2024-02-28 17:33:05
His Excellency Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade and Chairman of the Thirteenth Ministerial Conference of the World Trade Organization, launched a new report on the importance of employing foreign direct investments in developing infrastructure and business operations, during the Thirteenth Ministerial Conference of the World Trade Organization in Abu Dhabi.
His Excellency Dr. Thani Al-Zeyoudi stressed that the report constitutes an important step towards addressing the gap in financing infrastructure for trade. He said: “We cannot achieve comprehensive and sustainable development for all without the contribution of the private sector, especially in developing the vital infrastructure for trade in developing countries.”
His Excellency added: “The report provides important practical recommendations to governments regarding the best policies that can be adopted to create projects that support growth and include all countries without exception, expressing his hope that the global investment community will benefit from the report, and that the world will witness more capital demand for this important sector.” ». The report, titled “Investing in the Growth of Global Trade: Using Foreign Direct Investments to Stimulate Trade,” addresses the challenges faced by countries, especially developing and least developed countries, as they seek to build and develop their trade infrastructure, and proposes a framework to help them address those challenges.
The report indicates that many of these challenges are related to the financial aspect, as financing gaps hinder investment in transportation networks, logistics services, warehousing facilities, customs and border control, and information technology systems – all of which limit the private sector’s full participation in global trade. The report cites a research study conducted by the World Economic Forum, which indicates that improving infrastructure quality by 10% might lead to a 1% increase in GDP growth.
On the other hand, reducing trade costs and improving the transparency of business operations will provide more small and medium enterprises, and women-owned or youth-led companies, greater opportunities to enter global markets. While FDI in trade infrastructure can play a vital role, it comes with many challenges and risks that discourage investors, especially in emerging and developing economies.
This includes financial risks, such as corruption, currency fluctuations, political instability, a difficult regulatory environment, and undeveloped technological systems, not to mention environmental barriers. The report provides two main recommendations for governments seeking to enhance their attractiveness for investments. The first is the “Trade Infrastructure Framework,” which focuses on developing a mechanism to mitigate trade infrastructure risks. This includes insurance once morest political risks, enhancing credit, and providing guarantees for trade infrastructure projects, in addition to Technical assistance, capacity building and dispute resolution aspects. This would encourage foreign direct investment by enhancing investor confidence and expanding their scope.
The second recommendation is to provide a platform for development cooperation between international organizations, which would enhance foreign direct investment in trade infrastructure, and this would stimulate international trade organizations and their networks to conduct research, contribute to capacity building, exchange knowledge and data, and provide support. Advocacy and development of trade policy dialogue. The report is in line with the main themes of the Thirteenth Ministerial Conference, the highest decision-making body in the World Trade Organization.
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