Global FDI Fell By 42%, India Rise By 13%- UN Report – Free PDF Download

What has happened?

• An ‘investment trends monitor’ issued by the United Nations Conference on Trade and Development (UNCTAD) said that Global FDI collapsed in 2020 by 42% to an estimated $859 billion from $1.5 trillion in 2019.
• Such a low level was last seen in the 1990s and is more than 30% below the investment trough that followed the 2008-2009 global financial crisis.

• It was established in as a permanent intergovernmental body.
• UNCTAD is the part of the United Nations Secretariat dealing with trade, investment, and development issues.
• The organization’s goals are to: “maximize the trade, investment and development opportunities of developing countries and Assist them in their efforts to integrate into the world economy on an equitable basis“.

Developed countries hardest hit

• According to the report, the decline in FDI was concentrated in developed countries, where flows plummeted by 69% to an estimated $229 billion.
• The United States recorded a 49% drop in FDI, falling to an estimated $134 billion.
• On the other side of the Atlantic Ocean, investment to Europe dried up.

Developing economies

• Although FDI flows to developing economies decreased by 12% to an estimated $616 billion, they accounted for 72% of global FDI – the highest share on record.
• The fall was highly uneven across developing regions: –37% in Latin America and the Caribbean, -18% in Africa and -4% in developing countries in Asia.

China & India

• China was the world’s largest FDI recipient, with flows to the Asian giant rising by 4% to $163 billion.
• High-tech industries saw an increase of 11% in 2020, and cross-border M&As rose by 54%, mostly in ICT and pharmaceutical industries.
• India, another major emerging economy, also recorded positive growth (13%) to $57 billion, boosted by investments in the digital sector.
• India and Turkey are attracting record numbers of deals in IT consulting and digital sectors, including e-commerce platforms, data processing services and digital payments.

Conclusion

• Despite projections for the global economy to recover in 2021 – albeit hesitant and uneven,
• UNCTAD expects FDI flows to remain weak due to uncertainty over the evolution of the COVID-19 pandemic.
• The organization had projected a 5-10% FDI slide in 2021 in last year’s World Investment Report.

Q) Which among the following report is not released by United Nations agencies?

1. Global Environment Outlook
2. State of World Population
3. World Energy Outlook
4. Human Development Report

Latest Burning Issues | Free PDF

Sharing is caring!