THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency “Global Investment Promotion Benchmarking (GIPB): How to take advantage to attract more FDI” 16 June 2011 Investment Climate Dept. (CIC) World Bank Group

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency GIPB is a tool designed to improve country efforts to effectively attract FDI Overview: Surveys the ability of investment promotion intermediaries (IPIs) to provide information to foreign companies for their investment projects Primary audience is IPI agency managers and policy makers 2009 report includes assessment of 189 countries Objective: a) Improve public accountability and governance by providing governments with a measure of the performance of their mandated agency  Achieved through tailored and confidential performance country reports b) Encourage improvements in IPIs' facilitation services to support attraction of more FDI  As a result of helping IPIs to improve their level of facilitation performance c ) Enable CIC to assess the effect of its advisory work with clients in the area of investment facilitation  The project will achieve improvements in at least 20 CIC clients using GIPB09 as baseline 2

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency 3 GIPB focuses on long-listing stage of investors site selection process… The Site Selection Methodology

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency …measuring the quality of IPI website and IPI project inquiry handling 4 Simulating investor site selection methodology, a global site location consultant assesses:  IPI Websites (50%) – quality, relevance and usefulness for a foreign investor of country and sector information provided.  Project Inquiry handling (50%) – a mystery shopper approach tests IPIs’ interaction with investors, information provision and how the IPI attempts to influence the investors’ decision. In GIPB09 two investment cases - a manufacturing and software development project – were tested A 2008 survey of 3,600 US large companies ($25m+) conducted by DCI Consulting reveals that: 64% of respondents will use the IPI website in their next investment location search. 92% of respondents will contact the IPI during the investment decision process Site location consultants are more likely to use the IPI services for information in the screening process. A 2008 survey of 3,600 US large companies ($25m+) conducted by DCI Consulting reveals that: 64% of respondents will use the IPI website in their next investment location search. 92% of respondents will contact the IPI during the investment decision process Site location consultants are more likely to use the IPI services for information in the screening process.

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency GIPB 09 found many IPIs are missing out on investment opportunities… Investors seeking business information in non-OECD countries and contacting IPIs for assistance may become frustrated with government agencies Most developing country IPIs do not fully understand private investor information needs, or don’t prioritize investor information over other more glamorous investment promotion activities (image building, proactive missions, events, etc) Developing countries can attract more FDI if they focus on this high impact and low cost activity: Bridging the information gap potential investors face when researching their country/sector, and putting their countries in the investors’ radar. 5 Over 70% of countries may miss out on investment opportunities knocking on their doors because they are unable to provide the basic business information that companies need during the site selection process.

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency …and Government agencies fail to deliver the business information that investors need…online and offline Good news… Almost every country has an agency mandated to promote FDI and facilitate investors entry Good news… Investors can find virtually every IPI online and contact them Not so Good News… IPIs do not consider important, or lack the skills to prepare the kind of information that companies need during the site selection process! 6 Regional performance in each GIPB assessment category (Scores for each category calculated over 100%)

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency GIPB is a useful tool to boost FDI competitiveness: Impact Case Study – Papua New Guinea (PNG) PNG received the GIPB09 report and learned that two potential investors had contacted their agency with questions about their project, and the IPI had failed to respond to both of them. PNG would have missed both projects if they had been real. GIPB served as an external assessment of PNG’s IPI effectiveness. PNG followed the detailed recommendations from the confidential GIPB report to outline a work plan that included: a)a vision of performance for staff, b)a client-tracking system, and c)a M&E plan to assess conversions of inquiries into leads. 7

THE WORLD BANK World Bank Group Multilateral Investment Guarantee Agency Stay Tuned GIPB12 Coming up! Please Visit: Or Contact: Celia Ortega, 8