Developing economies main source of foreign investment, UN

New York, 28 Apr – (ANA) - Developing and transition economies were the source of most

of the global foreign direct investment (FDI) last year, with 70 per cent of their investments

flowing to other emerging economies, according to a new report

by the United Nations agency that promotes the integration of developing

countries into the world economy.

As developed countries continued to confront the effects of the global financial

crisis, many transnational corporations (TNCs) in developing and transition

economies invested in other emerging markets, where recovery was strong and the

economic outlook better, according to the Global Investment Trends Monitor of UN Conference on Trade and Development (UNCTAD).

An estimated 70 per cent of investment by developing and transition economies

were directed towards other developing and transition economies, compared with

developed countries whose share was about 50 per cent.

Overall, global FDI outflows rose last year to an estimated $1,346 billion

compared with $1,189 billion the previous year. The rise reflected an

improvement in corporate profits and the increasing internationalization of

TNCs, according to the UNCTAD data. The statistics also indicated that the

global financial crisis caused firms to rationalize their corporate structures

and increase efficiencies, often by relocating business functions to areas where

they could take advantage of lower costs. (ANA)

FA/ANA/28 April 2011-----------