ILO Joins World Investment for Development Alliance (WIDA)

In June 2023, the International Labour Organization (ILO) joined the World Investment for Development Alliance (WIDA), a network of organizations from the investment-for-development community launched at the World Economic Forum (WEF) in May 2022.

News | 28 July 2023
In June 2023, ILO became a member of the World Investment for Development Alliance (WIDA). Launched at the World Economic Forum (WEF) in May 2022, WIDA's main objective is to promote sustainable and inclusive investment through an open and structured network of organizations drawn from the investment-for-development community. Other member organisations include the International Trade Centre (ITC), the Organization for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD), the World Association of Investment Promotion Agencies (WAIPA), the World Bank Group (WBG), the UN Industrial Development Organization (UNIDO), United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP), the African Union, the International Institute for Sustainable Development (IISD), the Academy of International Business (AIB), and the WEF.

WIDA: Collective response to urgent issues made manifest during COVID-19

During the 2021 World Investment Forum, urgent calls were made to increase foreign investment flows in support of the Sustainable Development Goals (SDGs) and to better leverage efforts of many intergovernmental organizations, business entities, academic initiatives and civil society group to support international investment and its sustainable development outcomes through enabling frameworks.

By bringing together various partners, WIDA aims to enable the steady flows of sustainable foreign investment to support the resilient and quality economic recovery of developing countries and Least Developed Countries (LDCs). The outbreak of the Covid-19 pandemic severely disrupted trade and fragmented global value chains (GVCs), resulting in a steep decline in FDI flows from $1.5 trillion in 2019 to approximately $1 trillion in 2020 – the first time since 2005. Although there was some recovery in 2021, FDI trends in 2022 remained below pre-pandemic levels, with an overall inflow of $ 1.3 trillion due to prevailing global political, economic, and supply chain crises.

Besides contributing to growth and prosperity in the host countries, an efficient flow of quality investments plays a key role in bridging the funding gap required to achieve the Sustainable Development Goals (SDGs). The gap has significantly increased post-Covid, from $2.5 trillion in 2015 to over $4 trillion in 2022. WIDA represents a collective effort of international developmental organisations to address urgent issues within the sustainable investment promotion regime.

ILO’s Work on Investment for Development

Since 2016, ILO has been actively supporting investment promotion for decent work based on the provisions outlined in the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (MNE Declaration). The primary focus is supporting Investment Promotion Agencies (IPAs) which play a pivotal role in attracting high-quality investments. ILO collaborates with the World Association of Investment Promotion Agencies (WAIPA), the umbrella agency of IPAs, to better equip national investment promotion agencies to be facilitators for sustainable development and inclusive economic growth. ILO and WAIPA have designed and conducted joint capacity-building programs, including through a platform for facilitating dialogue and knowledge-sharing among IPAs, in collaboration with UNCTAD, UNIDO and OECD. With funding from the Enhanced Integrated Framework of the World Trade Organization, training sessions have been tailored specifically for IPAs in the LDCs to address their unique challenges and circumstances in attracting high-quality FDI.

In 2022 ILO and WAIPA undertook a joint survey of IPAs focused on inclusive economic growth and decent work. 88% of respondents indicated that SDG8 on inclusive economic growth and decent work is becoming increasingly important in shaping their investment promotion and facilitation activities. Based on IPAs' feedback from this survey, ILO is currently developing a user-friendly tool that IPAs can use to assess the sustainability impact of investments, especially the impact of FDI for more and better jobs, thereby accelerating sustainable development and improved decent work opportunities in host countries.

With its unique mandate of promoting decent work to advance social justice, and its well-established experience in supporting IPAs to attract sustainable investments, ILO is confident that joining forces with other WIDA members will generate further synergies that positively shape the overall sustainable investment landscape and lead to more and better jobs.