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Best-Practice Guide for a Positive Business and Investment Climate

Best-Practice Guide for a Positive Business and Investment Climate
Place and year of publication
Vienna, Austria , 2006
Author
Barry Kolodkin, Olga Moreva, Shawn N. Sullivan, commissioned by The Organization for Security and Co-operation in Europe (OSCE)
No of pages
157 pages
Topic
  • Общие сведения о состоянии МП→Прочее;
  • International practices
Views
14841.
Document ID
4790

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English Version English Version 1 736,62 Kb 10.10.2017

Summary:

I 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

 

Table of contents:

Russian 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

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