Competitive Alternatives, the KPMG study of location costs, reveals that Canada is the lowest cost destination for business. Australia is placed second. Both locations’ operating business costs are 8-9% less than those in the US.

New partner for FDI Xchange

World Free Zone Convention (WFZC) has signed a partnership agreement with the Multilateral Investment Guarantee Agency, based at the World Bank in Washington DC, US.

Vopak-Horizon Fujairah (VHF) – a flagship joint venture between Holland’s VOPAK and Horizon Terminals, a wholly-owned subsidiary of Emirates National Oil Company – has struck a joint venture with Egypt’s Sokhna Bunkering Company (SBC), with the aim of building a bulk liquids terminal at Sokhna Port, 40km south of Suez.

New zone in Mongolia

In accordance with the Law on Free Zones and the Law on the Legal Status of the Zamyn-Uud Free Economic Zone (FEZ), the government of Mongolia recently called for tender proposals from investors by open international tender. The project is the establishment, development and management of a free zone in this town in southern Mongolia.

Multinational companies have to respond to global market changes in an instant and to do so they need the right information. Developing countries that cannot supply this data will lose out on FDI says Professor Peter Buckley, director of Leeds University Business School.

The definition of trade has changed radically from being simply a transfer of goods. Now, it represents other less well-defined dimensions such as services and investments as well, says economist Glen Hodgson.

As the call centre exodus from Europe and the US to India continues apace, one Indian company is going against the flow and expanding in Northern Ireland.

China is fast becoming a competitor with India for technological development. Louise do Rosario reports on the global players entering the Chinese R&D market.

At first glance, Bayer’s Shanghai R&D lab looks like an art museum. Lit up at night, it is visible for miles. During daytime, its semi-transparent exterior brings abundant light and air to the vast space inside.

North Dakota’s governor, John Hoeven, is promoting his state in the US and beyond with ground-breaking programmes and smart incentives, reports Karen E. Thuermer.

North Dakota is widely associated with the American explorers Lewis and Clark, who charted the North American West. Today, this land of vast, beautiful plains embarks on further exploration as Governor John Hoeven sets out to bring further economic development and jobs to this largely unknown state.

Carlos Magarińos, director general of UNIDO, outlines his hopes for development of productivity investment.

Growing productivity is the engine of development. Productivity, in turn, is primarily driven by technological upgrading and diffusion. This area of emphasis is, therefore, at the core of the United Nations Industrial Development Organization’s (UNIDO) corporate strategy.

Outsourcing to India may be causing a political furore in the US but turning the clock back on globalisation would be undesirable and almost impossible. Martin McGuinn, CEO of Mellon Financial Corporation, talks to Brian Caplen.

Indian outsourcers can rest easy about the future of their business, if the remarks of Mellon Financial Corporation’s chairman and CEO Martin G McGuinn are anything to go by. He dismisses the political machinations in the US as mostly rhetoric that even members of Congress realise is unworkable in law.

Too often, IPAs expend all their efforts on attracting new investors, and then forget about them. Now the advantages of aftercare are starting to be realised. Ashleigh Lezard reports.

Germany’s Trienekens GmbH involvement in Bizkaia began in 1994, when it took a stake in Basque paper recycling company. The E1.6m facility was designed to recycle paper and cardboard waste, as well as perform other waste management functions.

In 1996, Irish electricity company ESB was looking for opportunities to expand its operations in Europe. “Spain’s legal framework confirmed that we could develop industrial projects to parties in that country’s wholesale power market,” says Philip Clarke, project development manager of Bizkaia Energía, a wholly-owned subsidiary of ESB that was set up to build a 800 megawatt natural gas combined cycle power plant in the Basque Country, which is located on an eight hectare site, 2.5km west of the town of Amorebieta. The project is valued at about E500m.

The regional government’s ambitious plan focusing on science and technology plus Bizkaia’s infrastructure projects are raising the province’s profile as an investment destination.

The construction of the Guggenheim Museum was just one of a succession of developments that have put Bizkaia firmly on the map as a facilitator of industrial development. Jules Stewart reports.

Canada has a dilemma. On the one hand, it is highly dependent on US trade. On the other, the US dollar is weak, and Canada is looking to Europe for new trade. Ashleigh Lezard reports.

Pharmaceutical firms are reaping the benefits of manufacturing in Puerto Rico. Karen E Thuermer talks to one such company about their expansion plans.

Arizona’s ambitious investment in the bioscience sector are set to make it an industry-leading leading location. Jami McFerren explains why companies are flocking to the state.

The biotech industry relies on cutting-edge medical and technological research. With the help of universities like WVU (pictured), West Virginia is throwing off its mantle as an old-world industrial centre and jumping into the biotech fray. Karen E. Thuermer reports.

Biotechnology is one of the most research-intensive and costly industries in the world – and it is growing. Although cost-considerations are key, Karen E Thuermer finds that universities are a major focus for industry clusters.

Bahrain is bidding to become the gateway between East and West. To do so the island must expand its infrastructure to attract more foreign companies and investment. Brian Caplen looks at the Bahrain Financial Harbour project.

Motorola’s strategy may be global but the small city-state of Singapore remains the base for its operations. Simon Montlake discovers why.

Teo Ming Kian is the chairman of Singapore’s Economic Development Board, which has been a catalyst for the city-state’s remarkable transformation in recent decades. He spoke to fDi about the outlook for foreign investment and how Singapore is repositioning itself as a knowledge-based economic hub in Asia.

With its free trade agreements, its Asian-gateway status and, not least, its own FDI initiatives, Singapore has a lot to offer investors. Simon Montlake reports.

The challenge in FDI is to overcome tough odds and all our Personality of the Year 2004 winners have done or are doing just that. Brazil has a history of volatility that makes investors think twice, but President Lula is doing his best to present them with a positive image. Singapore’s entire history is one of winning in difficult circumstances, turning an island with few resources into an international business hub. This year’s runner up, Brigadier General George Yeo, Minister of Trade and Industry, has worked tirelessly at making Singapore’s trade relations keep pace with international developments. The awards will be presented at the IPA World Forum in Brussels on May 13.

The Saudi Arabian General Investment Authority (SAGIA) has appointed, Amr Dabbagh, a prominent Jeddah businessman, as its new chairman.

Paul Wookey’s strategy at Locate in Kent is bold and to the point. “We have changed our focus on marketing and put our main efforts into the UK and Europe rather than North America and Asia,” he says.

Renee Webb, minister of tourism, telecommunications and e-commerce for Bermuda, reflects the resilience of her country. As the first female minister of tourism in Bermuda and one of the first ministers in the world with an e-commerce portfolio, she has attracted $300m of new hotel investment to the island and has gone about creating the regulations and infrastructure conducive to attract high-end business outsourcing.

The Japanese M&A boom awaits high-speed systemic reform, says Gregory Puff.

Q Has there been a boom in M&A transactions in Japan?

A Since the “bubble” era in Japan in the late 1980s, practitioners and commentators have consistently predicted an M&A boom in Japan. To date, that has not been the case, due, in large part, to structural impediments. However, these are slowly changing. And if history is a guide, the practitioners and commentators may yet be proven correct.

Corporate real estate has emerged as the second or third largest cost to a corporation. Nevertheless, many corporations lack a well-balanced long-term real estate strategy and do not acknowledge the full cost-saving potential that exists within their ‘bricks and mortar’.

The automobile sector is one of the few remaining sectors that continues to produce “mega projects”, those high employment/high capital expenditure investments that represent the ultimate prize in economic development and can transform the fortunes of a region.

An extra-terrestrial visitor to the annual BIO industry exhibition might be fooled into thinking that the event is about inward investment – such is the number of economic development agencies (EDAs) attending! Yet the reality is that the number of cross-border direct investment projects in the medtech arena is relatively small (only 512 in 2003) – and the vast majority of these are in the medical devices and pharmaceutical sectors. The primary expansion mode for biotech is through joint ventures, acquisitions and (especially) partnerships (JVAPs) – the new buzz words for the 21st century FDI practitioner.

UK Chancellor Gordon Brown has launched a consultation document on a 10-year investment strategy for science and engineering in the UK. The chancellor has declared his ambition to make the UK one of the world’s most attractive and competitive locations for science, research and development (R&D) and innovation. Government spending on science is expected to reach £3bn by 2005/6 with this strategy possibly leading to more funding.

World FDI flows experienced their greatest decline in history in 2001 and 2002, from $1400bn in 2000 to $650bn at the end of 2002. The decline was concentrated in developed countries (22%), mostly on account of a collapse of cross-border M&A activity that had reached its peak in 2000. But developing countries also received less FDI (23%). As a result, the world market for FDI has become more competitive.

Political observers call the run-up to the US national elections “the silly season”, and for obvious reasons. There is a strong history of exaggeration, obfuscation and “tales…full of sound and fury”. However, in this particular season, one of the issues being raised may directly affect both underlying attitudes and the resulting policies related to globalisation and FDI – into and out of the US. The danger is that we could reach a “tipping point” in which anecdotal tales become accepted truths.

In an effort to woo new foreign investors, the Japanese prime minister, Junichiro Koizumi, has recorded a series of television commercials inviting viewers to invest in Japan.

Iraqi Kurdistan is looking for foreign investors. The region has built up a significant degree of autonomy and the Kurdistan Regional Government (KRG) is keen to open up the geographically isolated territory.

Indonesia has issued a regulation that repeals a law banning mining projects in protected national forests. In a decree, President Megawati Sukarnoputri declared that mining contracts signed for areas that were later designated as protected will be allowed to proceed, despite a 1999 forestry law.

IPAs beware!
Along with global manufacturing and IT sourcing, R&D looks set to emigrate to Asia as China throws its hat into the ring.

fDi flows may be recovering but European investment promotion agencies are not going to find the coming year any easier than the previous one. No part of the FDI pie, it seems, is sacred. Just as they had accepted that low-level manufacturing was lost to China, and certain parts along the IT sourcing spectrum were definitely moving to India, so they then discover to their horror that China is now firmly in the market for R&D investment (see page 70).