There is today broad recognition that foreign direct investment (FDI) affects the
development prospects of individual countries in important ways - but also that the outcome
depends crucially on policies applied both domestically and internationally. The international community needs to ensure that developing countries are provided the necessary means to be able to benefit from the opportunities that have emerged as a result of liberalization, technological progress and stiffer international competition.
2005 saw an acceleration in the recovery of global FDI flows, up 29% over 2004 to $900
billion. This recovery benefited both developed and developing economies. For most developing countries, FDI is now by far the largest component of foreign capital, accounting for around half of such flows on average. In most cases, it is several times larger than development aid.
FDI, however, remains highly geographically concentrated, and a number of developing
countries that have not received much FDI are faced with serious challenges to finance their
development. In this respect, new initiatives such as those proposed by the Millennium
Development Goals by the United Nations and by the Commission for Africa that was set up in
2004 by the Government of the United Kingdom may help boost investment if implemented.
Also important is entrepreneurship and enterprise development, as competitive enterprises in
prospective host countries attract investment, including FDI.
As the focal point in the United Nations system on investment and technology, and
building on 30 years of experience in these areas, UNCTAD, through DITE, promotes
understanding of key issues, particularly matters related to foreign direct investment and transfer of technology. DITE also assists developing countries in attracting and benefiting from FDI and in building their productive capacities and international competitiveness.
The three pillars of the Division´s work are policy research and analysis, consensusbuilding
and technical assistance. In the course of 2005, in pursuit of the above goals, our staff
organized some 100 conferences, meetings and workshops, produced over 100 publications,
including the flagship World Investment Report (WIR), and carried out around 120 missions. DITE has also made a substantial contribution to the ongoing debate on how best to achieve the Millennium Development Goals.
The DITE Activities Report 2005 provides a detailed overview of these activities. It is also designed to provide the reader an impression of the impact of our work.
In concluding, I would like to acknowledge DITE´s dedicated staff who continued to
respond effectively and efficiently to a demanding workload amidst decreasing resources.
(Geneva, March 2006)
Division on Investment, Technology and Enterprise Development