Investment Climate

The World Bank

The Investment Climate team provides evidence-based support to help countries foster an “investment-grade” business environment, maximize the benefits of private investment, and secure a share in global value chains.

Context

New global shocks could threaten investment in unprecedented ways with repercussions for economic growth and development. Global foreign direct investment flows plummeted by 40% immediately following the COVID-19 shock, yet the recovery has been much slower for developing countries. The pulse survey of multinational corporations (MNCs) conducted during April-June 2022 reveals that nearly 30% of investors plan to reduce their investments in the host developing country in the coming year. Slow recovery and declines in North-South flows of greenfield FDI foreshadow weaker investor confidence and shifting global production patterns. In the post-pandemic world, several new challenges to investment are emerging, such as

The current global economic landscape demands the development of coordinated, non-fiscally taxing solutions to strengthen countries’ investment climate and develop resilient for future shocks. For the past three decades, the private sector has been at the forefront of leading economic transformation around the world. Integration with global markets and enhanced investment competitiveness has contributed to the unprecedented growth of many economies.

Given the current context, governments are turning to the World Bank for advice on policies to enable and link foreign and domestic private sector with the dynamism generated by cross-border trade and investment patterns, and support resilience and recovery of their economies in a resilient and inclusive way.

The Global Investment climate supports client countries in creating an enabling business environment for all firms, attracting new sources of investment and maximizing spillovers from foreign direct investment, thereby contributing to healthy firm dynamics, economic transformation and job creation.

Strategy

By leveraging a comprehensive approach that addresses the legal, regulatory, administrative and institutional barriers affecting all phases of the business and investment lifecycle, the World Bank helps countries establish a competitive investment climate that is favorable for stimulating investment for business-led growth. Capable of mobilizing a wide range of World Bank Group instruments—including advisory services and analytics (ASAs) and diverse lending products (DPFs, P4Rs and IPFs)—to help developing countries, our experts on business environment and investment policy and promotion deliver integrated IC solutions founded on three pillars:

Given that the successful design and implementation of investment climate reforms requires the coordinated effort of many different line ministries and agencies, our teams support governments to design investment climate reform programs in the context of a broader competitiveness agenda; determine priority areas for reform in the short, medium and long terms; set clear targets with measurable results; and strengthen the institutional capacity of public-private dialogue mechanisms and inter-ministerial reform committees.

Results