Global investment prospect for 2017 cautiously optimistic
UNCTAD described in its World Investment Report 2017 the investment prospects for 2017 with cautious optimism. It predicts a modest recovery for global investment. Global flows are expected to increase to $1.8 trillion in 2017, and $1.85 trillion in 2018. Due to geopolitical risks and policy uncertainty global flows are thus expected to remain still below their peak in 2007.
In general, Foreign Direct Investment (FDI) increased in developed countries. While in Europe FDI fell, it grew moderately in North America and increased in other developed countries. This made their global share in FDI inflow of developed countries grow to 59%.
“Despite global uncertainty we can trace these overall positive numbers for developed countries to three key determinants: economic stability, regulatory framework and effective investment facilitation.” WAIPA CEO, Bostjan Skalar pointed out about the report.
Contrary to that, last year’s global FDI inflows decreased by 2%. Generally, FDI flows lost momentum, particularly visible in developing countries. Asia saw its first decline in five years, there was a moderate slide in Africa, as well as FDI flows fell in Latin America and the Caribbean. Especially in structurally weak and vulnerable economies FDI remained fragile, the WIR2017 says, constituting to a general 14% decline in developing economies.
“This is why we have to particularly focus on capacity building of IPAs as lacking capacities makes it very difficult for many of the developing countries and almost all of the least developed countries to getting their share in the highly competitive FDI world market and contribute to reach the SDGs,” says Skalar.
Overall, the United States remained largest recipient of FDI, followed by the United Kingdom and China.
The role of Investment Promotion Agencies
Investment Promotion Agencies (IPAs) play an important role in attracting FDI. They are often the public face of governments seeking to increase investment, promote economic and social development and generally instrumental in negotiating investment treaties and concluding investment contracts. They also manage investment relationships through after care services.
Due to the investment gap to reach the United Nation’s Sustainable Development Goals (SDGs), there is a huge demand of investments. This creates a unique chance for investments to mobilize resources for the SDGs. This enhances the role of IPAs and investment promotion in general to contribute decisively in achieving these goals.
About UNCTAD and WAIPA
UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964. Its headquarters are located in Geneva, Switzerland, with offices in New York and Addis Ababa. UNCTAD is part of the UN Secretariat and reports to the UN General Assembly and the Economic and Social Council but has its own membership, leadership, and budget. The yearly published World Investment Report is UNCTADs flagship report and focuses on trends in foreign direct investment (FDI) worldwide, at the regional and country levels and emerging measures to improve its contribution to development. UNCTAD member of the is Consultative Committee of WAIPA.
The World Association of Investment Promotion Agencies (WAIPA) was created in 1995. It was established as an Association under Swiss law. It has been registered in Geneva, as a non-governmental organization. From its very inception, WAIPA has represented an ever-growing number of Member agencies. Currently WAIPA had 170 Members from 130 countries. As an active voice for IPAs around the world, WAIPA aims to bring together government officials, and representatives from the private sector and academia to contribute collectively and continuously towards a common FDI policy and strategy.
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To learn more about UNCTADs World Investment Report 2017 please download: http://unctad.org/en/PublicationsLibrary/wir2017_en.pdf