Developing nations on top for first time in 2012 FDI index: UN

FDI

Developing countries overtook their traditionally wealthier counterparts in attracting foreign direct investment for the first time last year, as industrialised nations bore the brunt of an 18 per cent plunge in FDI flows, the UN's trade and investment think tank UNCTAD said today.

Last year, global foreign direct investments when a company in one country invests for instance in production facilities or buys a business in another country came in at USD 1.3 trillion, down from USD 1.6 trillion in 2011, UNCTAD's Global Investment Trend Monitor showed.

In a dramatic shift on the global investment scale, developing countries reaped USD 680 billion of that, or 52 per cent of the total.

"For the first time in history, developing countries have attracted more investment than developed countries," James Zhan, who head's UNCTAD's investment and enterprise division, told reporters in Geneva.

The shift was largely prompted by evaporating investments in crisis-hit developed economies like the United States, European nations and Japan, which accounted for 90 per cent of the USD 300 billion-decline in global FDI last year, Zahnsaid.

"We thought we were on the way to a steady recovery, (but) the recovery has derailed," added Zahn, who pointed out that global investment figures had turned upwards in 2010 and 2011. But amid growing market uncertainty, they fell last year to near the historic low of USD 1.2 trillion which came during the worst of the global financial crisis in 2009.

The US, which remains the world's largest recipient of foreign direct investment, saw its FDI inflows slip more than 35 per cent to USD 147 billion, while Germany saw its net investment level plunge from USD 40 billion in 2011 to just USD 1.3 billion last year, mainly due to large divestments there.

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