São Paulo – The international flow of Foreign Direct Investment (FDI) totalled US$ 1.122 trillion in 2010, as against US$ 1.114 trillion in the previous year, according to a study disclosed on Monday (17) by the United Nations Conference on Trade and Development (Unctad). While the inflow into developed countries dropped 7%, there was 9.7% growth in the capital flow into developing nations.
The funds that entered emerging nations and transition economies – those of the former Soviet bloc – answered to over 50% of the global volume of FDI. According to the Unctad, there was a great return to investment in Latin America and emerging Asia.
In Latin America and the Caribbean, Brazil was the main destination for funds for the fourth year running, with inflow of US$ 30.2 billion, growth of 16.3% in comparison with 2009. The value, however, is still significantly lower than the record registered in 2008, of over US$ 45 billion.
The performance in Latin America, which received US$ 141.1 billion in total, was mainly boosted by mergers and acquisitions. The sectors with the greatest turnover were oil and gas, mining, food and beverages.
According to the Unctad, the interest in the region may be explained by the strong economic growth, the "robust" domestic and foreign demand, the good macroeconomic fundaments and the higher commodity prices.
In Asia, China had performance considered "emblematic" by the Unctad, with a flow of US$ 101 billion, 6.3% more than in 2009. It was the country that received the second highest volume of investment, after the United States, which posted inflow of US$ 186.1 billion, growth of 43.3% in the same comparison. The North American performance, according to the organisation, was the result of reinvestment of profits by companies with branches abroad.
There was reduced inflow of investment into the Middle East and North Africa. The flow of funds into Egypt, however, rose 1.7%, to US$ 6.8 billion. It was the greatest volume on the African continent.
For 2011, the Unctad hopes for a global FDI flow of US$ 1.3 trillion to US$ 1.5 trillion, still well below the US$ 2.1 trillion registered in 2007.
*Translated by Mark Ament
