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

N. Korea Sentences American to 6 Years Hard Labor

Matthew Miller's brief trial Sunday comes two weeks after 24-year old Miller and two other American detainees appealed to the US government to help free them More

Pakistan Rejects Afghan Criticism of 480-kilometer Border Trench

Military spokesman tells VOA the project is part of administrative and security measures taken to secure the mountainous border with Afghanistan More

Photogallery Typhoon Kalmaegi Makes Landfall in Philippines

Storm makes landfall late Sunday, cutting power and communications lines and forcing people to flee to higher ground More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Scotland Independence Bid Stokes Global Interesti
X
Henry Ridgwell
September 12, 2014 8:35 PM
The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video Palestinians Turn to Rebuilding Gaza

After almost two months of conflict in Gaza, Palestinians are preparing to rebuild the isolated Mediterranean enclave with assistance from abroad. Meanwhile, an international human rights group has found that Israel likely violated international laws of war during some of its attacks on Gaza. Zlatica Hoke has more.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Middle Eastern Church Leaders Highlight Christians’ Plight

Patriarchs of Eastern Rite churches came to Washington this week to draw attention to the attacks against Christians in Syria, Iraq and elsewhere in the Middle East. VOA’s religion correspondent Jerome Socolovsky has more.
Video

Video Americans' Reaction Mixed on Obama Strategy for Islamic State Militants

President Barack Obama’s televised speech on how the United States plans to “degrade and destroy” the group known as the Islamic State reached a prime-time audience of millions. And it came as Americans appear more willing to embrace a bolder, tougher approach to foreign policy. VOA producer Katherine Gypson and reporter Jeff Seldin have this report from Washington.
Video

Video Authorities Allege LA Fashion Industry-Cartel Ties

U.S. officials say they have broken up crime rings that funneled tens of millions of dollars from Mexican drug cartels through fashion businesses in Los Angeles. Mike O'Sullivan reports that authorities announced nine arrests, as 1,000 law enforcement agents fanned out through the city on Wednesday.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7735
JPY
USD
107.03
GBP
USD
0.6155
CAD
USD
1.1011
INR
USD
60.954

Rates may not be current.