home  › Business and economy

Foreign direct investment is needed for job creation, says WAIPA

by Italy24 staff

Foreign direct investment, better known as FDI, is bound to become of one of the most important drivers to boost future productivity, global growth and also Italy's growth.

The multiple crises which started in 2007 have had structural negative effects on developed and developing nations, as growth is below potential and deleveraging in the banking sector is making financing harder. FDI volumes are not back to pre-crisis levels, but they should rise this year compared to 2014.

For all these reasons there is an urgent need for higher public and private investments and partnerships (PPP) especially in infrastructure and education, there is also need for an increasingly integrated world, harmonized rules, enhanced quality of human capital.

This is the main message conveyed yesterday at the WAIPA (World Association of Investment Promotion Agencies) conference 2015 in Milan, organized by the Turkish presidency and ICE-Italian Trade Agency (ITA) at Palazzo Lombardia.

Italy was voted - almost unanimously - yesterday to take the position of the vice-presidency in WAIPA.

Italy hosted WAIPA's World Investment Conference 2015 and took the occasion to stress its mounting commitment to FDI and to a closer dialogue amongst the Investment Promotion agencies (IPAs).

“We have to grow together,” was the slogan of the conference. Arda Ermut, president of WAIPA, underlined that “FDI can change the world for the better. ”

However, global FDI dropped by 8% in 2014 (after rising in 2013) to an estimated $1.26 trillion, one third below its peak in 2007. FDI flows received by developing and transition economies increased from 19% in 2000 to nearly 60% in 2014 but these countries alone will face an annual investment gap of $ 2.5 trillion.

Li Yong, director general of UNIDO (United Nations Industrial Development Organization) said that FDI must be increased in infrastructure finance, especially in transport and energy.

“For us to attract investments is a top priority, especially for SMEs which will meet international demand for growth,” said the Deputy Minister for Economic Development, Carlo Calenda at the conference. “The next round of trade policy will be more and more linked to investments, which are at the center of all trade agreements.”

Riccardo Monti, ITA president, pointed out that “IPAs must work more together, as the world is getting faster and more complicated” and predicted that trade and investment agencies are going to be key players in the future, to enhance growth, productivity and job creation.

Nicola Ciniero, president and CEO of IBM Italia, announced at the conference the opening of a new data center in Italy, with a “huge investment” of €15 million, stressing that it took just six months to make it happen, a record speed for Italy.

“We need to be fast,” he said speaking about Italy but addressing the international audience. Job creation will be one of the primary challenges for IPAs as the world is getting into a jobless growth.