Global FDI declines by 16 per cent in 2014

Global Foreign Direct Investment (FDI) fell by 16 per cent to $1.23 trillion in 2014, according to the UNCTAD World Investment Report 2015.
The report, released in Geneva on Wednesday, says the drop can be explained by the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks. New investments were also offset by some large divestments.
According to the report, China became the largest recipient of FDI in 2014, with receiving $129 billion followed by Hong Kong (China) with $103 billion and the United States with $92 billion. Half of the top 10 FDI recipients in the world, are, however, developing economies including Brazil, China, Hong Kong (China), India and Singapore.
India leads regional FDI as inflows to South Asia rose by 16 per cent in 2014 to South Asia rose to $41 billion in 2014 when the FDI inflows to India surged by 22 per cent to about $34 billion. The FDI inflow to Bangladesh fell by 5.0 per cent to $1.5 billion.
Pakistan received 31 per cent higher FDI as it increased to $1.7 billion in 2014, driven by China-Pakistan Industrial Corridor and associated Chinese investment in infrastructure and manufacturing in the overall context of implementing the "One Belt, One Road" strategy. Similarly, China also drove FDI inflow to Sri Lanka.
In the manufacturing sector in South Asia, the report says that FDI success stories have emerged at country, industry and local-levels, with the automotive industry in India showing how large-scale FDI inflows can reshape the trajectory of industrial progress in low-income countries.
The report also said Bangladesh, Nepal, Pakistan and Sri Lanka recorded cases of greenfield investment announced by foreign companies during 2013-2014. In 2013, for example, Mahindra & Mahindra (India) announced a more than $200 million investment in a plant producing light trucks and utility vehicles in Bangladesh.
According to the report, in 2014, nine of the 20 largest investor countries were developing or transition economies. These are Chile, China, Hong Kong (China), Taiwan Province of China, Kuwait, Malaysia, the Republic of Korea, the Russian Federation and Singapore.
Looking beyond 2014, the report says that a sustained recovery in global FDI is in sight with global FDI inflows projected to grow by 11 per cent to $1.4 trillion in 2015. The report also foresees further rises to $1.5 trillion in 2016 and to $1.7 trillion in 2017.
The report, which monitors international business activity in a number of areas, found that international production by multinationals rose in 2014. The foreign sales and assets of multinationals expanded faster than their domestic counterparts, generating added value of approximately $7.9 trillion, a BSS report said.