UNCTAD-World Investment Report 2009: BRIC countries most favoured destination for FDI- Global FDI flows will shrink by 30% in 2009

September 18, 2009: According to the United Nations Conference on Trade and Development (UNCTAD)- World Investment Report 2009, Global FDI flows will shrink by 30 per cent in 2009 and recover only marginally during the next year.Globally, FDI inflows are expected to fall from about $1.7 trillion in 2008 to below $1.2 trillion in 2009.

Recovery is expected to be slow in 2010, reaching no more than $1.4 trillion, but gathering momentum in 2011 to approach $1.8 trillion," UNCTAD said.

The report said that a major contributing factor to the decline in global FDI flows has been growing divestments by transnationals worldwide.

Foreign direct investment (FDI) in India may erode sharply from the record $42 billion in 2008 with trans-national corporations (TNCs) going slow on expansion plans following the global financial meltdown,report said. According to UNCTAD's World Investment Report 2009, India is among the world's 15 largest FDI recipient in 2008.

However, the strong performance of China and India, even during the current crisis, has reshaped the landscape of FDI flows to the region as well as to the world at large, the report added.



According to UNCTAD's World Investment Prospects Survey 2009-11, India has slipped by one notch to third position as the most preferred foreign direct investment (FDI) country. However,"These two largest emerging economies (China and India) ranked numbers one and three, respectively, as the most preferred FDI locations," the survey had said.

According to Unctad secretary-general Supachai Panitchpakdi, “The BRIC countries (Brazil, Russia, India, China) are the most favoured destination for FDI. Not all trans-national corporations (TNCs) have been affected by the financial crisis, particularly those involved in food and agriculture. Others that have not been affected are those that put their targets on long-term prospects such as the pharma industry.”

The report stresses agricultural production and development as a means to development and food security for these countries, and as Mr Supachai said, “We believe that it is up to national governments to do their bit to revive their agricultural process as the World Investment Report 2009 tries to propose.”

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