ICA integrates all functions for enhancing FDI
|• ||busine ss intelligence|
|• ||advisory services|
|• ||policy research|
The first step was to determine priority sectors for FDI. ICA then undertook investment promotion — in Germany and other EU countries. It also surveyed TNCs with offices in Moscow. The objective was to encourage interenterprise alliances with Russian partners in priority sectors for FDI.
During 1996–99, a number of assignments were completed in a number of industries including food processing, wood processing and furniture, building materials and interior components, automotive components, intermediary chemicals, printing equipment, leasing, healthcare and apparel. Special market entry and expansion concepts were designed for each industry. Market leaders in western Europe were then identified and approached with a proposal for transferring technology and knowhow. Each project was organized in phases (Figure 16.10). This systematic approach minimizes lead time and risk of error. The investor also has a more transparent view of the business environment and work practices in Russia.
The ICA experience can serve as a model for FDI advisory services in Russia. It has accumulated valuable know-how that could be transferred to other advisory organizations, including educational establishments in the major regions.
Advanced country governments may also promote big projects in recipient countries by subsidizing their domestic companies and lobbying abroad for them (e.g. France's winning of the contract for its rapid train TGV against the German ICE in South Korea in 1996).
In France, FDI in 1998 was expected to create almost 30 000 new jobs. Le Figaro, 'Ces investissements étrangers qui dopent les emplois hexagonaux' [Stimulating employment in the Hexagon through FDI], 26 April 1999.
California attracts most FDI projects among US states. If it were an independent country California would rank seventh in the world in terms of GDP (US$900 billion; population: 30 million). See Investing in California, issued by the California Trade and Investment Board, 1997.
The Moscow Times, 'Daewoo is Wooed by Ukraine', 20 September 1997, p. 7. However, following the financial crash of December 1997 in South Korea, it is not certain whether the investment can be geared up as planned.
The European Commission has threatened to close EU borders to cars manufactured under such conditions in the Ukraine.
The Moscow Times, 'China to Drill Kazakh Oil', 27 September 1997, p. 8.
'Country Report: France', in Managing 1997, p. 17.
Auslandskurier, 'standort ja, Marketing nein?' [Location yes, marketing no], February 1997, p. 10.
UNCTAD, World Investment Report 1997, p. 303.
'Country Report: Poland', in Managing 1997, p. 19.