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STUDY: UNCTAD releases its World Investment Report 2010

Global Foreign Direct Investment (FDI) steeply declined in 2009: -37% according to UNCTAD just-released report. MED countries attracted 42.1 billion dollars (i.e. 30.2 billion €) in 2009, against 64.2 in 2008, which represents a 32% decrease.

The report, released on 22 July 2010, assesses global trends of foreign direct investment (FDI) with a focus on “investing in a low-carbon economy”.

UNCTAD (United Nations Conference on Trade and Development) registers a steep decline of global FDI in 2009: 1114 billion dollars against 1771 billion in 2008 i.e. a 37% drop, after a 16% decrease in 2008. FDI flows however began to bottom out during the second semester 2009, and showed a modest recovery in the first half of 2010. UNCTAD foresees a stronger rise in 2011 and 2012:

MED countries attracted 42.1 billion dollars (i.e. 30.2 billion €) in 2009, against 64.2 in 2008, which represents a 32% decrease. The share of MED countries in global FDI is just below the 3% threshold:

Source: UNCTAD, ANIMA

The data of the ANIMA MIPO Observatory , which registers announcements of FDI projects in MED countries , is well correlated with UNCTAD data, which monitors FDI actual inflows:

Source: UNCTAD, ANIMA

As for geographical trends, UNCTAD underlines a new fact for 2009: developing and transition economies now absorb half of FDI. The share of their outward investment remains much smaller, but it is accelerating and reaching a quarter of global outflows in 2009. UNCTAD identifies new sources of FDI for African countries: transnational corporations (TNC) from developing countries, but also intra-regional FDI, which also increases. Morocco and Tunisia sent respectively 55 and 84% of their FDI outflows to North African countries in 2009.

The last chapter of the report is devoted to the “leveraging of foreign investment for a low-carbon economy”. Several recommendations for both FDI source and receiving countries are drawn:
- Strategizing national clean investment promotion: integrating investment policies, climate change regulatory frameworks and sustainable development strategies, incorporating guiding principles on TNCs and foreign investment into climate regime policies,
- Building an effective interface for low-carbon technology dissemination,
- Synergizing International Investment Agreements and climate change policies,
- Harmonizing corporate GHG emissions disclosure. TNCs play a central role: they are both major carbon emitters and low-carbon investors which “are in a prime position to generate and disseminate technology and to finance investments to mitigate GHG emissions”,
- Set up a Low-Carbon Technical Assistance Centre.

Read UNCTAD’s World Investment Report 2010