Russell Curtis from Durban Investment Promotion - UN World Investment Forum Sustainable Development
2016-10-18
Russell Curtis from Durban Investment Promotion was an invited panel speaker in a discussion about "Promoting Investment in Urban Development" at the United Nations Conference on Trade and Development (UNCTAD) World Investment Forum, Nairobi, 17 - 22 July 2016.
The event highlighted, amongst other topics, the importance of the still relatively new global Sustainable Development Goals (SDGs), and the key role of investment promotion and facilitation in working towards
achieving these goals (see pictogram below).
A target of the conference was to gather knowledge, market intelligence, and alternative means to achieve foreign direct investment (FDI) within the realms of the SDGs. This being contextualised within
a background that traditional investment promotion strategies are not always enough for the ever changing investment world environment, and new alternative strategies must be developed. The panel considered two key questions:
What challenges do cities face in achieving sustainable development, and what role is there for private investment, including FDI , in addressing these challenges?
Private financing could fill the funding gap for many urban SDGrelated projects, including green infrastructure. At the same time, investors differ in their needs and capacity and vary between sectors, so multiple forms of private capital will be necessary to support sustainable urban development.
Sustainable cities are forged through successful partnerships between public, private, and civil society stakeholders, specifically municipalities, environmentally active communities, and the private sector. This demands adapted city management.
How can cities effectively attract investment for sustainable development, including in SDG sectors?
For private finance to be a solution, investment products, public policies, and civic support need to be created around efforts that combine an interest in sustainability, the importance of cities, and the multiple potential sources of capital. There are at least three conditions of private finance would have to be met: a market for urban SDG investment projects, good return on investment, and limited risk.
Curtis proposed the following during the discussions:
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A metro investment promotion agency or investment promotion team structure is required to operate at the highest levels in a City.
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Top leadership support for investment promotion prioritisation is required on a long-term, sustained basis, if they are to be more effective.
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The establishment of such a structure should be confirmed in law, via a legislative process to ride through political and administrative transitions.
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More technology enablers are required such web portals, online investment dashboards, online incentive apps, data sourcing and data analytics, social media marketing, etc.
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A holistic, SDG-aligned project proposal screening matrix is often helpful.
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A focus on significant "economic" infrastructure upgrades as platforms for private investment.
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National Government "City
Support Programmes" to focus on direct metro level engagement with prioritised investment promotion and infrastructure support .
Curtis emphasised that in order to implement the SDGs it is important to start with the likes of Goal #17: 'Partnerships for the goals' in order to enable a direct project focus to jointly deliver on other key SDGs such as #7 'Renewable energy', #8 'Good jobs and economic growth', #9 'Innovation and infrastructure',
#10 'Reduced inequalities' and #11 'Sustainable cities and communities'. There are also other SDGs which are already well aligned with current eThekwini Metro priorities, leading to partnership projects (in SDGs #6 'Clean water and sanitation', #13 'Climate action', and #15 'Life on land').
The UN organisers in turn advised the following for Metro leadership to take note of: "Cities have a range of options to attract and mobilise investment in SDG sectors, including:
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Develop expertise, network, and share best practices
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Improve efficiency of local revenue generation and find innovative ways of generating additional local revenue such as:
»» Land-based finance
»» Establishing municipal corporations and municipal development funds
»» Borrowing from capital market via municipal bonds
»» Obtaining funds from institutional investors (e.g. pension funds) and equity markets
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Cities with long-term plans do better, even if they do not follow them
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Measure and report on SDG indicators at the city level
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Develop a city strategy for promoting investment in SDG sectors
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Enlist chambers of commerce, industry associations, and other stakeholders
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Develop "Green" municipal financial instruments
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Establish subnational or city investment promotion agencies (IPAs) and economic development agencies or local branches of national IPAs
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Partner with national IPAs as well as regional and other subnational IPAs and outward investment agencies
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Benchmark against other locations
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Engage in investor aftercare
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Evaluate and improve investment facilitation
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Set up relevant special economic zones, parks, or clusters
It is pleasing to note that eThekwini has often played a key role in many areas noted above, and now, with the recent help of the National Treasury and the World Bank, will be looking to further improve Durban Investment Promotion's operations, teams, structures and tools.
Further background papers on aspects of this topic from the UN's perspective are available at: UNCTAD's Global Action Menu for Investment Facilitation (at http://investmentpolicyhub.unctad.org/Blog/Index/53) Investment Policy Framework for Sustainable Development (at:http://investmentpolicyhub.unctad.org/ipfsd).