UNCTAD INVESTMENT DATABASES - MONITORING TRENDS GLOBALLY IN

UNCLAS GENEVA 000262 SIPDIS STATE FOR IO/EDA AND EB/IFD/OIA USUN for JLAWRENCE E.O. 12958: N/A TAGS: EINV ECON UNCTAD SUBJECT: UNCTAD INVESTMENT DATABASES - MONITORING TRENDS GLOBALLY IN DIRECT FOREIGN INVESTMENT ¶1. Summary: The United Nations Conference on Trade and Development (UNCTAD) includes a 90 person division devoted to research on direct foreign investment and the operations of transnational corporations (TNC). The Division's annual flagship report, the World Investment Report, is one of the most comprehensive sources for comparable country data on investment: flows, policies, and agreements and for comparable data on TNC operations by country and sector. End summary. DATABASES -------------- ¶2. UNCTAD's Investment Division, with 90 staff members, monitors worldwide statistics and trends concerning direct foreign investment and the operations of transnational corporations. Twenty five of the division's staff maintain and update the division's four unique databases which contain comparable country data for the 192 UN member states, plus economies such as Hong Kong, Taiwan, and the Cayman Islands. The first database contains information on foreign investment flows tracking inward and outward investment by industry and country. The second database contains information on TNC operations tracking firm level employment, tax revenues, sales, exports, etc., by country and industry. The third database contains information on foreign investment policies. The final database contains information on investment agreements (there are over 5,000) and investor-state disputes. ¶3. According to James Zhan, Officer in Charge of the Investment Division, the barrier to entry for this type of data collection and analysis is extremely high. UNCTAD has been doing research and analysis focused on direct foreign investment and TNCs for more than thirty years, and has a well established focal point for data collection in every country and economy. ¶4. Data is collected by UNCTAD in accordance with each country's financial reporting practices. UNCTAD staff then process the data according to international standards, to make it comparable across countries and sectors. This effort requires great expertise and familiarity with each country's data. For example, regarding outward investment from China, the Chinese Foreign Exchange Bureau and Chinese Ministry of Commerce collect different data. UNCTAD must consolidate and verify that data and then compare it with the EU and US inflow data to determine if the amounts are accurate. After UNCTAD does this analysis, it provides the statistics back to the GOC, which revises its official data to match the UNCTAD data. Across developing countries the treatment of inter-firm loans, reinvested earnings and equity flows, differs and must be accounted for to make the data comparable. UNCTAD has a team of twenty staff writing the annual World Investment Report. Through their research and analysis, they provide an additional source to confirm or correct the UNCTAD data. WORLD INVESTMENT REPORT -------------- ¶5. UNCTAD has been producing the World Investment Report since 1991. That report, drawing on UNCTAD's databases, analyzes trends in direct foreign investment and operations of TNCs. Unlike the Globalization division in UNCTAD, which has a mandate to be independent and "ahead of the curve," which it often flaunts in its provocative flagship "Trade and Development Report," the Investment Division aims to be mainstream and to define consensus views on investment policy. COOPERATION WITH OECD -------------- ¶6. In June 2007, Heads of State and Government meeting at the G8 Summit in Heiligendamm, Germany, invited UNCTAD and the OECD to jointly engage industrialized countries, emerging economies and developing countries in the development of best practices for creating an institutional environment conducive to increased foreign investment and sustainable development. UNCTAD's investment division regularly works with OECD counterparts on a variety of issues such as enterprise development, entrepreneurship and the global value chain. STORELLA