While working on the bill, Mr Obama’s advisers outlined a plan to increase inward FDI in the US by $1000bn over a five year-period, with a major chunk of new investments coming from emerging economies. This came with a call to change the country’s FDI promotion strategy, with Robert Hormats, undersecretary of state for economic affairs, claiming that the US needs to implement a more proactive approach in seeking new investors. Missouri, a state located in the US Midwest, also aims at increasing its visibility in regions which boast much stronger growth than the US. “In 2011, the state of Missouri established new offices in China, India and Brazil to expand both trade and investment opportunities.
We engage on a regular basis with the trade commissioners and other commissioners and government officials to build the profile of Missouri and to expand our business network,” says Dennis Pruitt, vice-president of international business recruitment at Missouri Partnership, a public-private corporation for regional development. Regardless of the fuss surrounding Mr Obama’s jobs bill, in the fourth quarter of 2011, leading state officials from all over the US were flocking to Asia. In October, Mr Hormats himself joined the six governor-strong mission to Beijing, led by Washington state’s Christine Gregoire, followed a month later by Northeast Indiana Regional Partnership representatives travelling to Taizhou in China and Virginia governor Bob McDonnell visiting Mumbai in India.
Small fries According to Mark O’Connell, CEO of foreign investment consultancy OCO Global, the main reason for that is businesses from BRIC countries are reluctant to fund expansion projects from scratch. “FDI from emerging markets is characterised by a small number of larger conglomerates often with government involvement, and can be quite political in nature,” says Mr O’Connell, who stresses that in the case of such conglomerates, mergers and acquisitions and equity investment are a more popular form of foreign activity. “The US needs to use its diaspora and alumni links in a much more proactive way to get engagement with decision makers and entrepreneurs from emerging markets,” says Mark O’Connell.