GOF ANNOUNCES ADVANCES IN ATTRACTING INVESTMENT

UNCLAS PARIS 002656

SIPDIS

PASS FEDERAL RESERVE
PASS CEA
STATE FOR E, EB, EUR AND DRL/IL
TREASURY FOR DO/IM SOBEL, RHARLOW, LHULL
TREASURY ALSO FOR DO/IMB AND DO/E WDINKELACKER
LABOR FOR ILAB - WBRUMFIELD
USDOC FOR 4212/MAC/EUR/OEURA

E.O. 12958: N/A
TAGS: EFIN ECON PGOV FR
SUBJECT: GOF ANNOUNCES ADVANCES IN ATTRACTING INVESTMENT



1. SUMMARY: Prime Minister Raffarin on April 18 hosted his
second annual conference on attracting foreign investment,
where he outlined increased spending on research and
development, presented a new advertising campaign, and
announced positive 2004 results. According to the GOF,
France moved up to second place in 2004 in attracting
foreign investment among major industrialized countries on a
three-year adjusted basis, and thereby created 33 thousand
new jobs. END SUMMARY.


2. On April 18, Prime Minster Jean-Pierre Raffarin hosted a
conference on the attractiveness of France as a destination
for foreign direct investment (FDI). This is the second
such conference; the last was held on April 26, 2004. The
conference participants included around two dozen CEOs, both
foreign and French, invited by the GOF to form the
"Strategic Council for the Attractiveness of France."


3. The GOF used to occasion to highlight the measures it
has taken or hopes to take to attract FDI, mostly centered
on fiscal measures to promote research and development.


4. The GOF focus on R&D is reflected in its new advertising
campaign, launched by the French Agency for International
Investment (Agence Francaise pour les Investissements
Internationaux, AFII) with the slogan: "The new France,
where the smart money goes."


5. The GOF also used the conference to announce preliminary
data for investments in 2004, which show the role of FDI in
employment in France. According to that data, 33 thousand
jobs were created or maintained in 2004 due to FDI inflows,
which is an increase of eight percent for the year, and
thirty percent over a two year period. Press reports
indicate the GOF also distributed data showing that France
was second only to the United States in attracting inward
FDI flows in 2004 compared with other major industrial
countries, with China falling to third place. To smooth out
the impact of non-recurring events, the rankings are drawn
up using average FDI inflows over a three-year period for
ten major industrialized countries.


6. However, Econoff spoke with Cynthia Odsi of AFII, who
acknowledged that AFII has not yet finalized its data (the
latest official figures are from 2002, which show China
attracted 56 billion euros, while France had inflows of 54.7
billion euros). AFII should release its study to the public
on June 30th at the World Investment Conference at La Baule,
France. AFII hopes other European countries will adopt the
study as a benchmark for attracting investment.
WOLFF