Global Sustainable Development Goals: How a good investment climate is able to contribute to the 2030 Agenda

The Sustainable Development Goals (SDGs) cannot be achieved without the private sector. However, in order for companies - from micro businesses to multinational corporations - to invest and create jobs, it is also important that framework conditions are favourable. A recent economic analysis carried out by DEG examines what makes a good investment climate.

For the private sector to flourish it is crucial that states and governments ensure predictable policies and a stable legal framework. In this regard, the protection of property and land rights, enforceability of contracts and reduction of criminal activity are of vital importance for businesses.

Favourable framework conditions also include appropriate taxation, transparent regulations and effective competition. If these conditions are lacking, costs of doing business increase and private investments are hampered.

Furthermore, a sound infrastructure and well-functioning financial markets are necessary to connect companies with customers and suppliers, as well as with lenders and investors. Education and training are additional factors.

Public policies are thus needed in many fields of action and have a crucial impact on the investment climate, which is central to investment decisions made by companies worldwide.