São Paulo – Global foreign direct investment flows (FDI) declined by 16% in 2014 from 2013, to US$ 1.232 trillion, according to the World Investment Report released this Wednesday (24th) by the United Nations Conference on Trade and Development (Unctad), in Geneva, Switzerland. Developing countries saw stronger inflows than wealthy ones, but both Arab and South American nations experienced a slowdown in FDI. According to Unctad, in 2014, investment was weaker due to a frail global economy, political uncertainty, and geopolitical risks. <\/p>\n
The document claims China overtook the United States as the leading FDI target in 2014, followed by Hong Kong and the United States. Developing countries were targeted by US$ 681 billion, up 1.6% from 2013. Foreign investment in developed economies was down 28.4% to US$ 499 billion. The Unctad claims a divestment of Britain’s Vodafone from a stake in the US’ Verizon weighed down on wealthy countries’ results. <\/p>\n
FDI also declined in transition economies, which include Southern European countries like Romania, Bulgaria, Albania, Serbia, Moldova and the Commonwealth of Independent States (former Soviet Republics). Africa saw a US$ 54 billion influx, the same as in 2013.<\/p>\n
Unctad says half of the ten leading FDI targets last year are developing economies, and nine of the 20 leading FDI issuers also belong in this group. Brazil, China, Hong Kong, Russia and Singapore were the developing countries targeted by the weakest inflows. Chile, China, Hong Kong, Taiwan, Kuwait, Malaysia, South Korea, Russia and Singapore were the leading investors among emerging countries. <\/p>\n
Middle East <\/strong><\/p>\n “West Asia,” a region comprising Arab and non-Arab countries in the Middle East, remained on a downward curve as an FDI target last year, for the sixth straight year. In 2014, countries in the region saw US$ 43 billion in inflows, down 4% from 2013.<\/p>\n Turkey was the primary target, at US$ 12 billion, the same amount as in 2013; the United Arab Emirates also received the same amount in 2013 and 2014: US$ 10 billion. Saudi Arabia, Iraq, and Lebanon round out the list of five leading FDI targets in the region. Conversely, Kuwait, Qatar, Turkey, Saudi Arabia and the United Arab Emirates were the principal investors. <\/p>\n “This continuing decline stems from the succession of crises that have hit the region, starting with the impact of the global economic crisis, followed quickly by the eruption of political unrest that swept across the region and, in some countries, escalated into conflicts. This is deterring FDI not only in the countries directly affected − such as Iraq, the Syrian Arab Republic and Yemen − but also in neighboring countries and across the region,” the document reads. <\/p>\n Latin America <\/strong><\/p>\n After a four-year run of rising FDI, Latin America and the Caribbean saw a 14% decline in inflows in 2014, to a total of US$ 159 billion. Inflows declined the most in the Caribbean: 36%, to US$ 39 billion. In South America, FDI dropped by 4% to US$ 121 billion. Performance in the Caribbean suffered from a decline in the number of mergers and acquisitions in the region. In South America, the slowdown is connected with lower extraction industry investment stemming from plummeting commodity prices.<\/p>\n Brazil was the leading FDI target in Latin America and sixth in the world. Despite registering a 2% decline in inflows, the country received US$ 62 billion in 2014. Unctad asserts that in Brazil, FDI sank in the primary sector, but increased in areas such as manufacture and services. <\/p>\n The list of 20 leading FDI targets in 2014 is as follows: China, Hong Kong, United States, United Kingdom, Singapore, Brazil, Canada, Australia, India, Netherlands, Chile, Spain, Mexico, Indonesia, Switzerland, Russia, Finland, Colombia, France, and Poland. <\/p>\n *Translated by Gabriel Pomerancblum<\/strong><\/p>\n