The Policy Framework for Investment (PFI)

| Documentation | Conferences | www.oecd.org/daf/investment/pfi 

What is the PFI?   The Policy Framework for Investment (PFI) is the most comprehensive and systematic approach for improving investment conditions ever developed. It covers 10 policy areas and addresses some 82 questions to governments to help them design and implement policy reform to create a truly attractive, robust and competitive environment for domestic and foreign investment.   The 10 policy areas are widely recognised, including in the Monterrey Consensus, as underpinning a healthy environment for all investors, from small- and medium-sized firms to multinational enterprises.

The PFI is neither prescriptive nor binding. It emphasises the fundamental principles of rule of law, transparency, non-discrimination and the protection of property rights but leaves for the country concerned the choice of policies, based on its economic circumstances and institutional capabilities. One size does not fit all.   Although addressed to governments, the PFI needs to be seen in the broader context of other converging international initiatives to improve the investment climate, including the OECD Guidelines for Multinational Enterprises.

Who uses the PFI?

With its broad horizontal approach, the PFI assists governments engaged in domestic reform, regional co-operation or international policy dialogue on investment. It also serves as a reference point for investment promotion agencies, donors as they assist recipient country partners in improving the investment climate, and businesses, trade unions, and NGOs in their dialogue with governments.

Developed by a task force representing some 60 economies, as well as business, labour, civil society and international organisations, the PFI is a flexible instrument that governments can adapt to their specific circumstances, objectives and needs while at the same time providing a common platform for dialogue and peer learning. The flexibility is evident in the variety of ways governments are already using the PFI:

• OECD Investment Policy Reviews of China, Egypt, India, Peru, Russia and Vietnam have been structured to varying degrees along the lines of the PFI. A review of Indonesia is underway.
   
• The Investment Reform Index (IRI) of the Investment Compact for Southeast Europe applies the PFI to measure and communicate progress on investment climate policy reforms.
   
• In the Middle East and North Africa, under the MENA-OECD investment programme, participating countries will develop and implement a comparative benchmark measuring the process of investment policy reform based on the PFI.
   
• The NEPAD-OECD Africa Investment Initiative is exploring options for introducing a PFI-like investment dimension in the African Peer Review Mechanism. PFI assessments of several African countries are planned.
   
• Latin American countries have expressed strong interest in launching a regional capacity building initiative based on the PFI. Chile co-chaired the work on the development of the PFI. Costa Rica used the PFI to conduct a self-assessment of its investment climate.

Documentation and links

Background material

• Making the most of the Policy Framework for Investment, Speech by the OECD Secretary-General on 20 July 2006
• Using ODA to Promote Private Investment for Development: Policy Guidance for Donors, 15 March 2006
• OECD Initiative on Investment for Development - Note on the outcome of the work, 15 May 2006 [ English / French ]
• Public consultation, including responses received, January 2006
• OECD Observer article: Investing for development: The Policy Framework for Investment, October 2005
• Policy Lessons on the Role of ODA in Mobilising Private Investment, 2005 
• Enabling Development - OECD statement to the follow-up of the UN Millennium Declaration and Monterrey Consensus, May 2005 [ English / French ]
• OECD Initiative on Investment for Development: Progress Report, April 2005 [English / French ]
• OECD Initiative on Investment for Development: Towards a Policy Framework for Investment - Overview, March 2005
• OECD Investment Policy Reviews

Partner organisations

• World Bank www.worldbank.org
• World Bank Doing Business Database www.doingbusiness.org
• Public Private Dialogue www.publicprivatedialogue.org
• World Trade Organisation www.wto.org
• United Nations Conference on Trade and Development (UNCTAD) www.unctad.org

Conferences

• 2nd OECD-Southeast Asia Regional Forum: Enhancing Competitiveness through Regional Integration, Bangkok, Thailand, 27-28 April 2009
• Global Forum on International Investment VII: Best Practices in Promoting Investment for Development, Paris, France, 27-28 March 2008
• NEPAD-OECD Roundtable on Strengthening Investment Climate Assessment and Reform in NEPAD Countries, 27-28 November 2007, Lusaka, Zambia
• APEC High-Level Public-Private Policy Dialogue on the Policy Framework for Investment, Melbourne, Australia, 26-27 April 2007
• NEPAD-OECD Roundtable on Mobilising Private Investment in Africa in Support of Development: Laying the Foundations for Sustained Progress, Brazzaville, Republic of Congo, 12-13 December 2006
• OECD Global Forum on International Investment “Enhancing the investment climate: the case of infrastructure”, Istanbul, Turkey, 6-7 November 2006
• APEC-OECD Seminar on the Policy Framework for Investment, Hoi An, Vietnam, 8 September 2006
• Conference on Investment for Development: Making It Happen, Rio de Janeiro, Brazil , 25-27 October 2005
• Workshop on the Investment and Business Climate in the Russian Federation: A Regional Perspective, St. Petersburg, Russia, 9-10 November 2005
• APEC-OECD Seminar: Working Together on Investment for Development, Busan, Korea, 14-15 November 2005
• Investment for Asian Development: Lessons so Far, Challenges for the Future, Jakarta, Indonesia, 5-6 July 2005
• Investment Compact for South East Europe: Statement from the Fourth Ministerial Conference, Sofia, Bulgaria, 10 June 2005
• NEPAD/OECD Investment Policy Roundtable on Investment for African Development: Making it Happen, Entebbe, Uganda, 25-27 May 2005
• 2004 Global Forum on International Investment, New Delhi, India, 20-21 October 2004