Last year saw an increased push for liberalisation and promotion of crossborder investments, according to the Investment Policy Monitor published by the UN Conference on Trade and Development (Unctad) at the end of 2014. A total of 33 countries established 45 investment regulations between March and December 2014, 82% of which were in regards to liberalisation and promotion in fields as various as air transportation, national defence, railway infrastructure, pharmaceuticals, power plants and telecommunication.
Countries were particularly active in adopting measures relating to the entry and establishment of foreign investors. According to the monitor, 21 countries, including Argentina, Australia, India and the US introduced such measures in 2014. Last year also saw a number of countries, including China, Saudi Arabia and the UAE, introducing new measures on the general business climate.
While these measures were implemented by both developed and developing economies, the introduction of rules on the promotion and facilitation of foreign investments was a domain of emerging markets in 2014. Unctad’s report shows that seven economies introduced such measures, including Bolivia, Ethiopia, China and South Korea.
The report also notes that an increasing number of countries aim for sustainable development when it comes to establishing domestic investment policies. Yet, the share of such policies constitutes only 8% of all investment-oriented legislative changes.
While many newly introduced measures aim to ease the investment environment, Unctad’s report states that there are also signs of a more critical approach towards foreign investors. In particular, multinational firms’ tax evasion practices were highlighted, as were the market power of big multinationals, highly politicised antitrust policies, and mergers and acquisitions involving foreign companies being blocked or approved under tough conditions. The report also cites growth of industrial policies as a way of strengthening domestic companies.