Foreign direct investment declined in 2012, U.N. reports

A new United Nations Report finds global foreign direct investment — or investment of foreign assets into domestic structures, equipment, and organizations — fell by 18 percent last year to $1.35 trillion. But, the U.N. Conference on Trade and Development’s annual World Investment Report notes developing countries, for the first time ever, received the majority of investment.

The conference’s annual survey of investment trends finds global foreign direct investment declined in 2012 to below the pre-economic crisis level. It attributes this mainly to economic fragility and policy uncertainty for investors.

The report says developing countries took the lead in attracting foreign direct investment in 2012. For the first time ever, it says developing economies did better than developed countries, accounting for 52 percent of global investment flows.

The report says inflows to least developed countries rose by 20 percent in 2012 to a record $26 billion. It notes the growth was led by strong gains in Cambodia, the Democratic Republic of the Congo, Liberia, Mauritania, Mozambique and Uganda.

The report says flows to African countries increased by 5 percent to $50 billion in 2012, mainly due to investment in extractive industries. While natural resources are still the mainstay of investment flows to Africa, the report notes consumer-oriented manufacturing and services are attracting more money.

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