The report, published jointly by the Economist Intelligence Unit and The Columbia Program on International Investment, predicts that FDI flows will rise moderately through to the end of the decade to $1400bn. However, it also cites a range of risks that could undermine this growth, and a backlash against FDI cannot be ruled out.

The report, which covers 82 countries, includes estimates of FDI flows in 2006, and also provides forecasts until 2010 for global and regional investment trends.

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In the report, Jeffrey D Sachs, director of the Earth Institute at Columbia University, suggests policies that governments in developing countries should adopt to attract more FDI to promote their economic development as encapsulated in the United Nations Millennium Development Goals (MDGs).

“Increased FDI inflows will be vital to success in meeting the MDGs. FDI is needed to ensure the adequate job creation, capital accumulation and export growth required to end extreme poverty,” he said.