UN Report predicts global FDI to exceed $1.2 trillion in 2010

13:40, July 23, 2010      

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The United Nations Conference on Trade and Development (UNCATD) said on Thursday that global foreign direct investment (FDI) flows bottomed out in the later half 2009 and then achieved a modest recovery in the first half of this year.

UNCTAD launched the World Investment Report 2010 on Thursday at the UN-ECA here in Addis Ababa , Ethiopia .

The Report said the global FDI flows are expected to pick up to over 1.2 trillion U.S. dollars in 2010, rise further to over 1. 3 trillion dollars in 2011, and head towards more than 1.6 trillion dollars in 2012.

During his presentation on the World Investment Report 2010 entitled "Investing in A Low-Carbon Economy", Ralf Krueger, economic affairs Officer of UNCTAD, said FDI flows to and from developed countries contracted by more than 40 percent in 2009 to 566 billion dollars and 821 billion dollars respectively, following a similar decline in the previous year.

The report said participation by transnational corporations ( TNCs) and the strategic use of foreign investment can help developing and transition economies jump-start "low-carbon" economic development.

Although international climate-change negotiations are proceeding slowly, the main issues of concern for developing countries, finance and technology, can partly be addressed through better harnessing of TNC resources.

It added that governments can do this by adopting "clean" national investment promotion programs.

According to the Report, after almost a decade of uninterrupted growth, FDI flows to Africa declined by 19 percent in 2009 to 59 billion U.S. dollars.

The decrease is mainly due to a contraction of global demand for and prices of African export commodities.

Among the largest FDI recipients China rose to second place after the United States in 2009.

"TNCs from developing and transition economies have increasingly been investing in Africa over the past few years. They accounted for 22 percent of flows to the region over the 2005- 2008 periods, compared to 18 percent in 1995-1999.

Investors from China, Malaysia, India and the Gulf Cooperation Council (GCC) are among the most active "although Africa still makes up only a fraction of their FDI," said the Report.



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