UNCTAD -Recent activities on FDI statistics and latest trends in FDI Meeting on working group on Foreign Direct Investment Statistics Luxembourg, June 15, 2016 Astrit Sulstarova Chief, Trends and Data Section Division on Investment and Enterprise, UNCTAD
Contents Recent activities on FDI statistics Dissemination of FDI data Technical assistance on FDI statistics Compiling statistics on greenfield FDI projects Latest trends in FDI 2
World Investment Report 2015 Press events were organized in 33 countries The report was downloaded more than 1.5 million times from June through December 2015 The number of media coverage collected from over 100 countries reached more than 2000 3
Global Investment Trend monitor The monitor analyses the most recent trends in FDI flows in developed, developing and transition economies and assesses their prospects for 2016. The Trend Monitor of January 2016, has already been relayed by around 500 media organizations, including The Wall Street Journal, Financial Times, Reuters, etc. 4
FDI statistics by country and sector/industry 5
Contents Recent activities on FDI statistics Dissemination of FDI data Technical assistance on FDI statistics Compiling statistics on greenfield FDI projects Latest trends in FDI 6
Technical Assistance on FDI Statistics In 2015, two regional workshops and one national workshop were organised: In Bahrain for GCC countries together with GCC-Stat In Montenegro for CEFTA economies together CEFTA secretariat In New Dehli for a national workshop 7
Technical Assistance on FDI Statistics: FDI reports 8
Contents Recent activities on FDI statistics Dissemination of FDI data Technical assistance on FDI statistics Compiling statistics on greenfield FDI projects Latest trends in FDI 9
Greenfield FDI projects: definition and shortcomings Greenfield FDI projects relates to investment projects that entail the establishment of new entities and the setting up of offices, buildings, plants and factories from scratch. It is a kind of working capital. Statistics on greenfield investment and extension of capacity are not generally compiled by most countries. Clear definitions and a description of the concepts and the coverage are not available. One of the difficulties in the measurement of greenfield investments is the time element, i.e. for how long a direct investment should be considered as greenfield investment. Some have indicated that an investmentwillceasetobeclassifiedasgreenfield4to5yearsafterthe initial investment. 10
Collecting greenfield FDI projects: the example of the United States In 2015, the Bureau of Economic Analysis released statistics on expenditures on new investments. The statistics measures foreign investors expenditures to acquire, establish, or expand U.S. businesses Greenfield investment includes expansions and establishments 11
Collecting greenfield FDI projects: the example of the United States Detail available First year expenditures and total planned expenditures Type of transaction (acquisition, establishment, expansion) Country, industry, state New data relate to FDI financial transactions with some key differences New data focus on new investments; FDI flows include other transactions between parents and affiliates New data include cost of investment whether funding is from foreign parent or existing affiliate However, the survey captures the source of financing (domestic or foreign) 12
Collecting greenfield FDI projects: some results 93% the expenditures were for acquisitions. Greenfield investment expenditures totaled $16.6 billion. Total planned greenfield expenditures (including first and other years) reached $39 billion; compared with announced greenfield investment ($68 billion) By industry, real estate was the largest industry($4.7 billion) By country of UBO, the largest source of first-year greenfield expenditures was Canada at $4.0 billion. Including expenditures from other years, the largest source countries for greenfield expenditures were China and Japan 13
Contents Recent activities on FDI statistics Dissemination of FDI data Technical assistance on FDI statistics Compiling statistics on greenfield FDI projects Latest trends in FDI 1 4
Global FDI flows rose in 2015 but road to recovery remain bumpy FDI inflows, global and by group of economies, 1995 2015 (Billions of dollars) Source: UNCTAD *Preliminary estimates.
FDI flows surged in North America and Europe Regional contribution to FDI flows growth, 2014 2015 (Billions of dollars) Source: UNCTAD. *Preliminary estimates.
Developing Asia remained the largest host region in the world FDI inflows by region, 2013 2015 (Billions of dollars) Source: UNCTAD. *Preliminary estimates.
Developing economies make up half of the top 10 host economies Top 10 host economies for FDI flows, 2015* (Billions of dollars) Source: UNCTAD. *Preliminary estimates.
Rise in cross-border M&As, while little changes in announced greenfield investments values Cross-border M&As, 2007-2015 (Billions of dollars) Announced greenfield investment projects, 2007-2015 (Billions of dollars) Source: UNCTAD. *Preliminary estimates.
FDI inflows in 2016: a cloudy outlook Barring another wave of M&A deals and corporate reconfigurations, FDI flows are expected to decline in 2016, reflecting: the fragility of the global economy, volatility of global financial markets, weak aggregate demand, a significant deceleration in some large emerging market economies. elevated geopolitical risks and regional tensions which could further amplify these economic challenges. 20
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