Report shows increased ODI by developing economies

Foreign investment activity by transnational corporations (TNCs) from developing economies continued growing in 2013, while that from developed economies stagnated, the United Nations Conference on Trade and Development (UNCTAD) said Monday.

The latest global investment trends monitor report showed that the United States topped the ranking of investors in 2013 at $338 billion, followed by Japan ($135 billion), the Chinese mainland ($101 billion), Russia ($95 billion) and China's Hong Kong ($92 billion).

Among the top 20 investors, seven were from developing and transitional economies and the rest were from developed ones, according to the report.

Investments by TNCs from developing economies grew by 4 percent in 2013 and hit a record high of $460 billion.

Among developing regions, investment flows over the past year from developing countries in Asia increased by 7 percent to $327 billion, according to the report.

Investments from African TNCs also saw a marked increase of 57 percent to $21 billion, mainly due to investments flows from South Africa and Nigeria.

TNCs from Latin America and the Caribbean reduced their investments abroad in 2013 by 10 percent to $112 billion, largely attributed to the 36 percent decline in investments from Central and South America.

As for developed economies, investment levels of their TNCs remained unchanged from 2012, reaching $858 billion, but still 55 percent lower than their peak in 2007. Their share in global foreign direct investment (FDI) outflows reached 61 percent, a historically low level.

It said that investment from the United States dropped by 8 percent to $338 billion while FDI outflows from the European Union saw a growth of 6 percent to $252 billion.

Europe as a whole increased investments by 10 percent to $330 billion, among which Switzerland with $60 billion became the largest outward investor in Europe in the context of substantial decline of outward investments from TNCs from France, Germany and Britain.

Japan continued to expand its TNCs investments in spite of the depreciation of its currency, increasing by over 10 percent to a record $135 billion.

UNCTAD estimated better investment conditions in 2014 and 2015, based on improved global economic prospects and reduced business risks.

However, the organization also highlighted potential risk factors such as an uneven economic recovery, weaker growth in the EU and some emerging markets, as well as risks related to policy uncertainties and regional conflicts.