(New York, 5 September 2006) —World foreign direct investment (FDI) inflows in 2006 will reach some US$1.2trn, a 22% increase over the 2005 total of US$955bn, and the first time since 2000 that global FDI will have surpassed the US$1trn mark, according to World Investment Prospects to 2010: Boom or Backlash, released today. The report, published jointly by the Economist Intelligence Unit and The Columbia Program on International Investment (CPII), predicts that FDI flows will rise moderately through to the end of decade to US$1.4trn. However, it also cites a range of risks that could undermine this growth, and a backlash against FDI cannot be ruled out.
The report, which covers 82 countries, includes estimates of FDI flows in
2006, and also provides forecasts until 2010 for global and regional investment
trends. Highlights include a contribution by Jeffrey D. Sachs, Director of the
Earth Institute at Columbia University, on the policies that governments in
developing countries should adopt to attract more FDI to promote their economic
development as encapsulated in the United Nations´ Millennium Development Goals
(MDGs). Says Sachs: "Increased FDI inflows will be vital to success in meeting
the MDGs. FDI is needed to ensure the adequate job creation, capital
accumulation and export growth required to end extreme poverty." Active
investment promotion in particular is important.
Although FDI flows are expected to grow further, there are various indications that a number of developed countries (and increasingly also emerging markets) are re-evaluating the balance of costs and benefits of FDI. Warns Karl P. Sauvant, Executive Director of Columbia´s Program on International Investment: "It would be ironic if developed countries, which have led the liberalization drive in FDI policies during the past two decades, were to initiate a backlash against FDI.”
“We foresee neither boom nor backlash, but a period of constrained globalization. But there remain a range of potential risks—economic, political and geopolitical—which could undermine the globalization process, and with it FDI flows,” commented Robin Bew, Editorial Director for the Economist Intelligence Unit.
The full version of World Investment Prospects to 2010 is available
from http://www.store.eiu.com and is priced at £50/$95
Copies are available for members of the press from the PR contacts below.
FDI Trends Webcast: Visit www.eiu.com/world or www.cpii.columbia.edu for views and analysis from the authors of World Investment Prospects. Registration for the webcast will begin on September 1st. The webcast itself will begin at 11:00am EDT on September 5th.
Karl P. Sauvant, Office: 1 (212) 854-0689 or mobile:1-646-724-5600 or Karl.Sauvant@law.columbia.edu
About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of over 500 analysts, we continuously assess and forecast political, economic and business conditions in 195 countries. As the world’s leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information about the Economist Intelligence Unit can be found on the Web at www.eiu.com.
About the Columbia Program on International Investment
The Columbia Program on International Investment (CPII), headed by Karl P. Sauvant, is a joint undertaking of the Columbia Law School, under Dean David M. Schizer, and The Earth Institute at Columbia University, directed by Jeffrey D. Sachs. It seeks to be a leader on issues related to foreign direct investment (FDI) in the global economy. The CPII focuses on the analysis and teaching of the implications of FDI for public policy and international investment law. Its objectives are to analyze important topical policy-oriented issues related to FDI, develop and disseminate practical approaches and solutions, and provide students with a challenging learning environment. More information about the Program can be found on the Web at www.cpii.columbia.edu.