GLOBAL TRENDSeBook

 
GLOBAL TRENDS
 
 
 
 
 


South, East and South-East Asia and Oceania...

 


. South, East and South-East Asia and Oceania, with FDI outflows of $150 billion in 2007, has become a significant source of FDI, particularly for other developing countries both within and outside the region.


. With the doubling of FDI outflows from West Asia to $44 billion, this region remains an important source of FDI, led by the countries of the Gulf Cooperation Council (GCC). SWFs based in the subregion have also accounted for a major proportion of FDI.


. FDI outflows from Latin America and the Caribbean fell by 17% in 2007, to around $52 billion. This was due to the decline in outflows from Brazil to $7 billion following the exceptionally high level of $28 billion reached in 2006.


South-East Europe and CIS


FDI inflows into the transition economies of South-East Europe and CIS increased significantly by 50% to reach a new record of $86 billion in 2007 - the seventh year of uninterrupted growth of FDI flows to the region. Inflows to the region's largest recipient, the Russian Federation, rose by 62% (annex table B.1).


Interest in the Russian Federation as an FDI destination does not seem to have been greatly affected by the tightening of Russian regulations relating to strategic industries, including natural resources, or by disputes over environmental protection and extraction costs. Thus, overall, FDI inflows into the region remained buoyant.


FDI outflows from South-East Europe and CIS also rose to record levels in 2007, reaching $51 billion - more than twice as high as the previous year. FDI from the Russian Federation reached a new high in 2007 ($46 billion).


Sectoral patterns


In recent years there has been a significant increase in FDI flows to the primary sector, mainly the extractive industries, and a consequent increase in the share of that sector in global FDI flows and stock (WIR07: 22 and annex tables A.I.5-A.I.8).


The primary sector's share in world FDI is now back to a level comparable to that of the late 1980s. The services sector still accounts for the largest share of global FDI stocks and flows, while the share of manufacturing has continued to decline.


In 2006, the primary sector's share of the estimated total world inward FDI stock stood at 8%, and the sector accounted for 13% of world FDI inflows in the period 2004-2006. There has been some recent levelling off of FDI flows to the primary sector, as indicated by FDI flow data as well as data on cross-border M&As and greenfield investment projects.


The value of cross-border M&As in the sector declined from $156 billion in 2005 to $109 billion in 2006, and recovered only partially (to $110 billion) in 2007 (annex table B.6). The increase in FDI in the primary sector in 2007 was more evident in greenfield investments. Their number rose from 463 in 2005 to 490 in 2006 and 605 in 2007 (annex table A.I.2).




© 2008