World Investment Report 2004

The Shift Towards Services

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The World Investment Report is recognized worldwide as an authoritative source of information and analysis on Foreign Direct Investment (FDI). It focuses on FDI trends at the regional and country levels and emerging measures to improve its contribution to development. This year's report examines the shift of FDI towards services with a focus on the entry of Transnational Corporations into new service areas. It provides a special analysis of offshoring service activities and of key issues relating to national and international policies.



National and international policies: A complex and dynamic interaction

Over the past decade, the number of international agreements covering FDI in services has increased substantially, both in number and geographical scope. They reflect the negotiating parties’ interests, bargaining power, technical capabilities, levels of liberalization and specific economic, social and other circumstances. The result is a multilayered and multifaceted network of international rules, with obligations differing in scope and content. Within the context of a broad liberalization trend, these agreements increasingly set the parameters for national policies on services through interaction between national and international policies on FDI in services. This interaction can either be led by autonomous liberalization or driven by IIAs. This complex and dynamic interaction poses challenges for development: while IIAs and autonomous liberalization create an enabling framework for FDI, the former also limit national policy space. This raises questions of how best to achieve development goals and how to strengthen the development dimension of IIAs.


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