According to the United Nations Conference on Trade and Development (UNCTAD)’s “World Investment Report 2023(WIR 2023): Investing in Sustainable Energy for All”, Foreign Direct Investment(FDI) in Asia’s developing countries remained unchanged at USD 662 billion and India and Association of Southeast Asian Nations (ASEAN) were the top recipients , with an increase of 10% and 5% respectively.
Asia accounted for more than 50% of the global FDI.
- The FDI increase in developing countries was unevenly shared and much of the growth was concentrated in a few large emerging economies.
- India was among the five economies that accounted for almost 80 percent of the FDI flows to the region. The four other economies were China, Singapore, Hong Kong(China) and the United Arab Emirates(UAE).
- In South Asia, foreign direct investment (FDI) into India increased by 10 percent, reaching USD 49 billion. This rise in FDI made India the third-largest host country for greenfield project announcements, and the second-largest for international project finance deals.Singapore was the largest recipient of FDI in Southeast Asia region.
Key Points:
i.The 2023 report stated that the global flow of FDI declined by 12% to USD 1.3 trillion in 2022.
ii.The United States of America(USA) topped the list of top 20 host economies (FDI inflow) for 2022 with USD 285 billion. For the USA, FDI flow declined by 26% compared to 2021.
- In 2022, FDI flows to developed countries as a group fell by 37% largely in Europe and North America.
iii.China, the 2nd largest FDI recipient in the world, witnessed an increase of 5%.
iv.In the Gulf region, the FDI declined but the number of project announcements increased by two third.
v.The FDI inflow was stagnant in several developing countries and the FDI to the least developed countries (LDCs) also declined during the period.
vi.It is noted that FDI inflow in developing countries were comparatively higher than the FDI inflow in the developed economies.
Findings of the Report:
i.WIR 2023 revealed that the annual investment deficit is widening in the developing countries as they work to achieve the Sustainable Development Goals (SDGs) by 2030. The largest gaps are in energy, water and transport infrastructure.
- The gap is now about USD 4 trillion per year, increased from USD 2.5 trillion in 2015.
ii.WIR 2023 calls for urgent support to developing countries to enable them to attract significantly more investment for their transition to clean energy.
iii.The report also proposed a compact setting out priority actions, ranging from financing mechanisms to investment policies, to ensure sustainable energy for all.
About World Investment Report 2023
i.World Investment Report 2023 provides the latest trends in global foreign direct investment, greenfield investment projects, and international project finance.
ii.This report also includes a key review of investment needs at the midpoint of the 2030 Agenda for Sustainable Development.
The report features,
- Analysis of the trends in FDI during 2022, with especial emphasis on the development implications.
- Ranking of the largest transnational corporations in the world.
- In-depth analysis of a selected topic related to FDI.
- Policy analysis and recommendations.
- Statistical annex with data on FDI flows and stocks at the country level.
Recent Related News:
According to the State of World Population (SOWP) 2023 titled “8 Billion Lives, Infinite Possibilities: the case for Rights and Choices” published by the United Nations Population Fund (UNFPA), India overtakes China to become the most populous nation in the world, the population of India has grown by 1.56% in the past year and it is estimated to be 142.86 crore.
About United Nations Conference on Trade and Development (UNCTAD):
UNCTAD is an intergovernmental organization which promotes the interests of developing countries in world trade.
Secretary-General– Rebeca Grynspan
Headquarters– Geneva, Switzerland
