Inflows in FDI

The United States of America has been doing well as far as foreign direct investment is concerned. It is presently one of the major recipients of foreign direct investment in the world. However, this position of the USA is corroborated by the decent performance of the economically developed countries as far as receiving foreign direct investment is concerned.

During the year 2006 the foreign direct investment made in the economically developed countries has been $800 million. This has been an improvement of 48%.

The amount of foreign direct investment made in the United Kingdom has also been on the higher side compared to the previous years. The 25 members of the European Union have received 45% of the total foreign direct investment made in the year 2006.

The foreign direct investment in the members of the Organization for Economic Co-operation and Development has been far from being impressive. The foreign direct investments made in these countries have been on a downward slope since 2003.

This situation has been brought about by the relatively unimpressive economic performance of the significant members of this association in the recent times.

Such a recession in the performance has acted as a hindrance to the external and the internal investors. The foreign direct investors have not been interested in the companies of these countries. With regards to foreign direct investment the condition of Japan has been critical in the recent times. In the year 2006 Japan experienced its first negative cash inflow in 17 years.

In Africa the foreign direct investment has touched new heights. More than $38 billion has been invested in the recent years and this is a record in itself. This has happened owing to the increase in the foreign direct investment that is being made in countries that have high oil and other natural resources.

It has been observed that these countries have been receiving foreign direct investment from the economically developed, as well as developing countries. The mergers and acquisitions in the first six months of 2006 have also been three times higher than what they were in the similar time in 2005. However, it has also been seen that countries that have lesser natural resources have lesser foreign direct investment.

In the Caribbean and the Latin American region the rate of foreign direct investment has been on the wane. Mexico and Brazil are the leading countries in this region as far as foreign direct investment is concerned. The inflows have increased by 6% in Brazil and in Mexico the rate has been steady.

Chile has experienced a 48% increase in the foreign direct investment being made in their country. This has been owing to the fact that the mining industry of Chile has had the lion's share of the reinvested earnings. However, the foreign direct investments made in Argentina and Chile have gone down by 30% and 52% respectively.

In the countries like Bolivia, Venezuela and Ecuador the governmental stance towards the extractive industries has changed. They are now pushing for increased revenues, as well as governmental control. This is expected to have a negative effect on the investors.

In Asia and Oceania the foreign direct investment has been on the higher side. The figure for 2006 was $230 billion and this was an improvement of 15% from 2005. China, Hong Kong and Singapore have been the leading investment destinations in this area.

In the South Asian region, China and India have been the leading investors. India has invested twice that what it did in 2005. India has also experienced unprecedented levels of foreign direct investment in the country. In the West Asian region, countries like Turkey and others that have vast oil reserves have also been receiving high foreign direct investment.

Back

Keywords:

policies fdi, fdi policies, fdi, investment in india, investment, investment planning, india