3. Policy Advocacy - Defined
Policy Advocacy - Defined
Institutionalized process of pursuing sustained
improvements in the business environment and
competitiveness
3
4. Investment Promotion Cycle
Investment
Climate +
Investment
product
Climate
Policy development
Input Image
building &
branding
Systematic
Feedback
Lead /
Investment
Generation
Aftercare /
investor
Development Formulating
Development
Investor Package
facilitation /
servicing
4
5. Context
• Investment Policy Advocacy – can be seen as subset of
regulatory governance
• In addition – policy advocacy can be a more integral part of
the investment promotion and facilitation process – for
example, a policy decision to build the Kosovo brand
• Within the latter context – policy advocacy capitalizes on the
interface the IPI has with clients and linkages with
stakeholders – moreover, it builds on international market
intelligence and knowledge of the competitiveness of the
current investment climate
5
6. Policy Advocacy - 6 Core Steps
1. Data collection;
2. Analysis;
3. Communication and
stakeholder management
4. Decision;
5. Implementation
6. Monitoring and evaluation
6
7. Objective
• Includes:
• Establishing and/or improving the
process that leads to the formulation
of a reform agenda and manages to
institutionalize an ongoing reform
process
• Identifying pressing investment
environment issues and forwarding
them to the Government for action,
and
• Pro-actively advocating a new
direction for Government policy in
order to make the country or region a
more attractive location for FDI
(usually in the case of new sectors)
8
8. Pitfalls/Confusion - Advocate vs. Primary Actor
• The IPI should become a key advocate for change of the
investment & policy environments affecting its clients, the
investors
• IPI does not have the power or the mandate to change
many of the policies that will affect the investors
• Must work in harmony with Government Institutions, not
against them
• Must establish and follow a formal process in order to
maintain neutrality and independence
• However, results build credibility and status
9
9. Policy Advocacy – CzechInvest Case Study
4868,08
5000,00
4500,00
4000,00
CzechInvest: by January 2009 had attracted over $24 billion;
3504,94
3500,00
3000,00 2716,24
2532,89
2500,00 2169,92
2017,07
1774,05
2000,00
1340,94
1500,00 1210,73
850,65
1000,00 592,13
500,00 196,20
12,50 71,00 80,90 59,39
0,00
$
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
million
•In 1997 CzechInvest fulfilled a policy advocacy role to introduce incentives
•CzechInvest presented the Czech Government with a complete solution – not just
recommendations
•The ‘package’ from CzechInvest included a draft law; endorsement from the
European Commission that incentives were EU compliant; an incentive manual
and the design of an administrative and monitoring process
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10. Types of PA issues/tasks
• Drafting, enacting and implementing laws and regulations:
• Investment Legislation
• Liberalization to open restricted areas of the economy
• Special Economic Zone/Free Zone legislation
• Tax law and Investment Incentives
• Business Establishment procedures
• Enhancing Human Resource education and training required by
the target industries and segments
• Altering University Curriculum to produce skilled laborers for new FDI
sectors
• Enhancing Infrastructure:
• Transportation:
• Roads, Sea Ports, Airports, Railroad
• Service Providers
• Telecommunications & Utilities
• Financial Institutions
• Vision, future opportunities, emerging segments 11
11. Key Elements for Policy Advocacy
• External Organization:
• High-level Steering Committee
• Inter-institutional issue-solving Implementation Task Force
• Inter-institutional bridges/network to start productive relationships
• Partners:
• President, Prime Minister
• Ministers of Finance, Economy, Education, Public Works
• Department Heads
• Universities, Think Tanks
• Foreign Investor Councils (FICs)
• Chambers, Associations
• NGO, Unions, Media
12
12. Step 1: Systematic Gathering of Information about the
Investment Environment
• Opinions, complaints and praise regarding the
investment environment will pass through IPI
on a constant basis
• Reactively and pro-actively collect those
pressing issues that hold further investment
• In General
• Of a particular sector, industry, segment
• Many will include small, insignificant, individual
problems
13
13. Step 1: Systematic Gathering of Information about the
Investment Environment
• Sources of Input
• The most important and obvious sources:
• Established Investor surveys
• Investor Perception surveys
• Benchmarking
• Lost investment opportunities reports:
Why not invested
Why disinvesting
• Feedback obtained during IPI’s operations:
• Desktop research
• Telemarketing
• Meetings with target investors
• Site visits, briefings and debriefings
• Investor Servicing
• Aftercare
14
14. Step 1: Systematic Gathering of Information about the
Investment Environment
• Sources of Input
• Public-Private Dialogue (PPD)
• Chambers, Associations, etc.
• Think Tanks, Universities
• Public Consultation
• International rating agencies:
• Corruption (Transparency International)
• Political/Economic environment (Heritage
Foundation)
• Doing Business (World Bank)
• Investment Climate Assessments (World Bank)
• Economic Competitiveness (WEF, UNCTAD)
• OECD Investment Framework Review
• Human Development Index (UNDP)
• Credit (S&P, Moodys) 15
15. Step 2 – Systematic Prioritization of Pressing Issues -
Researching/Analyzing
• Set prioritization criteria:
• Rigorous, replicable and transparent
• The origin of the information:
• Surveys, existing and potential investors, exit/loss
opportunity reports take priority
• Importance expressed by investors
• Relevant patterns, recurring issues, investors taken actions
• PA Officer/Task Force assigns priority based on pre-
established criteria
• List of priority issues
• Clear list with IPI Management
16
16. Step 2: Researching/Analyzing Priority Issues
• Research each priority issue:
• Interview the person who input the issue in the ITS to get a more
detailed perspective on context and content.
• Coordinate with Aftercare Officer for recurring issues/problems.
• Undertake an internet and document search to get further
background information.
• Interviews with parties outside the agency that could provide a better
understanding of the issue.
• PA Officer/Task Force works on possible solutions
• Integrated approach with implementing agencies or ministries as an
in-depth knowledge of the way that the particular policies work is
required
• Problem/Issue/solution Matrix vs. involved institutions
• Revise list and recommendations as needed 17
17. Step 3: Preparation of PA Memorandum
• Prepare a one-page Memorandum on the issue:
• Describe the issue
• Highlight its origin
• Provide details as needed
• List consequences
• Provide possible solutions:
• Required change in policy/regulation
• Involved institutions, implementing agencies or ministries
• Provide references of success in other countries, if available
• Measures of success
• Provide annexes with supporting statistics, verbatim, etc.
• Management Review:
• Weekly, biweekly or monthly
• Management and PA Officer review the memos
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18. Step 3: Presentation of Memos to Board/Committee
• Management and PA Officer make presentation of Memo/s to the
Board/Committee
• IPI must partner via the Board/Executive Director with relevant
government ministries and agencies:
• These institutions have the authority
• IPI has little power to change the investment environment
• It should not seek to assume this power
• The role of parceling out tasks to external actors for resolution is
not within the responsibilities of most of the Board of
Directors/Executive Director – unless Chairperson is the Prime
Minister
19
19. Step 4: Board/Committee Decision, Action & Follow-up
• Board/Committee takes over the issue/s
• Board/Committee meetings are forum to:
• Approve the recommendations and forward to appropriate
Government institution
• When vested, make a firm political decision on how to resolve
each issue and the reasonable timeframe.
• Several Board/Committee members should be in key
Government positions from which they can implement the
required changes or the Executive Director can pass it to the
Relevant Ministry or directly to Cabinet.
• Spur the implementing agencies and ministries into action.
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20. Step 5 & 6: Implementation, Results Communication and M&E
• Attention of top level of government is a key ingredient
• Ensure the financial and technical resources to help line
administrations implement advocated reforms
• PA Officer helps in implementation as needed, via his/her
participation in Task Force as needed
• Track progress and report to top level of Government and
key stakeholders
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