News / Economy

Report: Global Foreign Direct Investment Falls by 18 Percent

UNCTAD Secretary-General Supachai Panitchpakdi (file photo).UNCTAD Secretary-General Supachai Panitchpakdi (file photo).
x
UNCTAD Secretary-General Supachai Panitchpakdi (file photo).
UNCTAD Secretary-General Supachai Panitchpakdi (file photo).
Lisa Schlein
A new United Nations Report finds global foreign direct investment -- or  investment of foreign assets into domestic structures, equipment, and organizations -- fell by 18 percent last year to $1.35 trillion.  But, the U.N. Conference on Trade and Development’s annual World Investment Report notes developing countries, for the first time ever, received the majority of investment.  

UNCTAD’s annual survey of investment trends finds global Foreign Direct Investment, or FDI, declined in 2012 to below the pre-economic crisis level.  It attributes this mainly to economic fragility and policy uncertainty for investors.  

The report says developing countries took the lead in attracting foreign direct investment in 2012.  For the first time ever, it says developing economies did better than developed countries, accounting for 52 percent of global FDI flows.  

UNCTAD Secretary-General Supachai Panitchpakdi says investment flows to developing economies fell drastically by 32 percent to $561 billion.  He says the world has not seen such a dramatic drop in the level of foreign investment in the last decade.  

“The good thing is that there are still developing economies around the world," said Panitchpakdi. "Africa, for example, still maintained their flows of FDIs including increasing the inflows into the continent.  LDCs as a group have been maintaining some gains, whereas the developing countries in Asia, Latin America and the Caribbean has been losing some of this momentum because they come from a high level, whereas in Africa and the LDCs would come from a much lower level.”   

The report says FDI inflows to least developed countries rose by 20 percent in 2012 to a record $26 billion.  It notes the growth was led by strong gains in Cambodia, the Democratic Republic of the Congo, Liberia, Mauritania, Mozambique and Uganda.

The report says FDI flows to African countries increased by five percent to $50 billion in 2012, mainly due to investment in extractive industries.  While natural resources are still the mainstay of FDI flows to Africa, the report notes consumer-oriented manufacturing and services are attracting more investments.

Developing economies in Asia remain the largest source of direct foreign investment, accounting for three-quarters of the developing country total.  According to the U.N. report, the top investor is China, which has moved up from sixth to third place, after the United States and Japan.

James Zhan, UNCTAD's Director of the Division on Investment and Enterprise, cites several factors contributing to the decline in foreign investment.   

“We have seen a kind of a rise of investment protectionism, the sentiment," he said. "We have also seen that countries are now putting more regulatory measures in screening and monitoring foreign investment.  And, countries are selective.  They are more selective than before in attracting foreign investment.  They are more and more linking the investment attraction, the investment facilitation with their industrial policies.”   

U.N. economists forecast 2013 FDI levels will remain close to 2012 levels of $1.45 trillion.  But, they say as macroeconomic conditions improve FDI flows may climb to $1.6 trillion in 2014 and $1.8 trillion in 2018.

You May Like

Israelis Quietly Expand Enclave in Palestinian District of Jerusalem

Estimated 500 settlers, armed or protected by paramilitary police, live in Silwan among 50,000 Palestinians More

Video US, Iran Face Similar Challenges in Syrian Fight Against IS

Both Washington, Tehran back fighters battling Islamic State militants in Iraq -- but in Syria they support opposing sides in country’s civil war More

China Boosts Efforts to Help Afghan, Regional Stability

Observers say China’s increased regional involvement are due to concerns that Afghan instability and the presence of anti-China militants in Pakistani border areas could fuel Xinjiang troubles More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7798
JPY
USD
106.41
GBP
USD
0.6203
CAD
USD
1.1242
INR
USD
61.430

Rates may not be current.