Foreign direct investment recovery underway
Singapore, 23 July 2010 - A modest recovery in global foreign direct investment (FDI) flows was evident in the first half of 2010, with the rebound being most palpable in some APEC member economies.
Recent trends in FDI were discussed at the launch of UNCTAD's World Investment Report 2010 at the APEC Secretariat in Singapore today.
Philip Gaetjens, Director of the APEC Policy Support Unit provided an Asia-Pacific perspective and noted that, "In line with worldwide trends, FDI inflows and outflows for the APEC region fell in 2009. However, the stock of inward FDI still grew by 16 percent to US$7.2 trillion and the stock of outward FDI increased by 26 percent to just over US$8 trillion." FDI stock refers to the amount of investment already accumulated in a host economy or region, as opposed to the actual flows in a given year.
These outcomes, as well as information on Greenfield projects and mergers and acquisitions (M&As) in the APEC region, can be found in a summary report prepared by the Policy Support Unit.
UNCTAD's FDI forecasts were reported by Ambassador Muhamad Noor, Executive Director of the APEC Secretariat, who relayed that, "UNCTAD predicts a stronger rebound in 2011 and 2012 with global inflows forecast to reach between 1.3 and 1.5 trillion US dollars in 2011, and as much as 1.6 to 2 trillion US dollars in 2012." Ambassador Noor also noted that while UNCTAD expects all regions to experience recovery, developing and transition economies will remain favourable destinations for FDI.
APEC has long-placed a high priority on investment liberalisation and facilitation because of the critical role investment plays in stimulating economic development and trade.
In 1994, it developed the APEC Non-Binding Investment Principles to strengthen and enhance the transparency of investment regimes within APEC. In 2007, APEC also launched an Investment Facilitation Action Plan aimed at the promotion of investment in member economies.
APEC and UNCTAD have a history of partnering on investment-related initiatives. Under the APEC-UNCTAD Joint Capacity Building Project for Addressing Knowledge Gaps in the Use of Foreign Direct Investment, seven APEC economies have been selected as examples of best practices and case study reports have been completed in four areas, including electricity and roads. Reports on skill development and small and medium enterprises will be published shortly.
APEC and UNCTAD have also undertaken a joint study on the core elements of 100 international investment agreements. The study has been used as the basis for capacity building activities such as the APEC-UNCTAD Regional Training Course on the Core Elements of International Investment Agreements in the APEC Region held in Malaysia in June 2009, and a Workshop on Investor-State Dispute Settlement held in the Philippines in December 2009.
APEC's work on investment continues under the auspices of the Investment Experts' Group.