Twenty-third UNCTAD-OECD Report on G20 Investment Measures released29 Jun 2020
The 23rd joint UNCTAD-OECD Report on investment measures implemented by G20 members during the period from mid-October 2019 to mid-May 2020 has been released today.
This report has been delivered against the backdrop of the COVID-19 crisis, which has already resulted in the deepest recession since the Great Depression in the 1930s, and which could have even more profound effects. UNCTAD and the OECD forecast that global FDI flows will decrease by as much as 40% in 2020.
According to the report, the pandemic has accelerated the trend towards investment policies designed to safeguard national security interests against threats associated with international investment. Reforms added health-related industries and associated supply chains that are crucial for the pandemic response to the scope of foreign investment screening mechanisms or strengthened control across the board to prevent acquisitions in any sector where companies suffer from temporary financial stress.
Some other policy measures of G20 Members in this area were unrelated to the COVID pandemic and included, for example, the lowering of the participation-thresholds that trigger the foreign investment review mechanism, the broadening of review criteria and the reinforcement of procedural rules. These measures need to be monitored and international dialogue should be strengthened to find the right balance between managing risks while taking advantage of the opportunities that FDI brings to countries, stresses the report.
As the health crisis is brought under control, it is urgent to put in place measures to ensure a swift and sustainable recovery from the economic crisis and lay the foundations for a more prosperous, inclusive future. There is a pressing need for greater investments in health and social protection that ensure the resilience of societies in the face of risks such as pandemics while bolstering the protection of the most vulnerable against such shocks. FDI and trade can play important roles in achieving recovery and building more resilient, sustainable economies – provided governments embrace the potential of international investment rather than turning inwards.
International cooperation among G20 members will remain essential for successfully overcoming the crisis and for informing the design of policies that allow countries to navigate the uncertainties brought about by the pandemic. The principles of openness, transparency, fairness and sustainability can guide governments as they work towards these goals.