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FDI to South-East Europe and the Commonwealth of Independent States set to decline sharply after eight years of growth

16 September 2009

The contents of this press release and the related Report must not be quoted or
summarized in the print, broadcast or electronic
media before 17 September 2009,17:00 [GMT]
(13:00 New York; 19:00 Geneva, 22:30 New Delhi, 02:00 - 18 September 2009 Tokyo)

Geneva, 17 September 2009 - In the first quarter of 2009, foreign direct investment (FDI) inflows to South-East Europe and the Commonwealth of Independent States (CIS) fell by 46% compared to their level over the same period of 2008 (see Table 1). This follows a 26% rise in inflows in 2008 for a total for the year of a record US$114 billion, UNCTAD´s World Investment Report 2009(1) reveals.

The report, released today, is subtitled Transnational Corporations, Agricultural Production and Development.

2008 marked the eighth consecutive year of growth of inward FDI flows. Incoming investment remained concentrated in a few economies, with the top three recipients - the Russian Federation, Kazakhstan, and Ukraine, in that order - accounting for 84% of the total in 2008. The US$70 billion worth of inflows to the Russian Federation were driven mainly by large investments in its liberalized power generation industry, and in automotives and real estate. Investments in the development of oil and gas fields continued in Kazakhstan and were the principal component of the $15 billion FDI invested in the country; while large acquisitions in the banking and steel industries drove inward FDI to Ukraine to more than $10 billion. However, the report expects a decline in FDI inflows to these large economies in the short term due to the economic and financial crisis, the fall in commodity prices, and the near exhaustion of major privatization opportunities.

Outward FDI flows from South-East Europe and the CIS maintained their upward trend in 2008, amounting to US$52 billion. These flows were dominated yet again by Russian transnational corporations (TNCs). In the first half of 2008, Russian TNCs continued to seek new markets for their products abroad and sought to gain access to technological innovations and advanced marketing and management know-how. In contrast, during the second half of the year, divestments, freezing, or cancelling of ongoing acquisitions reduced FDI outflows significantly.

Policies are an important factor in attracting FDI to this region, and most policy changes in South-East Europe and the CIS have been more favourable to foreign investors. Some countries continued to liberalize FDI-related regulations in certain industries, such as electricity generation in the Russian Federation, and have opened up others, such as banking, retail and telecommunications in Belarus, to partial foreign participation. However, some governments in the natural-resource-rich countries of the CIS strengthened their control over natural resources in order to increase their share of the resulting income. Meanwhile, countries of South-East Europe have also been strengthening their ties with the European Union. For example, Croatia is negotiating its membership agreement, and Albania´s Stabilization and Association Agreement with the EU entered into force on 1 April 2009.

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Tables and figures

Table 1. South-East Europe and CIS: FDI flows of selected countries, 2008-2009, by quarter (Millions of dollars)

Table 1.  South-East Europe and CIS: FDI flows of selected countries, 2008-2009, by quarter
(Millions of dollars)
Source: UNCTAD, World Investment Report 2009: Transnational Corporations, Agricultural Production and Development, table II.22


1.The World Investment Report 2009: Transnational Corporations, Agricultural Production and Development (WIR09) (Sales No. E.09.II.D.15, ISBN: 978-92-1-112775-1) may be obtained from United Nations Sales Offices at the below-mentioned addresses or from United Nations sales agents in many countries. Price: US$ 95 (50% discount for residents in developing countries and a 75% discount for residents in least developed countries). This includes the book and the CD-ROM. Customers who would like to buy the book or the CD-ROM separately, or obtain quotations for large quantities, should enquire from the sales offices. Residents of countries in Europe, Africa and West Asia may send orders or inquiries to: United Nations Publication/Sales Section, Palais des Nations, CH-1211 Geneva 10, fax: +41 22 917 0027, e-mail:; and those from the Americas and East Asia, to: United Nations Publications, Two UN Plaza, DC2-853, New York, N.Y. 10017, U.S.A., telephone: 1 212 963 8302 or 1 800 253 9646, fax: 1 212 963 3489, e-mail: Internet:

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