FDI, IPAs and SDGs
As the data shows, the pace at which the world is moving towards reaching the SDGs is not at the desired level if they are expected to be reached by 2030; therefore, global concerted efforts are required to find solutions. Foreign Direct Investment (FDI) can play significant role in this process, particularly the resulting capital flows into SDG-related projects. According to some experts, reaching the SDGs will require $4 trillion investments per year (UNCTAD, 2014). However, what is crucial is not just the quantity, but the quality of investments, i.e. sustainable investments. The sustainable investments which can be defined as “commercially viable investment that makes a maximum contribution to the economic, social and environmental development of host countries and takes place in the framework of fair governance mechanisms (Sauvant and Mann, 2017)” are a challenge but above all also an opportunity particularly for Investment Promotion Agencies (IPAs) as they are the entities usually mandated to promote and facilitate investments. Moreover, due to their essential role as intermediate between investors and governments, IPAs hold an important role in shaping a sustainable future. Thus, naturally, while this has to be a holistic governmental approach for attracting sustainable investments, as both investment facilitation instruments, i.e. laws and regulations as well as investment promotion activities need to be adjusted accordingly, overall there is a need to strengthen the role, mandate and function of IPAs to increase the chance to achieve the transformative vision of the SDGs.