By Chris Cochran
The U.S. government (USG) compiles enormous amounts of information each year, documenting the history and the health of the United States – statistics covering the economy, population, industrial production, mortality rates, and consumer demand among many other data points. This information is freely available and easily accessible if you’re patient, know where to look, and know how to extract the information you need.
Given that U.S. commercial interests converge with U.S. foreign policy interests, the USG also compiles significant information about the business and economic climates in other countries, with the goal of fostering and supporting US business investment and operation in markets of all sizes around the globe. Other multinational (i.e., quasi-governmental) organizations the USG belongs to are also active in data gathering and analysis and provide much of that information to public users.
Over the next few months, I’ll take look at some of the better-known USG and quasi-governmental information resources that offer robust details on the economic and investment landscape in markets around the world. In today’s blog post, I’m focusing on Investment Climate Statements from the U.S. Department of State.
What are Investment Climate Statements?
The statements are annual reports compiled by economic officers at U.S. embassies that look at market conditions in a given country. Right now, about 165 countries are included. The statements address everything from the financial sector to labor and climate issues, the regulatory environment and corruption. (See the list of contents below.) These statements also form a chapter in Country Commercial Guides from the Department of Commerce, which we’ll take a look at in a future blog post.
The publishing dates can vary year-to-year but are generally posted on the State Department’s website by the end of the USG’s fiscal year Q3 (June). The website also provides an almost 15-year archive of these statements, which gives an opportunity for reviewing changes and updates in the business environment or changes in State Department analysis over that timeframe.
What’s in an Investment Climate Statement?
The contents of the statements are uniform across geographies, although the depth and breadth of coverage within each section may vary depending on the country and the size of the economy. These are the sections you’ll find in each statement (I’ve added some annotations to highlight key info or when clarification might be warranted):
Executive Summary – good one-page or slightly longer overview suitable for a briefing book
- Openness To, and Restrictions Upon, Foreign Investment – includes links to relevant investment policy reviews from outside groups.
- Bilateral Investment and Taxation Treaties
- Legal Regime – focuses on laws and regulations pertaining to foreign investment, as well as how arbitration and dispute settlements are handled
- Industrial Policies
- Protection of Property Rights – looks at both “real” property and intellectual property
- Financial Sector – covers capital markets, banking, foreign exchange and remittances
- State-Owned Enterprises
- Responsible Business Conduct – includes corporate social responsibility and ESG issues
- Corruption
- Political and Security Environment
- Labor Policies and Practices
- U.S. International Development Finance Corporation (DFC) and Other Investment Insurance or Development Finance Programs [active in the country]
- Foreign Direct Investment Statistics
- Embassy Contact for more information – due to staff rotations, this information may have changed. You can do an internet search for “U.S. commercial officer in <city where embassy is located>” to get up-to-date information.
I’ve always been impressed by the work of economic and commercial officers at U.S. embassies for the effort they put into compiling, monitoring, and updating the information in these investment climate statements. What is made available on State’s website is public information. Additional information that may be gathered and deemed “confidential” or “secret” (or a higher classification) would obviously not be available here. But as a good overview of the business and investment climate in a given market, these are a great place to start.
An Inquiring Mind 