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Best-Practice Guide for a Positive Business and Investment Climate | |
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PublishedVienna, Austria, 2006
AuthorsBarry Kolodkin, Olga Moreva, Shawn N. Sullivan, commissioned by The Organization for Security and Co-operation in Europe (OSCE)
AnnotationI am pleased to present the OSCE’s Best-Practice Guide for a Positive Business and Investment Climate. The Guide has been developed in response to a request made by the OSCE participating States that the Organization should facilitate higher levels of information availability and experience-sharing on best practices in the areas of investment and small and medium-size enterprise (SME) development.In full accord with its comprehensive concept of security, the OSCE sees the promotion of a positive investment climate as an important priority for its work in the economic and environmental dimension. Foreign direct investment (FDI) is the largest source of external . nancing in many OSCE countries, and is particularly important for the OSCE’s developing and transition economies. FDI has the potential to generate employment, raise productivity, and transfer skills and technology; as it is good for exports, it also contributes to long-term economic development. Sound investment policies – consciously designed to attract FDI, stimulate domestic investment, and develop the SME sector – constitute a solid foundation for sustained economic growth. The Guide presents the key concepts and best practices by focusing on countries in the OSCE area that have in recent years made significant strides forward in improving their business climates and advancing their economic development. Their experiences and best practices will be invaluable to other countries intent on following their example. The Guide discusses the critical conditions for a positive and dynamic business and investment climate: a sound and stable political, economic, legal and regulatory environment, supported by good governance, transparency, predictability, and economic openness. It also emphasizes the need for a basic policy framework that addresses issues such as competition, privatization, taxation, customs, labour, education, financial systems and physical infrastructure. A separate chapter is devoted to “law and regulation”, as this field is critical to the creation of an environment conducive to increased investment and business activity: among the issues discussed are property and contractual rights, protection against expropriation, corporate governance, repatriation of profits, and bankruptcy legislation. The Guide also deals with SME-relevant policy areas such as access to finance, markets, technology, expertise, and business support services. Finally, the Guide draws attention to the importance of sustainable development, emphasizing that adequate consideration has to be paid to social and environmental matters if the policies pursued are to result in balanced long-term development. It is my sincere hope that the Guide will be a useful tool for policymakers and practitioners seeking to develop new policies, strategies and structures aimed at improving the investment and business climate in their respective countries. I also hope that it will inspire further dialogue and co-operation, not only among our participating States but also between national authorities and other key stakeholders, on how to advance economic development by building up positive investment and business climates. Bernard Snoy Co-ordinator of OSCE Economic and Environmental Activities
IndexRussian Version Report Foreword Introduction Chapter 1 The Importance of a Favourable Business and Investment Climate What is a business and investment climate? The importance of a favourable business and investment climate Negative consequences of an unfavourable business climate The importance of foreign direct investment (FDI) Ireland’s economic miracle Conclusions and Recommendations Chapter 2 A Business-Friendly Political and Legal Environment is Critical to a Strong Investment Climate The importance of the political environment and key conditions Security Protection and guarantee of investor rights Legislative stability Transparency Corruption Good governance Conclusions and Recommendations Chapter 3 The Importance for the Business and Investment Climate of Policies that Support Macroeconomic Stability and Economic Growth The importance of a strong and stable macroeconomic environment Macroeconomic indicators used by corporate investors Closed versus open economies The importance of diversification to economies built on extractive industries Creating a strong macroeconomic environment Conclusions and Recommendations Chapter 4 Government Actions and Policies that Improve the Business Climate Improving the business climate Tax policy Employment policy and labour market flexibility Labour market reforms in OSCE countries Investment in infrastructure Investment in human capital International and regional integration Privatization of State-owned enterprises Recommendations Chapter 5 The Importance of Law and Regulation to Economic Development Private property rights and freedoms Protection against uncompensated expropriation Regulation and erosion of property rights and business opportunities Immovable property Contractual rights and freedoms Forms of doing business Corporate governance Personal property and secured transactions Bankruptcy legislation Capital markets Banking law and policy Repatriation of profits and capital Foreign exchange controls Competition law and policy Intellectual property and electronic commerce legislation Government procurement Enforcement of the law and protection of private rights Bilateral investment treaties Conclusions and Recommendations Chapter 6 Investment Promotion Investment promotion Investment promotion agencies (IPAs) Investment incentives Fiscal incentives Disadvantaged zones Free zones/Special economic zones Industrial parks Investment guarantees and political risk insurance Conclusions and Recommendations Chapter 7 Small and Medium-Size Enterprises (SMEs): Development and Promotion The importance of SME development Economic impact of SMEs The diminished effect of SMEs due to the informal economy Fulfilling SME potential through improved business climates Creating a supportive SME policy framework Reducing the burden on SMEs Measures for reducing SME-specific constraints Creating a State-supported SME development programme Tax benefits for SMEs Developing entrepreneurial culture and human capital for SMEs Barriers to finance for SMEs Alternative financing mechanism Access to enterprise support services Access to markets and cluster development Conclusions and Recommendations Chapter 8 Sustaining and Strengthening a Better Business and Investment Climate Sustainable development Environmental protection Social development Corporate social responsibility (CSR) CSR and the public sector Codes of conduct for industry CSR: the business case Conclusions and Recommendations |
Doc ID4790
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