DUBAI: The World Governments Summit (WGS) Organisation released a report in partnership with EY titled ‘Cultivating Confidence Towards Attracting and Retaining FDIs’, which highlights the key principles governments can adapt to stimulate their economic growth and financial health through attracting and retaining foreign direct investments (FDIs).
The report outlines the three key principles that shape the path toward successful privatisation: sound corporate governance; transparent and reliable financial reporting; and robust environmental, social, and governance (ESG) factors. These principles serve to enable and catalyse the development of a sustainable economy with solid foundations.
Firas Qoussous, EY MENA Government and Public Sector Leader, said, ‘In a world where global economies are increasingly interlinked, we have seen a common theme among governments that have successfully transformed their economies: privatisation. Governments need to reimagine their governance frameworks to ensure the sustainab
ility, agility, and resilience of their economies. The key is to find ways to cultivate sustainable environments that facilitate FDI while avoiding bottlenecks.’
Mohamed Al Sharhan, Managing Director of the World Governments Summit Organisation, said, ‘In today’s complex economic environment, governments must be more proactive in establishing new pathways to resilience against economic shocks. This includes actively sharing their experiences and models for attracting FDI at a time when investors are rethinking their priorities and placing a greater emphasis on ESG. This report is a useful tool in informing policymakers about these new frameworks.’
Previously, investors considered their return on investment (ROI) as the key factor during their decision-making process, giving it greater weight than other considerations. However, the traditional investor mindset is evolving to embed other factors.
The report also highlights the importance of Internal Controls Over Financial Reporting (ICFR) in achieving trans
parent and reliable financial reporting.
Hisham Dally, EY UAE Financial Accounting Advisory Services, Director, said, ‘Attracting FDI and nurturing economic growth and innovation hinges upon the establishment of robust regulatory frameworks that prioritise transparent and reliable financial reporting. This foundation underpins a trustworthy and credible financial environment, offering reassurance to investors who seek to expand their investment portfolio globally.’
Economic challenges underscore the need for governments and policymakers to enhance transparency, and the introduction of ICFR has revolutionised transparency standards.
The report also explores how governments and their regulatory bodies are driving the ESG agenda. The success of ESG initiatives relies on harmonious collaboration between governments, market players, and investors. Their collective endeavours create confidence and a magnetic pull for FDIs, with both institutional and individual investors attracted to nations that exhibit a deep
commitment to ESG tenets. The resulting investment inflow, in turn, has the power to boost national GDP and spur economic growth.
Through commitment to ESG principles, governments can expect significant ROI, and not only facilitate the privatisation process, but also create a favourable climate for sustained FDIs, leading to long-term economic value creation.
More than 4,000 participants from the public and private sectors participates in 110 interactive sessions at WGS 2024, including 200 speakers from 80 international, regional, and intergovernmental organisations including the UN, the World Bank, the International Monetary Fund, the World Health Organisation, the International Atomic Energy Agency and the Arab League. It also welcomes eight Nobel prize winners and provide a platform for 23 ministerial meetings in the presence of more than 300 ministers. In partnership with a select group of knowledge partners, the Summit is set to launch more than 25 strategic reports, focusing on the most important prac
tices and trends in vital sectors.
Source: Emirates News Agency
