More than half of investment promotion agencies (IPAs) across the globe have yet to work their contact books to provide much-needed assistance to major investors trying to navigate the headwinds caused by Covid-19 in their region, a World Bank survey has found.
Only 49% of the 41 leading national IPAs surveyed by the World Bank confirmed they had bolstered direct assistance by “contacting all established firms” in April. The response rate grows to 59% when it comes to bolstering assistance by “solving individual investors issues”.
“IPAs need an updated list of established investors (especially foreign ones) to identify high-risk firms and their suppliers, directly contact them, and broker solutions for their individual challenges,” the World Bank survey argued.
Crisis mitigation measures
Covid-19 has wreaked havoc with the world economy, throwing IPAs across the globe into crisis management mode to mitigate the impact of the crisis on their base of their investors.
Beyond bolstering direct assistance, the World Bank surveyed some of the other top measures implemented by the agencies in April.
Eighty per cent of the IPAs surveyed said they had to introduce remote working as their governments introduced social distancing practices and nationwide lockdowns.
With regards to “strengthening transparency and communication on Covid-19”, 63% of the surveyed agencies said they are doing so by “updating investors on impact”, whereas the response rate grows to 69% when it comes to “updating investors on country measures or response”.
Boosting advocacy services has been another pillar of the IPAs’ adjustment by means of systematically gathering information about issues investors are facing (63%); advocating with the government for emergency policy responses or reforms (54%); and following up until reforms/solutions are provided (61%).
“As part of both assistance and advocacy services, IPAs must work even more closely with government agencies and stakeholders, establish response task forces, and actively participate in committees discussing the issues and deliberating on feasible measures to alleviate the impact on private investment,” the World Bank said.
The IPAs surveyed by the World Bank also provided new information on the troubles that some of the main foreign investment intensive sectors under their radar screen are facing. The pandemic has most affected the hotel and restaurant sector, followed by other travel and tourism services, wholesale and retail trade, logistics and real estate, said IPAs in the survey. The manufacturing segments most affected by lockdowns are automotive & transport equipment and textiles, apparel and leather industries.
On the other hand, the crisis has affected certain segments significantly less, such as IT and telecommunications equipment, computer and software services, telecommunications, media and entertainment, pharmaceuticals, biotechnology, medical devices and health services.
“It is anticipated that IPAs will also need to recalibrate their service provisions again, with a stronger focus on articulating value propositions in segments offering new opportunities for growth within the current global environment (ecommerce, digital technologies, cybersecurity, healthcare and biotechnology, and renewable energies, as mentioned earlier herein),” the report concluded.