OECD: Business Investment

Content Manager • 26 June 2019
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      “The contribution of international business investment to the Sustainable Development Goals” is the report which was published by the OECD. It surveys the main types of financing behind business investment in developing countries, recent trends, an evaluation of the contribution of these flows to the sustainable development goals (SDGs), and prospects going forward.    

      The report shows that an increasingly important source of international investment into the developing countries is China. In 2017, China doubled its mergers and acquisitions in developing countries to USD 25 billion, making it their top source of international M&A (ahead of Japan and the United States). 

      Private investors are important actors in financing for sustainable development through a combination of the sheer volume of financing they generate and the alignment of private sector motivations with the SDGs and their associated targets. Private investors are the single largest providers of cross-border financing to developing countries, so even if a relatively small share of this investment aligns with or supports development objectives, the potential for expanding the overall financing envelope for development objectives through policies aimed at improving business climates is significant.

      One of the areas where private flows align quite naturally with the SDGs is in the area of infrastructure, in particular with respect to SDG 6 (clean water and sanitation), SDG 7 (affordable and clean energy), SDG 9 (industry, innovation and infrastructure), and SDG 10 (reducing inequalities, which indirectly covers transport infrastructure as part of the target of reducing the cost of exporting). These are areas where private actors already play a leading role in building and operating the required infrastructure for effective delivery of the outputs and services associated with specific SDGs.

      The recent trends in private flows to the developing countries described in this paper suggest that our current course is taking us from “billions to millions” rather than from “billions to trillions”. This situation represents an urgent policy challenge. Therefore this paper suggests some expected responses by the global policy. 

      Looking beyond recent trends that raise the spectre of a development crisis if private flows stay on their current course, it is clear that there is much to understand about business investment, the largest single source of foreign financing going to the developing countries. This is an important gap in our knowledge that needs to be addressed with a view to informing an empirical policy-oriented agenda for maximizing the contribution of private investment to the achievement of the SDGs.

For more information, please see the full report attached below. 


This report was originally published on https://www.oecd.org/industry/inv/investment-policy/business-investment-sdgs.htm

Photo Credit: UNDP


DISCLAIMER:

The views expressed in this article and the report attached are the author's own and do not necessarily reflect those of the SDG Philanthropy Platform. The SDG Philanthropy Platform is a global initiative that connects philanthropy with knowledge and networks that can deepen collaboration, leverage resources and sustain impact, driving SDG delivery within national development planning. It is led by the United Nations Development Programme (UNDP) and Rockefeller Philanthropy Advisors (RPA), and supported by the Conrad N. Hilton Foundation, Ford Foundation, Oak Foundation, Brach Family Charitable Foundation, and many others.

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