FDI Trends: 2009–2011

Evidence that the EU-12 will continue to attract FDI, but at a lower rate, is provided by the annual United Nations Conference on Trade and Development’s (UNCTD) World Investments Prospects Survey (WIPS). Conducted between February and May, the WIPS is based on 241 responses and 20 interviews with executives at large, nonfinancial, transnational corporations.

As part of the WIPS, five developed regions, five developing regions and the category of “transition economies” were ranked 1 through 11 based on FDI preference. The new EU-12 moved down from fourth place in 2008 to fifth place in this year’s ranking. The four top-ranked regions were South, East and Southeast Asia; North America; the EU-15; and Latin America. Ranked by country, Poland was rated the 12th most attractive destination for FDI. The top five countries were China, US, India, Brazil and the Russian Federation.

Fifty-eight percent of executives surveyed expect to decrease their FDI this year. However, half expect their companies’ FDI to be higher in 2011 than in 2008. In 2011, nearly 48% of companies surveyed plan to make more than half of their R&D investments in foreign countries.

In a separate report, the UNCTD estimates that world FDI inflows declined 14.2% last year to $1,697 trillion. FDI inflows primarily consist of equity, reinvested earnings and other capital flows.

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