São Paulo – Investment of developing nations in poor countries has tripled over the last ten years, according to a report disclosed on Thursday (17) by the United Nations Conference on Trade and Development (Unctad). According to report "The Least Developed Countries" (LDC), the foreign direct investment (FDI) of developing nations in these countries totalled US$ 40 billion in 2000, and climbed to US$ 140 billion in 2009, after reaching US$ 150 billion in 2008.
According to the study, China and India, among the developing nations, are those that invest most in the poor. Brazil, Russia, Turkey and South Africa started increasing their presence in these countries. Participation of developed economies in these nations is still high, but has not been growing as much as that of developing nations.
Apart from investing in the poor, the study recognises that India, China and Brazil have reduced poverty within their territories and the programs implemented in these countries may serve as examples to reduce poverty in the 48 LDC nations identified in the United Nations’ (UN) agency’s study.
To the secretary general at the Unctad, Supachai Panitchpakdi, not even the economic crisis may affect investment in poor nations. “We can see that the south-south FDI has more than tripled in the last decade and has now reached the level of shares of 14 per cent of the global FDI south-south flow. And in terms of the consequences from the financial crisis, these south-south flows have greater potential because these are all growing economies with huge reserves, with huge capital now available so they can just grow.”
According to the report, the need for improvement in the supplying of basic services to the population may result in attraction of foreign investment. Unctad shows that poverty has dropped in other regions of the world that use economic growth to develop. This is the case with China and India, nations that had 61% of the world’s impoverished population in the 1990s, the figure dropped to 42% in 2007. Other developing nations had small growth in the extremely poor populations: from 21% to 22% in the period. Among the less developed nations, the extremely poor were 18% in 1990 and climbed to 36% in 2007.
Of the 48 LDC nations, 33 are in Africa, one in Central America and 14 in Asia. Among the LDC Arab countries are the Comoros, Djibouti, Mauritania, Somalia, Sudan and Yemen. According to the Unctad, LCD nations had average growth of 7.1% in Gross Domestic Product (GDP) up to 2008, the year of outbreak of the international economic crisis. In 2009, some countries grew on average 4.7% and, in 2010, 5.7%. The International Monetary Fund (IMF) shows that these nations should grow 5.8% a year from 2009 to 2016.
*Translated by Mark Ament
