The United Nations agency for trade and development (UNCTAD) is blaming corporate scandals and last September's terrorist attacks for a drop in foreign direct investment around the world.
In a just released UNCTAD report called the World Investment Report for 2001, the agency says the drop in foreign investment was mainly felt by industrialized countries. The total figure for 2001 was $735 billion, about half what was invested in 2000.
But according to UNCTAD official Carlos Fortin, some countries in the developing world and in Central and Eastern Europe managed to fight the trend and actually reported larger investment.
"Among the top ten country gainers in terms of absolute increases, eight were developing countries, led by Mexico, China and South Africa," he said.
Surprisingly Angola witnessed the biggest inflow of investment among the least developed African countries. UNCTAD says despite Angola's decades-long civil war that only ended this year, the country has experienced a surge in investment in its lucrative oil industry, shooting up development prospects there.
UNCTAD's Fortin says while industrialized countries are still the top exporters, developing countries and economies in transition reap the greatest gains in world export market shares. He notes countries like Kenya and China have succeeded in boosting their exports with the aid of high levels of investment by transnational corporations.
"In the case of Kenya, for instance, there has been rapid growth in the export of flowers, which has made this country the leading flower supplier of the European Union, with foreign affiliates producing most of these exports," said Mr. Fortin.
The UNCTAD points out that the United States continues to attract the biggest amount of foreign investment despite the economic slowdown and last year's September 11 terrorist attacks. But it says that compared to its economic size, the United States and other industrialized countries could potentially attract more investment than they currently do.