FDI Trends & Developments
European Regional Economic Forum 2010
The Role of FDI in Developing
Knowledge-Based Competitiveness in
European Regions
Elisabeth Tuerk
Legal Expert, UNCTAD, Division on Investment
and Enterprise (DIAE), Geneva
UNCTAD/CD-TFT
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Outline
• UNCTAD – some background
• Latest trends & developments
• FDI & investment policies
• FDI & (regional) competitiveness
UNCTAD/CD-TFT
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UNCTAD – Some Background
WIF
Investment
Facilitation
Compact
WIR
Consensu
s
Building
Investment
Information
Systems
Research
&
Analysis
Technical
Assistance
Mission:
Entrepreneurship
Investment and Enterprise for Development
The Crisis ended 4-year FDI boom
($ billions)
• Global FDI declined from $2 trillion (2007) to $1.7 trillion (2008)
• FDI flows to developed economies fell by 29%, to $962 billion
• FDI flows to developing economies rose 17%, to $621 billion
• Transition economies posted a new record high, with inflows reaching
$114 billion, a 26% increase
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Global FDI Quarterly Index,
2000-2009
Base 100: quarterly average of 2005
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Cross-border M&A Sales &
Int. Greenfield Projects, 2007-2009
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Top Recipients of FDI Inflows
Global FDI inflows, top 20 economies, 2007–2008
($ billion)
The US remained the
largest recipient country,
followed by France,
China, UK & the Russian
Federation.
The fact that half of the
top 20 recipients are
emerging economies is
symbolic of the changing
FDI landscape of 2008.
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TNC’s Int. Investment Plans
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WIR & Global Investment Trends Monitor
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National Policy Trends: Overall more
favourably to FDI
National policy changes towards FDI
100%
90%
80%
70%
60%
50%
94.0
88.0
79.0
77.0
21.0
23.0
2005-2007
2008
40%
30%
20%
10%
0%
6.0
1992-2002
12.0
2003-2004
Less favourable
More favourable
However, in some countries a more restrictive FDI approach has emerged
 Additionally: signs of increasing “covert” protectionism, e.g.,
– favouring domestic investment or invoking “national security” exceptions
that stretch the definition of national security
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International Policy Trends:
IIA Network Growing
•In 2008: 59 BITs and 75 DTTs were signed;
•1st half of 2009: 25 BITs were signed;
•By 1st half of 2009, totals: 2.717 BITs and 2.825 DTTs.
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Other Int. Investment Agreements,
1957-2008 Growring
Number of IIAs other than BITs and DTTs
300
250
200
150
100
50
0
1957-1967
1968-1978
By period
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1979-1989
1990-2000
2001-2008
Cumulative
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Resulting in ...
A Spaghetti Bowl of IIAs
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UNCTAD’s Quarterly
Investment Policy Monitor
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Impact of FDI
• FDI can improve the competitiveness of, e.g.,
• human resources, local firms, regions & countries
• FDI can upgrade competitiveness, thr., e.g.
• technology transfer, knowledge spillovers, local
innovation, enhancing exports, infrastructure
projects
• Virtuous cycle:
• FDI improves competitiveness while competitiveness
also attracts FDI
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Harnessing FDI for (Regional)
Competitiveness
• Improving locational determinants of FDI,
• both economic & policy determinants
• Strengthening (regional) investment
promotion
• e.g. regional investment promotion agencies
• Offering the right incentives for investors
• e.g. tax incentives, special economic zones,
science and technology parks
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To Conclude...
• Upgrading competitiveness  focus on the
relevant types of FDI
• (Regional) policies  focus on these
relevant types of FDI
• Regional policy on FDI  interlinked &
coherent with national policies
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Visit UNCTAD Websites
www.unctad.org/diae
www.unctad.org/wir
www.unctad.org/fdistatistics
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Thank you for your attention!
Elisabeth.Tuerk@unctad.org
IIA@unctad.org
UNCTAD/CD-TFT
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