The
World Investment Report 2021: Investing in Sustainable Recovery was launched on 21 June 2021. Chapter III of the Report looks at national and international policy measures affecting foreign investment in 2020, and at the
impact of the COVID-19 pandemic on investment policymaking. The Chapter also zooms-in on the policies to regulate and promote investment in the health sector and on what needs to be done for post-pandemic recovery and resilience. Key findings include:
The policy trend towards increased investment regulation continued in 2020, as regulations or restrictions, mainly adopted by developed economies, more than doubled compared to 2019.
The increased use of screening mechanisms driven by national security concerns over FDI in sensitive industries was a key factor.
Measures that liberalized, promoted or facilitated investment were adopted primarily in developing economies and their total number remained stable. As a result, the share of more
restrictive policy measures reached 41 per cent, the highest on record.
At the international level, key developments include the emergence of new megaregional IIAs, as well as continued efforts to reform old IIAs to minimize the risk of investor–State
dispute settlement (ISDS) proceedings, especially in light of policy responses taken in the context of the pandemic.
The new round of global tax reform may also exert a far-reaching impact on future global investment patterns and investment policies.
An UNCTAD survey of 70 economies found that entry restrictions on investment in health are rare, and while most countries promote investment in the health sector, the range of tools
employed varies significantly depending on the region and level of development.
No country has introduced new FDI entry restrictions in the sector since the outbreak of the pandemic, but almost one third of them have reinforced screening procedures, while many
have introduced investment incentives to foster research and supplies related to the pandemic.
IIAs can help by promoting, facilitating and protecting investment in health, but they may also come into play in relation to policy responses taken by governments to address the
economic impact of the pandemic, highlighting the need to safeguard sufficient regulatory space. Furthermore, the use of IP rights should strike an appropriate balance between attracting foreign technology and using TRIPS flexibilities.
In LLMICs, open investment policies and investment promotion schemes cannot make up for the challenges that limit their capacity to host medical industries with adequate portfolios
of medicines or vaccines, health infrastructure or services. Addressing these challenges requires a holistic approach and UNCTAD proposes 10 main action areas for mobilizing the levels of investment needed to achieve SDG 3.
