World Investment Fell Everywhere But Central and Eastern Europe in 2002

In early September the U.N. Conference on Trade and Development released the World Investment Report 2003. Not surprisingly, it found that global foreign direct investments dropped by 21 percent in 2002 to just $651 billion — the lowest level of foreign direct investments since 1997.

The decline was felt everywhere but in Central and Eastern Europe where foreign direct investments actually increased to a new high of $23 billion in 2002. UNCTAD Secretary-General Rubens Ricupero predicted increased investment growth in Central and Eastern Europe for 2003,

We anticipate further gains this year and next of FDI flows into the region. The 2002 advances, and indeed those we are expecting this year, are in sharp contrast to declines in FDI in all other world regions.

And the declines in other parts of the world were huge. In Latin America and the Caribbean, for example, foreign direct investments fell by one-third to just $56 billion — the lowest level since 1996. And that is unlikely to improve much in 2003 according to the UNCTAD report.

In Africa, total FDI declined by 41 percent to just $11 billion. The result there was disproportionately borne by a few nations, however. In fact, 30 of 53 African nations actually saw an increase in foreign direct investment in 2002, but this wasn’t enough to offset the decline in the other 23 countries. The UNCTAD report characterizes 2003 as being promising for an increase in investment.

The global economic situation is such that even developed countries saw a slight decline in foreign direct investment — from $590 billion in 2001 to $460 billion in 2002.

Sources:

Global investment flows continue to fall, report shows. United Nations Wire, September 4, 20203.

Africa Not Spared By Global Downturn In Foreign Direct Investment
But Faces Promising Outlook This Year, Says UNCTAD. Press Release, United Nations Conference on Trade and Development, September 4, 2003.

Continued Growth Seen In Foreign Investment Into Central And Eastern Europe
In Sharp Contrast To Declines In Other Regions, Press Release, United Nations Conference on Trade and Development, September 4, 2003.

FDI Inflows To Developed Countries Fell In 2002, For Second Consecutive Year . Press Release, United Nations Conference on Trade and Development, September 4, 2003.

FDI To Latin America & Caribbean Plummeted In 2002 Flows This Year Could Resemble 2002 Levels, Predicts UNCTAD, Press Release, United Nations Conference on Trade and Development, September 4, 2003.