Joerg Simon, Senior Investment Adviser MILLENNIUM CITIES INITIATIVE

1. Handbook for Promoting Foreign Direct Investmentin Medium-Size, Low-Budget Citiesin Emerging Markets Joerg Simon, Senior Investment Adviser MILLENNIUM CITIES INITIATIVE THE EARTH INSTITUTE AT COLUMBIA UNIVERSITY http://mci.ei.columbia.edu

2. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • The Millennium Cities Initiative (MCI) • MCI‘s investment-related activities • Importance of capacity-building in city investment promotion • Purpose of the Handbook • Structure of the Handbook • Preparation of the Handbook • Follow-up

3. Millennium Cities Initiative The Earth Institute at Columbia University Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Millennium Cities Initiative (MCI) • Localize MDGs • Continuing rural-urban migration; MDGs at national level – need to be • achieved at local level • Assist second-level cities in Sub-Saharan Africa in achieving the MDGs by 2015 • Criteria for selection of cities; stimulating economic development; • needs assessments; integrated MDG-based city development • strategies • Complement to Millennium Villages • Agricultural value chain; cities as regional hub for rural area

4. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • MCI‘s investment-related activities • Preparation of investment-related materials • Assessment of legal framework for investment, investors guides; • assessment of infrastructure constraints to business activities; • investment opportunities and profiles of promising sectors identified by • KPMG, UNIDO and Columbia University • Dissemination of information • Investors missions; investment days in-country and abroad; specific • targeting efforts • Promoting the city as an investment side • Strengthening the city’s capacity in facilitating investors in establishing • business and after-care services; enable the city administration to • better servicing businesses

5. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Importance of capacity-building in city investment promotion • Role of investment in building productive capacity Investment brings capital, jobs, technologies and skills; it contributes to the improvement of local infrastructure, export capacity and Competitiveness of local enterprises • Investment is always local Cities are key nodes of the global economy and supply pools of skilled workers that companies need to access; cities also benefit directly from inward investment (e.g. also from business linkages) Companies are now investing more and more where the resources (including human talent, services) are located; companies increasingly assess and compare the attractiveness of cities (or sub-regions) rather • than countries when making location decisions

6. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Importance of capacity-building in city investment promotion (continued) • Growing importance of promoting cities • Cities respond to their growing importance by developing their own • capacities for attracting and facilitating inward investment; • the number of sub-regional and city investment promotion agencies • has increased during recent years – both in the developed world as • well as in emerging markets • Challenges medium-sized and low-budget cities in emerging markets are facing in attracting FDI Limited budgets and underdeveloped capacities for attracting and servicing investors, identifying investment potential; existing investment climate and infrastructure

7. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Purpose of the Handbook • To serve as a tool for medium-sized, low-budget cities to: • Strengthen investment promotion capacity • Develop a strategic approach to attracting investment • Brand and market the city • Identify potential investment opportunities • Facilitate investors and provide after-care services for investors • Promote private-public sector dialog • Better benefit from FDI, e.g. through business linkages

8. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Structure of the Handbook • 10 modules, each of them is being introduced by topics, objectives and • concluded by key take-away points and resources. Cases of best practice • demonstrate how cities and agencies are gaining experience in attracting • and servicing investors. • Module I. The Handbook • Based on world-wide best practices it provides under-resourced cities in • emerging markets with a practical framework and easy-to-follow guidelines • on how to increase inward investment. While the focus is on how to attract • FDI, most of the modules will be equally useful for attracting domestic • investment. • Module II. Introduction to foreign direct investment • The module provides a general overview of FDI definitions, determinants, • benefits, trends and issues. It is essential background reading for investment • officers and FDI policy makers wanting to understand the world of FDI.

9. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Structure of the Handbook (continued) • Module III. A framework for investment promotion • A complete overview of “how to do” investment promotion, as well as the • rational and importance of it. • Module IV. How to develop a city investment promotion strategy • Helps policy makers develop an investment promotion strategy for their • cities, preferably developed in conjunction with the national IPA. The • strategy can use the templates provided in this module, with a key emphasis • on making the strategy sector-based and focused on achieving clear targets • that can be monitored and evaluated. • Module V. How to build a city investment promotion agency • Designed to inform cities on how to establish a new investment promotion • agency. The practical illustrations of the organizational structure, vision, • mission, and client charter of an IPA are laid out, as are budgets and • funding. Also discussed are the staff, skills and roles, as well as the • importance of IPA networks.

10. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Structure of the Handbook (continued) • Module VI. How to market a city to foreign investors • Pays attention to the importance of marketing in attracting inward • investment to a city. Provides best practices and templates for developing • the most important marketing materials. Cautions low-budget cities to • spend very limited resources on expensive image and brand building • campaigns. • Module VII. How to target investors and generate leads • Provides city IPAs with a comprehensive toolkit for developing and • implementing an investor targeting and lead generation strategy and • individual campaigns. By following the main topics and proven best • practices, city IPAs should, over time, increase the volume of investment • into their cities.

11. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Structure of the Handbook (continued) • Module VIII. How to facilitate inward investment • Designed to assist city IPAs in understanding how to handle investor inquiries, provide information to an investor in the most effective format, organize a successful site visit, and consider the options for the facilitation services the city IPA can provide to an investor. • Investment facilitation is essential for every city IPA to ensure seamless entry of investment. Effective investment facilitation ensures that: • (i) The investment is completed (and not cancelled). • (ii) Investors are happy, which adds to the image and reputation of the city and its IPA - a satisfied investor is the most effective promotional tool possible. • (iii) Reinvestment is encouraged.

12. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Structure of the Handbook (continued) • Module IX. How to develop after-care and policy advocacy • Informs medium-size, low-budget cities in emerging markets of the • importance of after-care and policy advocacy and provide guidelines for • how a city investment promotion organization can develop an after-care • and policy advocacy program. • Module X. Next steps: moving city investment promotion forward • Assists a city set up an investment promotion agency and implement • investment promotion activities, identify priorities for investment promotion and establish a monitoring and evaluating success.

13. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Preparation of the Handbook • Prepared in 2008/2009 • Workshop with international experts in December 2008 • Final draft in May 2009 • Verification with a number of experts in city investment promotion • Launch in December 2009 • Available on-line in English onhttp://mci.ei.columbia.edu

14. Handbook for Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets • Follow-up • Distribution world-wide to city and sub-regional institutions • Publication of hard copies • Translation into Arabic, French, Chinese, Russian • Training based on the Handbook • Thank you very much for your attention!