FDI down 16% last year, United Nations finds

25 Jun 15

Global foreign direct investment declined by 16% last year to $1.23 trillion, thanks to a fragile world FDI economy, policy uncertainty for investors and heightened geopolitical risks, the United Nations revealed in a new report.

According to its annual World investment report, global FDI is poised to grow 11% this year to $1.4 trillion, pushed by higher investments from multinational organisations.

FDI is projected to rise to $1.5trn in 2016 and to $1.7trn in 2017.

The UN is calling for a systematic reform of the international investment agreement (IIA) regime.

“‘Old style’ international investment agreements have increasingly come to a dead end,” UNCTAD secretary-general Mukhisa Kituyi, said.

“Reform should make the global network of international investment agreements better fit the needs and realities of today and tomorrow.”

Suggested reforms included an overhaul of investment dispute settlements and expanded investment promotion and facilitation within IIAs.

“Only a common approach will deliver an international investment agreement regime in which stability, clarity and predictability help achieve the objectives of all stakeholders,” Kituyi said. 

The UN also said it was important for governments to properly address policy challenges, such as fiscal leakages through tax avoidance and the role of offshore investment links that minimise tax.

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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