Among the most significant structural changes in the post-crisis investment landscape is a repositioning of governments as drivers rather than seekers of crossborder investment, said panellists at an international gathering of investment promotion agencies in Buenos Aires in June.

The nature of the originators of foreign investment has evolved – with governments acting as outright or de facto investors through rescue packages, while sovereign wealth funds are maintaining their popularity (see article, page 19). For attendees at the World Association of Investment Promotion Agencies conference, the implications are manifold.


“The state is coming back and investment promotion agencies, as state mechanisms, will have a major role to play,” said Kobsak Chutikul, special adviser to the secretarygeneral of the United Nations Council on Trade and Development.

Sheila M’Mbijjewe, a member of the monetary policy committee of waIpa conFerence the Central Bank of Kenya, said the size and clout of multinational companies will be called into question and a new balance sought between investors and host countries.

“In 1960, General Motors was the 12th [largest] company in the world. For many years, the sheer size of some of the corporates allowed it to act with impunity. This will need to be reviewed,” she said.

However, the private sector is rebounding and corporate expansion resuming after a lull. “One thing we are seeing is a more organic growth for multinational enterprises and their forays into international markets,” said Michael Gestrin, head of the Latin America programme at the Organisation for Economic Co-operation and Development.

“There is now a slowdown in government-driven M&A activity, but we have not seen a stark decline in overall M&A flows, which suggests that companies are finding money for expansion.”