A Practical Approach to IPA Policy Advocacy

1. A Practical Approach toIPA Policy Advocacy Carlos GriffinInternational Investment FacilitationUNCTAD

2. Definition: Policy Advocacy by IPAs • IPA efforts to effect changes in regulations, laws and government policies pertaining to: • Investment • Trade • Immigration • Taxes • Labour • Real estate • Intellectual property rights • or any area which affects investment promotion and facilitation or other IPA goals, such as sustainable development.

3. Policy Areas by Importance to IPAs Source: UNCTAD Survey of 55 IPAs, 2006-2007

4. The Goals • Shape the investment climate to attract greater inflows of FDI • Promote policies that will allow greater benefits to be extracted from that FDI • Build national competitiveness in a global economy.

5. IPA Limitations • IPAs are policy advocates not policy-makers • Some stakeholders may oppose change • Understanding of the private sector and the investment climate may be poor • May not have a full picture of national goals • Resource limitations and pressure to show short-term results in terms of FDI inflows may push policy advocacy aside

6. IPA Advantages • Best position within government to understand overall investor decision-making • Many influential natural allies: foreign business, domestic business and (potentially) domestic labour • Much of the policy advocacy groundwork is already done in other IPA activities

7. A 4-Step Approach

8. I. Problem ID/Agenda-Setting • Decide what counts as a problem, based on IPA goals and client consultations • Study the context of the problem • Prioritize problems based on impact and likelihood of change • Articulate actionable agenda items

9. Articulate Actionable Agenda Items • Be precise • Write the fundamental problem, not a symptom • Bad example: Some investors don't want to invest in our agriculture sector. • Good example: Inadequate storage and logistics services near the airport make certain agricultural exports more costly and risky. • Do not mix possible solutions with the problem definition • Example: A lack of incentives keeps investors from investing in storage and logistics services. • Quantify the problem when possible • Example: 10% fewer bananas and cut flowers make it to market than if adequate storage and logistics services were available near the airport

10. Tools for Information Collection • Regular visits to investors • Benchmarking and evaluations of the business environment • Investor surveys • Investor aftercare services, including "complaint windows" • Public-private forums • Regular cross-agency working groups on specific issues (e.g. streamlining procedures, immigration) • Impact assessments on job creation and other spillovers • Relationships with foreign investor associations • Monitoring of policy changes and their effects • E-regulations programme

11. II. Develop the Best Policy Remedy • Formulate several alternative policy fixes • Example Problem: • Underdeveloped agroprocessing sector • Example Policy Remedies: • Tax incentives • Looser restrictions on foreign ownership, employment • Industrial parks w/ committed, reliable utilities and communications infrastructure • Choose based on explicit evaluative criteria, e.g. likelihood/amount of FDI, anticipated spillovers, implementation/advocacy costs, negative side effects, likelihood of change

12. III. Advocate the Policy • Prepare • Research and specific policy proposals (Steps I and II) • Communications material (newsletters, reports, press releases) • Evidentiary support (case studies, market analysis, impact reports) • Persuade decision-makers, opponents, the public • Publicise • to frame the debate • to build consensus indirectly • to educate • Mobilise • Beneficiaries, • “Champions” • Partners • Supporters • Build consensus through…

13. Tools for Consensus-Building • Regular, individual meetings with high-level decision-makers • Regular cross-agency forums and taskforces on specific issues • Impact reports and other predictions of job creation, projected inflows, etc. • Public-private forums, including foreign business advisory councils • Developing "champions" of policy reform in government and the private sector • Mobilising supporters and partners to repeatedly convey a consistent message from multiple directions • Media articles • Periodic reports and briefs to government and investors on the investment climate • Support from legal consultants, including through IOs

14. IV. Monitor and Evaluate • Is the policy change effected having the impact it was meant to have? • Have there been any unintended consequences of the policy which detract from its overall effectiveness? • Could the policy be improved further? • Were the costs—financial, political, etc.—expended on the change worth the resulting benefits? • What lessons were learned in effecting the change that could be used to improve the effectiveness of future policy advocacy efforts?

15. Mandates, Budgets, Organization • Mandated for PA: • All private or joint public-private IPAs • 86% of governmental or autonomous public IPAs • Budgets: • Average: 8.9% • Developed Countries: 5.5% • Developing Countries: 9.9% • Organization: No Universal Template!

16. Advocacy Teams: An Example

17. Botswana's Case: StreamliningVisa Procedures • Long delays in processing of work/ residence permits identified through facilitation and aftercare • IPA policy recommendations to Cabinet • IPA temporarily given fast-track authority to issue visas to investors • Wait reduced from 18 months to 6 weeks

18. Mauritius' Case: Overcoming Resistance from Domestic Business • IPA recognised VA export potential of seafood industry • Proposed framework for FDI attraction to Ministry • Resistance raised from small local operators and fishermen • Workshops for domestic stakeholders to learn differences between artisanal and industrial fishing industries • Committee set up to review problems w/ the reforms and propose remedies on a monthly basis • Final result: fewer constraints, less bureaucracy, and an industry growing w/ the stimulus of FDI

19. 7 Tips for More EffectivePolicy Advocacy • Have a PA master plan • Build capacity for research and communication–internally and through partners • Advocate proactively and assertively • Expand the IPA's policy horizon • Avoid "self-serving" policy proposals • Constantly educate stakeholders • Mobilise and institutionalise support

20. Carlos.Griffin@unctad.org+41 22 917 58 85 Thank you.