Presentation by A. Miroux and K. Andrews Johnson
The attractiveness of a country to foreign investors and the feasibility of individual investment projects is closely linked to a country’s policy environment. However, this dependence does not only refer to the overarching legal framework or the general policy prescriptions. Equally, if not more important is the practical administrative implementation of these policies.

Foreign Direct Investment (FDI) is a telling indicator of global economic health and stability. In 2000, global FDI inflows increased by 18 percent over 1999 levels to $1.3 trillion. The current economic downturn, however, is reversing this trend. For the first time in over a decade, FDI flows are contracting. The World Investment Report 2001 predicts that FDI outflows will fall 40 percent in 2001, below the 1999 level to around $760 billion. In order to better understand the factors influencing FDI flows, a study was conducted in the summer of 2001. A survey questionnaire was distributed by mail to a sectoral cross-section of the world’s largest transnational businesses. At that time, 191 companies of these divulged their near-term investment plans. It is on the responses of this group of companies that this report is based.

In the 1990s, foreign direct investment began to swamp and Poverty Reduction all other cross-border capital flows into developing countries. Does foreign direct investment support sound development? In particular does it contribute to poverty reduction?

This study is the revised edition of the same title "Marketing a Country: Promotion as a Tool for Attracting Foreign Investment" (Report No. 8649), which was published ten years ago. The study is about the promotional techniques and structures that countries employ in their competition to attract foreign direct investment. The basic premises of the book have stood the test of a decade. However, investment promotion is a constantly evolving field. The original monograph described three basic investment promotion techniques: image building, investment generation, and investor services. A fourth technique, policy advocacy, is also recommended to add to the mandate of investment promotion agenda. Additionally, promotional activities seem to be growing outside the bounds of the narrowly defined investment-promotion agency. A few of the agencies are becoming international, directly or through alliances.

Consequently, FIAS has been advising many governments in the developing world on how best to establish a policy framework attractive to foreign investors. FIAS typically combines its review of the institutional, legal and regulatory environment with a combination of investor roundtables and workshops for senior government to ensure that all major concerns of both the government and the private sector are taken into account. Although each country has unique policy problems, FIAS has encountered common features in key areas that pose stumbling blocks for private infrastructure investments. This study synthesizes this experience and derives lessons for facilitating and encouraging foreign direct investment in infrastructure.