Table of Contents
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?
- Global Environment Outlook
- State of World Population
- World Energy Outlook
- Human Development Report
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