ‘FDI Policies and Practices: Indian experience’ at a workshop organised by CUTS in Mumbai on 27th January 2003. The workshop was organised under a five year work programme- Grassroots Reachout and Networking on Trade and Economics (GRANITE). The objective is to create long-term capacity of civil society and others to address trade and economic issues and their relationship with development and poverty reduction. The workshop was attended mainly by civil society organisations active in western and southern India.

 2.6 CUTS Advocacy Document

3.       Plans for the Seventh Quarter (April-June 2003)

3.1 National Reference Group (NRG) Meetings

3.1.1 The third round of NRG meetings would target retention of momentum and assess progress made in the national investment debate. The draft report C which is the national advocacy document would be discussed and views invited from the participants.

3.1.2 The third NRG meeting has been fixed in the three remaining countries. They are to be held in Brazil on 14th April, in Zambia on 16th April and in Hungary on 29th April 2003.

3.2 Merging of reports A and B

3.2.1 In consultation with the Project Advisory Committee members, it has been decided that reports A and B of each country would be merged and the report C would be a standalone document. 

3.2.2 It is planned that merging, editing, reviewing and publishing of country reports will be taken up during the quarter and at least 2 or 3 would be in a ready-to-print stage.

3.3 Report C

3.3.1 It is envisaged that all the report C’s would be finalised during the quarter and some of them would be ready for publishing. 

3.4 Report D

3.4.1 All the partners are to prepare a report D that would be a summary of outreach/dissemination activities conducted and will cover an assessment of their impact including reports on regional and international meetings attended by the partners. This report would be completed within 6 weeks of the final meeting.

3.4.2 Terms of Reference for the report D would be finalised in consultation with PAC members. The partners will start work on the report though it will be finalised after the final meeting.

3.5 Synthesis reports

3.5.1 The revised and edited synthesis report A has been sent to the members of the PAC for comments. This report will be finalised during the quarter. 

3.5.2 The core researcher will prepare the first draft of synthesis report B by the end of April 2003. It would be sent out to the members of the PAC for comments and finalisation. 

3.5.3 The other two synthesis reports are being prepared by Dr. Suman Bery of National Council for Applied Economic Research (NCAER), New Delhi and David Ongolo, a Research Advisor for CUTS Africa Resource Centre, Lusaka, Zambia. Suman Bery is preparing a report on Large Emerging Economies: India, Brazil and South Africa, and David Ongolo a report on Least Developed Countries: Bangladesh, Tanzania and Zambia. The reports are expected by the end of April 2003 and would be sent out for comments to the members of the PAC for finalisation.

3.6 Other Events

3.6.1 Regional seminars having been held in Africa, Asia and Latin America, it has been decided in consultation with DFID to hold a roundtable in Istanbul, Turkey in collaboration with OECD entitled ‘FDI in Transition Economies: Challenges, Policies and Good Practices’ on 5-6 May 2003. The main purpose of this regional roundtable is to bring together investment policy makers, practitioners, private sector, trade unions and other civil society partners in transition economies for an interactive discussion. This would be a good exposure of the project in this region as the same was covered during the regional seminars. The discussions will be Centreed on the usefulness of FDI as a tool for economic development, the appropriate policies for attracting investment and towards maximising the benefits of foreign corporate presence. 

3.6.2 To discuss the draft CUTS Advocacy Document, it was decided in the third PAC meeting held at New Delhi on 25th November 2002 to hold a meeting in Geneva in May 2003 and hold the final meeting later this year. A review meeting is being held in Geneva on 9-10 May 2003. 

3.6.3 The fourth PAC meeting and an interim meeting will also be held at Geneva. The PAC will discuss various issues as outlined above and a deadline for remaining activities would be drawn up.

3.7 Publications

In addition to the IFD newsletter ‘Investment for Development’ and the electronic newsletter, it is planned to publish the following during the quarter: 

3.7.1 Monographs:

3.7.1.1 The Home Country Role in Promoting FDI.

3.7.1.2 FDI as a Source for Financing Development. 

3.7.2 Briefing Papers:

3.7.2.1 Public-Private Partnership: How successful?

4.        Problems and Solutions  

4.1 There have been delays on the time schedule agreed at the interim meeting held at New Delhi on 25th November 2003 by partners, the core researcher and researchers for preparing the synthesis of Large Emerging Economies and Least Developed Countries. Deadlines for the quarter have spilled over to April. The IFD team has been pursuing with the concerned with some success. It is proposed to discuss the deadlines at length at the interim meeting to be held on 9-10 May 2003 at Geneva.