IPA dialogue mechanisms

 

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2.5 To what extent does the IPA promote and maintain dialogue mechanisms with investors? Does the government consult with the IPA on matters having an impact on investment?


Rationale for the question

As an interlocutor between the government and the foreign or domestic investor, the IPA is often the main source of feedback to government policymakers on the concerns of investors, as well as an effective communication channel for the government when notifying investors of policies and practices having an impact on the investment environment. This role of the IPA can be particularly useful for SMEs which, because of their small size, can have a harder time than large organisations in evaluating proposed regulatory changes or expressing concerns regarding government policy. Thus it is important that IPAs and other agencies concerned with the investment climate actively study their needs.

Related PFI questions:

Questions 4.4 and 10.2 on intra-governmental cooperation and dialogue

Questions 1.1, 3.2 and 10.4 on public consultation mechanisms and procedures

 

Key considerations

To be an effective voice within government arguing for improvements in the investment climate, the IPA needs to maintain regular dialogue with existing and potential investors, as well as with other government agencies.

Forms of dialogue – Mechanisms for dialogue can take many forms, including industry representation on an IPA board, an investment advisory council, monthly meetings, structured surveys and periodic discussion forums on particular issues of interest to investors. It is good practice to use a variety of forms that ensure coverage of the views of investors in different regions, types of industry and scale of operations. The IPA should ensure that businesses in remote areas and SMEs with little time or resources to devote to meetings can participate.

Scope of dialogue – Dialogue needs to include large and small investors, as well as existing and potential investors. It needs to cover general and industry-specific concerns of investors, and it should consider both existing policies and practices and proposed regulatory changes.

  • Discussions with potential investors are important because they can represent new industries and opportunities and might bring up different issues than those faced by established investors in older industries. Gathering input from potential investors can be challenging because they are not likely to be located within the economy and thus dialogue would have to occur through other forms of outreach, such as trade fairs, personal visits and surveys.
  • Concerning dialogue on proposed regulatory changes, the importance of prior notification and consultation was discussed under Question 1.1. Investors and other stakeholders, as well as government agencies, should all have an adequate period to comment on proposals and there should be sufficient time for such comments to be incorporated into proposals. Building such notification and comment periods into statutes can help reassure all stakeholders that the government is open to their input.

Funding – All dialogue mechanisms require time, staff and funding, but well-planned and regular outreach to present and potential investors is indispensable in understanding the practical concerns that shape investor decisions. Because IPAs often do not have as much funding and outreach staff as they might desire, establishing priorities is important. If funds available to arrange meetings with potential investors are limited, it may make sense to prioritise such activities toward strategic sectors that build on or complement existing industries. The set of priority sectors ought to be agreed widely within the government but allow flexibility for investors in related sectors..

 

Policy practices to scrutinise

Dialogue with business

  • How regularly and in what forums do IPA staff meet with business representatives? Has business been asked to comment on the effectiveness of these forms of dialogue or does the IPA use a survey? Do investors offer any suggestions that could improve dialogue?
  • Does the IPA have private sector representatives on its board?
  • Does the IPA survey existing and potential investors to gather data on investments and employment and to solicit their views on the investment climate as a way of prioritising reforms?
  • Are IPA senior staff members available for meetings requested by business? Does business know that such open-door meetings are possible and welcome?
  • Do dialogue mechanisms include all the major sectors of the economy, including both foreign and domestic investors?
  • What special provisions are made to reach out to small businesses that often lack the time to attend regular meetings or the resources to fund a well-organised body to represent their interests?

Dialogue within government

  • How often does the IPA meet with other government ministries to discuss concerns, proposed regulatory changes and business issues? Are meetings constructive and, if not, how might the format be changed to enhance cooperation?
  • Do various dialogue mechanisms ensure participation of senior government officials of sufficient stature to rectify the problems discussed?
  • Does the management structure of the IPA include representatives from key government departments?

Some IPAs suggest that this practice can help build buy-in from those departments and assist when the IPA engages in advocacy within government.

 

Resources

See the investment promotion and facilitation resource library.

 

 

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