Global foreign direct investment (FDI) flows remained flat in 2003, at 653 billion US dollars, but are projected to rebound this year, said a report released by the United Nations Conference on Trade and Development (UNCTAD) on the eve of its 11th quadrennial session.
"The continuing low value and number of cross-border mergers and acquisitions --the key driver of global FDI flows since the late 1980s --contributed heavily to the downturn," UNCTAD said in the report.
In 2003, FDI flows to developed countries, including the United States, the European Union (EU) and Japan, increased slightly from 460 billion dollars in 2002 to 467 billion dollars, the UN-affiliated institution said.
However, it added that with global economic recovery gaining strength, the outlook for FDI inflows to developed countries in 2004 is "promising."
FDI flows to the Asia-Pacific region increased marginally to 99 billion dollars in 2003 from 95 billion dollars in 2002 due to a combination of strong domestic growth, the relocation of efficiency-seeking FDI to competitive locations in the region, higher global corporate spending and oil investment, the report said.
UNCTAD expects continuing good prospects for FDI inflows to the Asia-Pacific region in 2004, it added.
In Africa, FDI flows rose by nearly 30 percent to 14 billion dollars in 2003, up from 11 billion dollars in 2002, thanks to a number of large investment projects in natural resources and an improving policy environment with the unfolding of the New Partnership for Africa's Development (NEPAD), UNCTAD said.
Africa's prospects for FDI flows in 2004 are also "positive" because of the expected investment in the oil sector, it said.
UNCTAD said the Latin American-Caribbean region was "again the most negatively affected in the developing world, with FDI flows falling for the fourth consecutive year, from 56 billion dollars in 2002 to 42 billion dollars last year."
Concern over the economic and political situation in some Latin American nations, a slowdown in privatization and weak global economic factors were the key reasons behind the downturn, the report explained.
With the improving regional and global economic situation, the outlook for FDI flows to the Latin American-Caribbean region in 2004 is "favorable," although much will depend on the performance of Argentina and Brazil, it added.
As for the Central and Eastern Europe, the report said that after a record 2002 when inflows reached 29 billion dollars, FDI flows to the region in 2003 were just over 30 billion dollars, UNCTAD said.
Based on the variety of advantages the region has to offer --geographical proximity to the EU and access to EU markets, improving communications and transportation infrastructure, stability, labor skills and natural resources --FDI inflows to Central and Eastern Europe are expected to remain "strong" in 2004, it added.XINHUA NEWS AGENCY:
