FDI Recognized As Poverty Eradication Tool

from Jones Bahamas

By QUINCY PARKER
The policy of creating an atmosphere for foreign direct investment – as done by successive Bahamian governments – has been recognized by the heads of Commonwealth countries as a tool for economic growth and poverty eradication.

The policy of creating an atmosphere for foreign direct investment – as done by successive Bahamian governments – has been recognized by the heads of Commonwealth countries as a tool for economic growth and poverty eradication.

In a communiqué issued following the Commonwealth Heads of Government Meeting (CHOGM) in Kampala, Uganda, the heads also stressed the importance of creating an atmosphere that encourages domestic investment as well.

"They recognized that improvements in the business environment and overall regulatory framework which reduce investor costs are crucial to promoting private investment," the communiqué said.

"They also called for an increased focus on developing domestic financial markets and providing opportunities for domestic investors. Heads of Government encouraged the use of home country incentives to promote investment in least developed countries (LCDs), small states and other developing countries."

The communiqué said heads recognized that improving access to financial services for the poor and vulnerable is "an essential element in the fight against poverty and called for continued efforts to integrate them into the formal financial system."

The heads spoke of the importance of "micro-finance" and "micro-credit" in providing access to capital and inclusive financial services for people living in poverty.

Another matter of importance for the heads was the continued facilitation by the Commonwealth Secretariat of dialogue between the Organization for Economic Cooperation and Development (OECD) and Commonwealth countries on the issue of "a global level playing field and transparency and information exchange in tax matters."

The heads called for constructive engagement on the outstanding issues.

The CHOGM communiqué also documented the heads’ concern at the recent increase in frequency and intensity of natural disasters and their often devastating social, economic and environmental impact, particularly on Small Island Developing States.

The heads encouraged small states to continue to implement "outward-oriented development strategies" to help them overcome their vulnerabilities.

"Heads of Government further welcomed the newly formed Small States Network for Economic Development, set up under the auspices of the government of Malta and the World Bank, and expressed the hope that the network would be an effective tool in fostering sustainable economic development in Small States," the document said.

Small states were urged to build their economic resilience by making appropriate interventions in four areas: macro-economic strategy; micro-economic market efficiency; good governance, and social cohesion.

The heads recognized that an important element in development strategies for small states is the operation of the labour market, and urged small states to implement measures on both the demand and supply sides of the labour market to address youth unemployment and the migration of the highly skilled.