According to a survey from the United Nations Conference on Trade and Development (Unctad), the 20 richest nations, which accounted for about two-thirds of global FDI between 2007 and 2009, have seen their inflows and outflows decline by 37% and 22%, respectively, in the first quarter of 2009, when compared to the last quarter of 2008. Unctad’s FDI figures include mergers and acquisitions and other types of investment in addition to straight greenfield data.
Even though the financial system shows some signs of recovery, FDI inflows for the G-20 in the first half of 2009 were still roughly 40% below 2008 levels.
The survey points out that policies are needed in order to maximise the potential of foreign investment to achieve a sustainable global recovery. A favourable investment climate, a coherence between the global financial system and the international investment regime, and the fact that current endeavours against investment protectionism do not remain one-off initiatives, are chief concerns.
The findings are included in Unctad’s World Investment Report: Transnational Corporations, Agricultural Production and Development, which was released in September. The report estimates that FDI inflows will fall from about $1700bn in 2008 to less than $1200bn in 2009. Recovery is expected to be slow in 2010, reaching no more than $1400bn, but gathering momentum in 2011 to approach $1800bn.