The joint report, seventh since September 2009, finds that global foreign direct investment (FDI) inflows rose by 17% in 2011, despite the turmoil in the global economy.
FDI flows will continue to rise in 2012, but only moderately, the report predicts. The fragility of the world economy, uncertainties related to sovereign debt, as well as a possible slowdown of growth in major emerging market economies, still pose risks to the recovery of FDI flows. (For further information see UNCTAD's Global Investment Trends Monitors No. 8 and 9).
During the early October 2011 to early May 2012 reporting period, thirteen G-20 members implemented policy measures related to investment and capital flows:
- Nine G-20 members took investment-specific policy measures (Argentina, Brazil, Canada, China, India, Indonesia, The Russian Federation, Saudi Arabia and South Africa)
- Two G-20 members took measures related to their national security (Italy and the Russian Federation)
- Five G-20 members concluded in total six bilateral investment treaties and one other international agreement with investment provisions (India, Japan, Mexico, The Russian Federation and Turkey)
As in the past, recent investment measures have, for the most part, assisted the opening up of markets and enhanced transparency. However, there were also some important investment restrictive measures. Such measures, if taken in a manner consistent with domestic and international law, can be a legitimate means to further certain policy objectives. Conversely, they can also heighten perceptions of risk, particularly at a time when investors are wary due to broader economic and political turbulence.
The report was prepared in response to G-20 leaders' reaffirmed commitment to resist protectionism, made at their summit meeting in Cannes on 3-4 November 2011. The leaders called on UNCTAD, the World Trade Organization and the Organisation for Economic Cooperation and Development to continue monitoring the situation and to report on it publicly on a semi-annual basis.