 Hello, everyone. I hope this has worked and you can all hear me. Hello, everyone, and welcome this this Session just making sure that everybody can hear me and this session will focus on foreign direct investment and What approaches tools? Policies on the part of the public and private sector are needed to revive investment flows in particular for sustainable investment I think it's actually quite apt timing for this session at the end of this world economic forum edition Because I think what we will discuss today Actually picks up many of the themes of of the past few days of the last week here at the virtual Davos so just as a backdrop last year global foreign direct investment fell nearly 50% Amid the global COVID pandemic but also the build-up of regulatory and trade barriers China whose economic recovery has been kick-started faster than the rest of the world Surpassed the United States as the number one recipient of foreign direct investment now This dramatic fall in FDI has impacted developing economies in particular because of course They often rely on FDI as their largest source of external finance and of course the fall has thwarted opportunities for sustainable growth even as there has been a growing pool of sustainable capital that is looking for Investment opportunities so the aim of this panel is twofold first of all In the first part we want to examine the hurdles to FDI that we have seen as a result of the Pandemic but also more structurally and then in the second part we want to propose possible solutions Including whether there is support for new public private partnerships that can emerge as the world's economies Pull themselves out of the pandemic downturn To tackle these issues. We have a distinguished panel from four different countries Frank Ning chairman of Chinese chemical company, Sino Ken. Welcome chairman Pascal Kengel ambassador of France for international investment investment welcome ambassador Villes Kinari minister for development cooperation and trade for Finland welcome minister and Alex Zwayne chief executive officer of global innovation fund UK Now just quickly this session will be divided into two parts with the first as a round table conversation with the panelists And then a second part which is a discussion open only to forum members and partners Which will discuss possible and hopefully detailed Solutions and as a housekeeping note when the first part of the session ends those forum partners who are joining the And are on top link should just Automatically my fellow panelists for this first session we're going to try to focus on the key hurdles to sustainable FDI and I'd like you all to be as Concise and specific as possible so that we can go through two or three couples of rounds in a full 22 minutes That we have But also so that we can go into the second session with some focused jumping off Point so first quick round Robin for each of you on what you think the two biggest Let's say challenges to boost insustainable FDI money political bureaucratic Donald Trump Let's start with you chairman name for investment from from China is very obvious Regulations political reasons and approvals from other countries and And the Chinese investment globally today Particularly in a few countries are not welcomed so Business are king and eager to grow and to invest but a lot of Approval process either is industrial or Foreign investment policy security national security everything So that you can see is why the Chinese Investment out of China from China to other country Has been slowing down So it's it's very obvious today. Thank you Ambassador Kanye So essentially I believe that to rethink about FDI you need to make sure that you first Protect or not protect maintain your own domestic economy And that's why in France why we took the number one spot Bay on EY of the most attractive country in Europe we know very focused about Essentially ensuring that we go through that crisis With the minimum damage and giving the means to both the states and the company to welcome the safety eyes Once this is stated it is clear or so that any measure which is linked to protectionism any Measure which will be encouraging trade agreements will be critical and we need no both parts Europe US and China Essentially to realize that yes, there is a big journey of protectionism on the places There stays the government's the people right wants to know more about what's having in the meantime our job My job has been to explain to the French People here that 10% of the total populations is directly linked to international investment That they represent 20% of the R&D in France 30% of exports So it's a good thing to have basically foreign investments to come here and to welcome them the best we can so both Addressing the issue that we have you know they can be and essentially continuing to be welcoming in scale Or if we don't do that we will fail and we lose a wealth altogether Okay, so the solution you saying is lies inside as much as it is external coming in It's a very good way to say that better and quicker Ministers can I Well, thank you so much For me as a minister of trade and development, of course the first main message is that it's so important that Trade and development go hand in hand because situation is very serious The foreign direct investments. They have dropped by more than 40% in 2020 compared to 2019 and as we all know in the economic recovery FDIs will play a crucial role and Therefore, of course, my message is that private sector is a key the official development assistance Assistance is just a fraction of the global financial needs and we can use Development policy instruments to catalyze Private investments and therefore, of course Once again Development and trade and the trade policy becomes so important to boost the investment But I think at the end of the day what we need now we need a system level change Otherwise, we will not be able to tackle such Challenges as climate change and of course the current covid situation the pandemic Got it, and I want to come back to you on the second round. I'm going to press you on a couple of things you said but Sorry Somebody say to me go to Alex Alex. I meant Dr. Swain, please over to you. You have a global Perspective your name is similar to mine. So it came automatically. You have a global perspective On this what are to your mind the biggest hurdles? Thanks very much Despite what you've mentioned about the decline in FDI over the past in the very short run I'll emphasize that in fact the global pool of potential funds for sustainable finance is growing It's prevented for a few structural reasons like the minister said from reaching the markets that needed most I think there's three big structural challenges that we could take on how we measure impact And so we think about the risk return trade offs We're willing to take how we structure investment to manage risk in pursuit of social value and how we combine and justify the combination of Financially concessional and more commercial capital and blended transactions I'll just say a couple of sentences about the first of these Measuring impact because then other things about Managing and tolerating risk and blending capital really flow from that Let me give you one example from our investment portfolio In 2016 we provided an early seed round of debt financing to a again in company called safe Bota who were working to take the idea of a safer more professional Motor bike taxi service to scale we exited that investment successfully in 2018 when safe Bota raised an oversubscribed equity round with traditional commercial capital Now why was gif willing to invest before other traditional capital was able to in this company? well at gif our mandate is to explicitly to invest in pursuit of social impact first with financial returns as a means to the end of scale and By measuring these benefits the social benefits rigorously We can place a value on this impact and therefore price our investment differently than commercial investors can We don't think just about lives touch or jobs created We go deeper than that into thinking about our jobs productive What other benefits are realized in the case of that company safe Bota? We've modeled and estimated that 200 deaths due to motorcycle accidents have been prevented since our investment in that company And there's something like nine million dollars in discounted net social benefits from the innovation We're turning over seven dollars for every dollar that we invested in that company if you measure those kinds of impacts with careful rigor and colleagues like The minister from Finland who are here give that mandate to Development innovation partners then we can structure investments to tolerate financial risk in pursuit of social value We can think carefully about how to subsidize commercial capital to be crowded in Earlier to these markets that are going to be suffering from a lack of fd. I we can really help capital Get off of the sidelines and get into the game to Drive recovery and get back all the gains that we've lost over the past year because of the cost of the pandemic So thank you and and I want us to remember this issue over metrics And sort of a more expansive view of of metrics and this sort of investment and clearly though Your example cannot compare and i'm going to come back to You know the the chairman Ning cannot compare to china, right? We are speaking about sort of small targeted investments versus, you know, china Which has become the the number one destination for fdi. We're talking at bigger macro levels. So chairman Ning What, you know, why was this? What would you say the recipe to this sort of return increase of fdi Was especially against the backdrop of what, you know, we all know and have lived over the past few years of a you know, commonly Called trade war as it were Alexander for for for trade and investment China recent years Almost become the most open country in the whole world today So china has been welcoming free trade and investment fdi All the time And then china recovering Better or faster than other countries So that's why capital is still looking for their destination Actually, even before well before this pandemic even well before the trade war between china and us uh investment in china has been kind of from other countries has been You know rebalancing or relocating itself to other uh south east south east asian countries uh for low cost reasons And and but but gradually investment from other countries coming back Because china is attracting more investment in a high-end sort technology Or open market Attraction to all this investment So, uh, it's it's it's the market itself Provide opportunity for company to grow It's very much a company driven process So, uh, china is the most uh, uh, uh, let's say fastest growing a market in the whole world And a welcome investment A company grow here So, uh, there's no restriction So, I mean All these things has been It has been something the whole world Is offering to investors but today China is offering more But what would you say of the structural hurdles remaining then? Uh I I don't see too many, uh structure hurdles I I think it may be some some still some like for exchange in and out not not 100 free and and and maybe some kind of areas, uh China can see there's national security not open yet um But for most of the business most of the market has been open Yeah, okay, um, and that's if you can you so your job as you were saying before is to make france, uh, you know more attractive for investment And clearly france has some very important global companies in various sectors. So outward looking But it also, uh has a reputation, uh for a country that protects Uh national champions when push comes to shove So how does somebody in your position answer that and then specifically? Can you point to examples that have been a success? And if you can keep in mind, um this concept of sort of the metrics that that we We don't need to always look at metrics in the same, you know Kind of financial prism, but that actually to get to the financial success. There may be other other, um Metrics that we need to look at it's more social and socioeconomic metrics Um, yes. So yes, my job is to basically, uh, clearly get more human capital Money finance to invest in my country, right? That's clearly The objective and I'm sure that my colleague in Finland, right? Uh, we all want the same No, in the meantime We define learning actually from china Which has been developing an amazing state capitalism, right? That maybe we need to be a little less naive over the years Uh, and we also learned that against the amazing amount of investment we got from the us I would just recall to be attention that One out of five dollars essentially invested in France and I would say in uh in europe is coming from the us Um, and we believe that the time has come for us To realize that if you haven't taken full benefit of the First or second phase of the digital revolutions the one of the pc the mobile At the time where we talk about ia at the time about we talk about cloud We need to basically realize that's into our 500 millions inhabitant continent, right? Uh, there is an interest to to basically protect this now you talk to someone which has been leading one of the gaffa So I may be in a schizovoiding positions But I also become aware of the absolute necessity to basically recognize that each Territory has its own way of doing things when you see what we're trying to do with the commission Of the digital service act What has been done on the gdpr, which is essentially having a different stand. I promise you Uh, what we're trying to do on the cloud with the gaya initiatives Believe that the time has come where we basically not close the the frontier But essentially explain that the rule of engagements A need to change and how they need to change I mean we need to have a doctrine where people are coming in creating r&d Setting up operations creating jobs Poaching maybe the brain that we continue to educate through our own systems is all fine As long as this is essentially allowing us to create the required wealth locally and then as Dr. Swain mentioned We believe that the time has come finally that we look at some much broader than life issues like the climate change And that's why we have using this covet the clear intention to build The largest Decapitated economy in europe in france and in europe So for that better just to have statements on policy We took some concrete measure. We essentially banned today any export subsidies to a few to a fossil fossil oils or energies We essentially further developed the hydrogen by leveraging the debt All of that to tell you that we are now in a world where we are kind of the glorious modernizations We're so pleased to welcome back our friend of china of the last 30 years into the concert with nations Uh, we start from a lead positions. No, we are under runner-up But the way we're going to engage will be different less naive Better better manage and we will implement our own objectives We believe that private privacy is critical We believe that we don't want to see the far that california has gone through We believe that we want to have a better balanced world. That's what we in europe I'm talking for europe's because i'm from european europeans, but that's what we're going to do and on that Is not only us um representative of politicians is essentially the people in the streets And you know that we are quite vocal in france in having this ability to express themselves So we need to listen to them and basically play as what they want So, um, if I could come back to to you minister, um, we had, uh, we talked before Uh about, you know chairman ning talked about the market Uh, Ambassador ken you talked if you will about the Sort of ecosystem in a sense, uh, but you know government, right? What what can government do in terms of, you know, forcing the hand in terms of removing bottlenecks in terms of removing some of these structural impediments Uh in in detail what should governments do examples from yours and then exhortation for others Well finland is a is a good example Uh As a country We were a poor country After the war and and now we are one of the richest countries in the world because we have been Encouraging people for edu case and research and development And of course we have been creating world-level technologies and and a green transition But of course for finland for european union. It's so important that we really maintain and work on the Rules-based world order We have a wto in in crisis But we see that trade agreements trade and investment agreements Have a very important role because they provide stability Predictability for investors and of course i see that one promising initiative is the wto's investment facilitation for development But obviously, uh, we have to work On each and every element in these agreements and of course sustainable development sustainable development chapters And the implementation is really the key And of course i'm very happy that united nascent's u and global compacts as to give you an example With 12 000 companies in place really engage and and pave the way towards The sustainable development goals at the global level and really respect the 10 sustainable principles Dr. Zwayne, where does the role of government end and the role of the private sector begin? Who is the most responsible where? I think to answer this question in thinking about the least developed countries and where we want Uh financial flows to increase if we are to achieve the sustainable development goals and leave no one behind Is that the answer is a bit of both? And figuring out how to help both domestic resource mobilization Be catalyzed for to accelerate investment as well as external flows is is one of our big policy challenges um We see that the dfis the development finance institutions of the western countries in the oecd Are increasing the size of their budgets and their role in bilateral aid um But we haven't quite figured out how to create the right incentives for those dfis to improve the quality of public service provision Beyond traditional sectors like energy And I think that that's a great challenge for our dfis to take on is to think about how they can accelerate and improve the quality of public services In sectors not just in energy but in water and in public health And even in agricultural extension so that you can see creative ways of blending capital to accelerate The quality of public service provision in the less developed countries Well, just just to just a quick follow-up and then we'll do another lightning round But you know, I can you give us another example where you have seen this has worked particularly well non-energy obviously Yeah, I'll give an example actually of a french company. Um, that's one of the Grill stars in the global innovation fund portfolio The global innovation fund as some of you may know is backed ourselves by bilateral aid aid resources So the governments of the uk the us sweden, australia and canada use some of their aid budgets to capitalize the global innovation fund to invest To accelerate innovation in developing countries. So there's a company a french company in our portfolio that works in molly and contracts with utilities throughout french speaking west africa To help them provide pay-as-you-go water meters to poor households. So these are households that were previously Denied service probably because they most likely did not pay their bills to the utility and now with the City taps that's the name of this company with their services provided to utilities These households can be brought back into service and pay as they go for the water that they use I love this example because it's not aid money working around the state It's not helping an NGO to provide water services to these households in a way. That's not sustainable It's using an innovative approach But that's been used elsewhere and many times as you go to actually help the state do its job better And in a more sustainable way, I'd love to see more examples of this kind of investment in the portfolios of all of our dfi's Great. That's a great example that gets to some a lot of the themes. Okay We just have we just have a couple minutes before we have to break away for the second part of that conversation And I guess just as the last thing I'd like to ask you each just very pithily to say In a moment when you know, the global economy is still bleeding when the hope of vaccines You know vaccinating the world is going more slowly than than we had hoped And then when when new country is developed developing just across the world are really suffering How do you kick start this type of investment? What is the single most most important message that each of you would would give in order to kick start this And this will give us a good bridge for the next part of the of the conversation So just a lightning round. We'll go the other way around maybe uh, dr. Zwayne first Very pithily. We should capitalize Financial vehicles that have the patience and the risk tolerance to support building back markets not just selling into them Great. Okay. Going back minister skinnery Well, thank you. We need to build back better. We need to build back better and greener and of course then we have to catalyze investments great capacity But also we need to scale up. But of course we need The new normal way of doing it and and we need to work it together And of course we need trust that the companies really can see open stable and predictable markets Ambassador Kenny I think you know that typically in europe we've got a very high level of savings I think we should basically break the bank Get this money refocus Over innovation investment in a complete different way We shouldn't tolerate that one out of five dollars is in savings Serving only to create bubbles on the financial world of the real estate But we should dump him down Into the innovative company that dr. Zwayne was talking about On the new generations that we have here Which are finally willing to be entrepreneur having learned from both china And the silicon valley and do something concrete with this money. That's the best things I can think of What i'm thinking about one measure Great and terminating Yes, I think we basically How to understand The world economy in the last few decades Uh have been built on free trade and a free investment globally so I I think Any other country if you really want to kickstart your economy Or resume or attract more foreign investment You should treat foreign investment as good as your own domestic investment Even better even more incentive So I want to quote The tesla example in china you know tesla built its facility in shanghai in a very short period With a lot of support from the government even with the local finance and open market And compete against most of the smaller chinese electric car companies They are very successful so That's why china will be able to get a more investment because investment in china See a free market And and the growth potential so The government policy is so crucial To treat any foreign investment equally as your own domestic investors