JEDDAH: G20 investment measures found that the G20 countries have honored their commitment to resist protectionism, the joint UNCTAD-OECD report issued ahead of the forthcoming G20 Summit in Seoul on Nov.11-12 said. However, it also urged the group to remain vigilant in light of intensifying protectionist pressures. The report also called on G20 leaders to be mindful of the risk for open investment posed by macro-economic imbalances, and welcomed G20 leaders' decision to renew for a further three years their commitment to refrain from raising or imposing new barriers to trade and investment. The copy of the report sent to the Saudi Gazette indicated that foreign direct investment (FDI) flows to G20 countries declined sharply by 36 percent in the second quarter of 2010 (or by 14 percent when compared to the second quarter in 2009), and when new risk factors, such as competitive devaluations, are emerging. As a result, G20 and global FDI flows for 2010 as a whole could remain stagnant, rendering a new global FDI boom a distant prospect. “This is a matter of serious concern, since public investment is running out of steam, while private investment in the form of FDI does not appear to be ready to step up to the plate to sustain global economic growth.” The UNCTAD-OECD report showed that during the reporting period, G20 countries have largely continued resisting protectionist pressures. The majority of new investment measures was aimed at facilitating and encouraging investment flows. The new report confirmed the findings of earlier joint reports on G20 trade and investment policies. This compares with the global picture, where the incidence of liberalization measures is less pronounced and where restrictive measures have accumulated over time. UNCTAD's most recent Monitor found an ongoing trend toward more investment liberalization, facilitation and promotion, while also strengthening the role of the state. Finding the right balance between more regulation and investment promotion remains a challenge, it noted. Some of the investment-specific measures undertaken during the crisis were steps toward eliminating restrictions and improving clarity for investors, but some caused restrictions to increase. Emergency measures continue to be the most frequent ones but, more than two years after the financial crisis struck, G20 countries have almost stopped introducing new emergency schemes, and no case of overt discrimination against foreign investors was recorded. At the same time, the report highlighted grounds for concern that support policies are becoming an entrenched feature of some countries' policy landscapes. With the conclusion of nine international investment agreements (IIAs), G20 countries further enhanced the openness and predictability of their policy frameworks governing investment. The agreements concluded during the reporting period included six bilateral investment treaties and three other agreements with investment provisions. Foreign exchange rate topics will be discussed at the G20 summit next week in Seoul, senior German government officials said Friday, announcing at the same time that Germany will repeat its criticism of US monetary policy at the summit. “Yes, there will be a discussion of foreign exchange rates at the G20 summit,” a German finance ministry source explained. German Chancellor Angela Merkel will also address the effect that the Federal Reserve's loose monetary policy has on the dollar, the government source explained. Finance Minister Wolfgang Schaeuble attacked the Fed for its new round of quantitative easing (QE2), arguing it has the same effect on the dollar as the Chinese government's currency policy has on the yuan. And Schaeuble will repeat his criticism of US monetary policies at the G20 summit, the finance ministry official reiterated. “At the moment, from a European viewpoint, one could get the impression that the US is doing through other means what it is reproaching China for,” Schaeuble said at a conference in Berlin. “One could get the idea that the instruments are different but the goal is the same, and the one who suffers are clearly...to a certain degree the Europeans,” the minister argued. The greenback was boosted Friday afternoon by stronger-than-expected US October non-farm payroll data. Labor Department reported a surprising 151,000 nonfarm jobs were added in October, while the jobless rate as expected remained unchanged at 9.6 percent for the third month in a row.
