Responsible Consumption and Production

Cotorras en los parques de Bruselas, Amsterdam o Londres; plantas silvestres que crecen en el asfalto; edificios industriales invadidos por murciélagos o rapaces: estudios recientes ponen de relieve la asombrosa capacidad de determinadas especies para adaptarse al medio ambiente ruidoso y densamente poblado que conforman las ciudades.

В прошлом году телепередачи стали для многих своего рода убежищем, позволив пережить изоляцию в разгар пандемии COVID-19. И это закономерно: наше медиапотребление отражает инстинктивное желание получить удовольствие и хотя бы на краткое время убежать от тревоги, скуки или одиночества.

En 1997 estuve investigando en Borneo los incendios incontrolados que devoraban desde hacía meses grandes extensiones de bosques tropicales vírgenes. Un intenso episodio del fenómeno climático El Niño había provocado una espantosa sequía y una espesa niebla amarillenta cubría gran parte de Indonesia, Malasia y algunas regiones vecinas.

Todas las islas tienen una edad geológica, una situación geográfica y un grado de aislamiento específicos. Esas características hace que sean únicas en su género y que alberguen ecosistemas con concentraciones de fauna y de flora inexistentes en otras partes del mundo. Por eso, algunas de sus especies vivas desarrollan características muy singulares, como gigantismo, enanismo o apterismo (incapacidad de volar).

Economic agglomeration and industrial clusters have always been part of industrialization and economic development. Since the 1960s, industrial hubs have proliferated in Asia, driven by policies to foster economic catch-up and structural transformation. Industrial hubs are relatively new to Africa but continue to attract attention from policymakers and researchers. However, empirical studies on African industrial hubs have been inadequate and, to date, have had only a limited influence on policymaking. Contrary to accepted wisdom, underperforming African industrial hubs offer an opportunity for policy learning from successes and failures. This paper aims to fill the existing knowledge gap from a policymaking perspective. It has three objectives: first, to demonstrate the diversity, the uneven and mixed outcomes, and the evolving nature of African industrial hubs; second, to provide insights and policymaking lessons through a comparative analysis of four diverse cases, namely those of Mauritius, the China-Africa economic and trade cooperation development zones, the Tanger Med Complex in Morocco and the recent experiment with industrial hubs in Ethiopia; third, to show that developing synergies to advance industrialization requires a strategic approach, integrating the state’s productive role and executive excellence within the broader industrial policy framework.

This paper investigates the role of global economic uncertainty in Dunning’s investment development path (IDP) framework. By applying the dynamic panel threshold model to data from 76 developed and developing countries, we find that countries’ net outward investment (NOI) follows a non-linear pattern even after incorporating global economic uncertainty into the analysis. At the same time, global economic uncertainty has non-linear effects on NOI subject to the level of economic development. More importantly, our results show that NOI is path dependent, with correlation coefficients changing across the different stages of IDP, which implies that uncertainty affects countries’ progression to the next stage of IDP differently. From a policy perspective, our findings call for special attention to policymakers in less developed nations. Even though global economic uncertainty may not always have a negative effect or may even improve a country’s NOI for a while, it may deter the international expansion of local firms. In the presence of high global economic uncertainty, local firms are less likely to become outward foreign direct investors, which implies stagnation in internationalization.

UNCTAD first published a list of the top 100 digital multinationals in the World Investment Report 2017. This research note builds on the analysis and conceptual framework on digitalization and foreign direct investment set out in that report. It provides an updated list, allowing for an analysis of trends over the five-year period including the COVID-19 pandemic and adds new features to the data set that will be exploited in forthcoming UNCTAD work. The note describes the methodology to create the new and extended data set and points at possible avenues for further work. The purpose of the research note is to provide academic scholars with the basic elements needed to pursue further research in this field.

This paper analyses the major features of the 2020 Ethiopian investment law and their policy implications. The law has liberalized many areas of the Ethiopian economy to pave the way for increasing the private sector’s share and diminishing the Government’s role. It adopted the negative list approach to liberalization to simplify the process of determining investment fields that are open for foreign investors. It laid out procedures for handling investors’ grievances and for resolving investor–State disputes, principally through domestic institutions. It also obliges investors to discharge their corporate social responsibilities. The paper argues that these features of the law demand transparent, efficient and competent government institutions to properly regulate and protect investments and to attain sustainable development as the ultimate goal of the law. For this purpose, it also argues that two factors are essential: ensuring effective institutional coordination and supplementing the mandatory corporate social responsibility requirements with voluntary engagement. In addition, it contends that the Government needs to strengthen linkages between foreign and domestic investment, promote decent jobs and sustainability, enhance human resources and infrastructure, and build a stable political system to reap the significant development benefits of investment, as envisaged in the investment law. The paper also suggests that other countries, in Africa and beyond, can benefit from applying these lessons in designing or reforming their investment policies to maximize the sustainable development gains from foreign investment.

This paper analyses the potential impact of the minimum tax envisaged under the OECD Pillar Two on several common corporate tax incentives. It reaches the conclusion that while the impact is expected to be low to moderate for some common incentives, such as participation exemption regimes and accelerated depreciations, it might be significant for direct cuts from the tax bill, which include tax holidays, intellectual property (IP) box regimes and special economic zones (SEZs). Hence, the response by policymakers must be informed by the specific interaction between the corporate tax incentives under their respective systems and the upcoming international standards on the minimum level of taxation.

The OECD agreement in principle on a global minimum corporate income tax – Pillar Two of the Base Erosion and Profit Shifting project – is a major step in international tax regulation and coordination. Yet, its consequences for foreign direct investment (FDI) have received limited attention thus far. In the present paper, the authors detail the analytical framework developed to underpin the findings of the World Investment Report 2022: International Tax Reforms and Sustainable Investment. The paper introduces the notion of FDI-level effective tax rate (ETR). Unlike standard ETRs, FDI-level ETRs embed the profit shifting schemes of multinational enterprises (MNEs). They capture not only the taxes paid on income reported in the host country of the foreign investment but also those levied on income shifted to offshore financial centres (OFCs). The effect of Pillar Two on these two components of the tax base determines the increase in the overall tax rate faced by MNEs, which ultimately affects the investment decisions of MNEs. After empirically calibrating ETRs, profit shifting and FDI-level ETRs of more than 200 countries, the authors quantify the effect of Pillar Two on FDI-level ETRs. The results show that after the reform FDI-level ETRs are likely to increase by 2 to 3 percentage points in non-OFCs, which corresponds to an increase in the corporate income tax liability for MNEs between 14 and 20 per cent.