Press Releases

     

    TAD/1950
    26 August 2003

    DEVELOPED COUNTRIES DOMINATE
    WORLD FDI STOCK

    (Reissued as received.)

    GENEVA, 25 August (UNCTAD) -- Which regions and countries are the world's biggest magnets for foreign direct investment (FDI)?  A world map showing the size of some countries and regions weighted by the amount of FDI they have attracted over time reveals that developed countries dominate the picture.  One exception is that Japan -- an economic giant -- does not figure prominently as a host country.  Among developing economies, China; Hong Kong, China; and Brazil stand out.

    The world's FDI stock stood at $7.1 trillion in 2002, up more than tenfold since 1980 (table 1).  Why does the size of FDI stock matter?  That stock is the basis of international production -- it captures the combined value of all foreign affiliates.  Ebbs and flows in the yearly value of FDI, while important, augment the stock of FDI as long as they are positive.  So the stock of FDI matters more than flows -- for the structure of global specialization, for deepening global integration through production networks, and for generating the benefits associated with FDI and international production.  It also matters for new FDI capital flows arising from the reinvestment of earnings and sequential flows to FDI.  More specifically:

    -- The developed world hosts two thirds of world inward FDI stock in 2002 ($4.6 trillion), mainly distributed in the United States, the United Kingdom and Germany.

    -- The inward FDI stock of developing countries ($2.3 trillion) totalls about a third of their gross domestic product (GDP), almost twice the 19 per cent for developed countries.  Back in 1980, the respective ratios were 13 per cent and 5 per cent.

    -- Central and Eastern European countries increased their inward FDI stock substantially, from $3 billion in 1990 to $188 billion in 2002.  As a percentage of GDP, the ratio rose from 1 per cent to 21 per cent over the same period.

    -- The 49 least developed countries -- the poorest developing countries -- accounted for 2 per cent of the total inward FDI stock of developing countries in 2002.  This share has not changed much in recent years.  The largest host least developed country is Angola, registering FDI stock on a level comparable to that in the Philippines.

    On the outward side, developed countries are the preponderant suppliers of FDI, accounting for almost nine tenths of the world's outward stock in 2002.  The most striking change in the past 20 years is that the European Union has become by far the largest source.  In 1980, the outward stocks of the Union and the United States were almost equal, at around $215 billion.  But by 2002, the European Union's stock (including intra-European Union stock) had reached $3.4 trillion, more than twice that of the United States ($1.5 trillion). The gap opened in the 1980s and widened in the late 1990s.  Meanwhile, Japan’s stock has been stable relative to the European Union’s, with the country’s outward stock valued at about a tenth of that of the Union.

    Outward FDI stocks have changed even more than inward stocks for developing countries, increasing from 3 per cent of GDP in 1980 to 13 per cent in 2002, the result of the emergence of developing-country transnational corporations.  In 1980, the FDI stock originating in developing countries ($65 billion) accounted for 11 per cent of the global outward FDI stock; by 2002 the corresponding share was 12 per cent.

    The growth rate of outward stock from developing countries in the 1990s was dramatic.  South, East and South-East Asia together comprise the most important developing region for outward FDI stock, with its stock exceeding Japan’s for the first time in 1997 and becoming almost twice as large as Japan’s by 2002.  Latin America and the Caribbean registered a more than threefold increase in its outward FDI stock between 1980 and 2002.

    Table 1.  Inward FDI stock, by group of economies, 1980, 1990, 1995, 2000, 2001 and 2002

    (Billions of dollars)

     

     

     

     

     

     

    Group of economies

    1980

    1990

    1995

    2000

    2001

    2002

    World

    699

    1 954

    3 002

    6 147

    6 607

    7 123

    Developed countries

    392

    1 400

    2 041

    3 988

    4 277

    4 595

    Developing countries

    307

    551

    921

    2 030

    2 174

    2 340

    Africa

    32

    51

    78

    145

    158

    171

    Latin America and Caribbean

    50

    117

    202

    609

    706

    762

    Developing Asia

    216

    340

    583

    1186

    1215

    1305

    Central and Eastern Europe

    ..

    3

    40

    129

    156

    188

    Memorandum:.

    Least developed countries

    3

    8

    16

    36

    41

    46

    Source:  UNCTAD.

    Table 2.  Outward FDI stock, by group of economies, 1980, 1990, 1995, 2000, 2001 and 2002

    (Billions of dollars)

     

     

     

     

     

     

    Group of economies

    1980

    1990

    1995

    2000

    2001

    2002

    World

    564

    1763

    2901

    5992

    6319

    6866

      Developed countries

    499

    1629

    2584

    5155

    5488

    5988

      Developing countries

    65

    133

    311

    817

    807

    849

    Africa

    7

    21

    33

    49

    43

    44

    Latin America and Caribbean

    52

    63

    91

    160

    168

    173

    South East Asia

    5

    41

    179

    594

    577

    611

      Central and Eastern Europe

    ..

    1

    6

    19

    25

    29

    Memorandum:

    Least developed countries

    ..

    1

    2

    3

    3

    3

     

     

     

     

     

     

     

    Source:  UNCTAD.

     

    This press release was prepared in the context of the World Investment Report 2003.  FDI Policies for Development:  National and International Perspectives, to be released on 4 September 2003 at 17:00 GMT.  For more information, go to:  http://www.unctad.org/wir; or contact the Press Office, tel.:  +41 22 907 58 28, e-mail:  press@unctad.org; or K. Sauvant, +41 22 907 5707, e-mail:  karl.sauvant@unctad.org.

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