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Zambia, Tanzania and Bangladesh: More Needs to be Done. FDI Policies and Regulation: How to Foster Economic Development 30 January 2004, Geneva, Switzerland Sanchita Chatterjee CUTS-CCIER. Macro Characteristics. FDI Inflows in US$ mn, 2000-02 Source: UNCTAD WIR 2003.

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Zambia tanzania and bangladesh more needs to be done

Zambia, Tanzania and Bangladesh: More Needs to be Done

FDI Policies and Regulation: How to Foster Economic Development

30 January 2004, Geneva, Switzerland

Sanchita Chatterjee

CUTS-CCIER


Macro characteristics

Macro Characteristics


Fdi inflows in us mn 2000 02 source unctad wir 2003

FDI Inflows in US$ mn, 2000-02Source: UNCTAD WIR 2003


Fdi inflows as a percentage of gross fixed capital formation 2000 02 source unctad wir 2003

FDI Inflows as a Percentage of Gross Fixed Capital Formation, 2000-02Source: UNCTAD WIR 2003


Sectoral distribution of fdi

Sectoral Distribution of FDI

  • No official comparable data for the three LDCsFor Tanzania the estimates have been made using number of approvals by Tanzania Investment Centre. Between 1990 and 2000 manufacturing highest FDI followed by tourism, agriculture and natural resources sector


Sectoral distribution of fdi1

Sectoral Distribution of FDI

  • For Bangladesh a World Bank study said that outside the Export Processing Zone gas and power highest FDI. Within EPZ ready made garments followed by textile, leather goods and shoes, and electronics. According to Bangladesh Board of Investment, the services sector followed by chemical industry received the highest registered FDI.


Sectoral distribution of fdi2

Sectoral Distribution of FDI

  • For Zambia, Zambia Investment Centre holds data only on pledged investment but not actual investment. As per this data, manufacturing received the highest FDI, followed by services, trading, agriculture, mining and tourism.


An overview of investment policies

Country

Bangladesh

Investment Policy

Non-discrimination

Protection from expropriation

Repatriation

Role for the private sector

Registration required

Other clearances (e.g. environment)

Incentives

BITs

Investment facilitation: BoI, BEPZA, Bangladesh Small and Cottage Industries Corporation

An Overview of Investment Policies


An overview of investment policies1

Country

Tanzania

Investment Policy

Minimum period for govt agencies to process applications for land

Certificates of incentives granted by TIC

Separate statute for mining

Incentives

Separate Act for Zanzibar

BITs and DTTs

Investment facilitation: TIC, ZIPA, Zanzibar Free Economic Zones Authority, Zanzibar Free Ports Authority

An Overview of Investment Policies


An overview of investment policies2

Country

Zambia

Investment Policy

No distinction between foreign and local investors

No business ventures only for government

Not mandatory to register investment

No clearly defined investment policy

Incentives

Not many BITs and DTTs

Investment facilitation: ZIC, ZEPZA, Office for Promoting Private Power Investment

An Overview of Investment Policies


Sectoral case studies

Sectoral Case Studies

  • Some sectors studied are important for overall employment, outputs and export earnings e.g. textiles in Bang, mining in Tanz and Zamb. Some sectors reflect how policies are not in line with economic considerations e.g. telecom and cement in Bangladesh. Common sectors: telecom for Bangladesh and Tanzania; mining for Tanzania and Zambia


Telecom

Telecom

  • Latest technology has brought in changes; for consumers this brought about better quality of services and greater accessibility

  • Tanzanian Govt undertook liberalisation in 1993; established TPTC; FDI in the sector high; teledensity improved from 0.3 lines per thousand in 1991 to 0.8 per thousand in 2002;

  • In Bangladesh in early 1990s, private sector operators were allowed to provide rural telephone services but very low inter connection regime


Mining

Mining

  • It has been an important sector for Africa; both Tanzania and Bangladesh gave incentives though they were not effective.

  • In Tanzania the govt undertook policy and institutional changes between 1995 and 2001; local/joint ventures and FDI have gradually increased in mining and exploration

  • In Zambia privatisation of mines were undertaken including that of Konkola Copper Mines; foreign penetration in the mining sector is quite high


Civil society perceptions

Civil Society Perceptions

  • Civil society: NGOs, trade unions, business associations, academia, media

  • The number of respondents

  • Bangladesh – 50

  • Tanzania – 50

  • Zambia – 43


Results of the survey

Results of the survey

  • Respondents aware of their country experiences

  • Greater agreement on the positive aspects than the negative aspects

  • Countries with more positive experiences with FDI show higher agreement levels

  • Respondents believe government policies and actions are required to maximize benefit from FDI

  • Employment, export and technology requirement receive the most support from the respondents


Some recommendations

Some Recommendations

  • Improvement in investment climate: improvement of governance, training of government officials, simplification of laws, change in the mindset of officials, rethinking on incentives

  • Strong but limited government interventions required: careful regulation of some sectors, improvement of information on trade and investment

  • Privatisation and further reforms be strengthened


Some recommendations1

Some Recommendations

  • Legal and judicial systems, development of human resources and, physical and financial infrastructure,

  • Ensure macroeconomic stability and reduce poverty

  • Regional and sub-regional cooperation: e.g SAARC, SADC, East African Community


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