World Investment Report 2024

World Investment Report

Investment facilitation and digital government

Global foreign direct investment (FDI) fell by 2% to $1.3 trillion in 2023 amid an economic slowdown and rising geopolitical tensions, according to the World Investment Report 2024.

But the report highlights that the decline exceeds 10% when excluding the large swings in investment flows in a few European conduit economies.

The downturn in project finance affected sustainable development, with new funding for Sustainable Development Goals (SDGs) sectors dropping over 10%, particularly in agrifood and water. This hampers efforts to achieve the 2030 Agenda and calls for urgent policy action to revamp sustainable development finance.

The report emphasizes that business facilitation and digital government solutions can address low investment by creating a transparent and streamlined environment. It highlights significant growth in online services and information portals, saying such tools also support broader digital government development, benefiting developing nations in particular.

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Investment is not just about capital flows. It is about human potential, environmental stewardship and the enduring pursuit of a more equitable and sustainable world.
UN Trade and Development Secretary-General
Rebeca Grynspan

Global foreign direct investment remains weak

amid crises and economic fracturing

Global FDI flows fell 2% to $1.3 trillion in 2023, as trade and geopolitical tensions weighed on a slowing global economy. The report underscores that the headline figure exceeds -10% when excluding a few European conduit economies that registered large swings in investment flows.

FDI flows to developing countries dropped 7% to $867 billion.

Tight financing conditions led to a 26% fall in international project finance deals, critical for infrastructure investment. International project finance is crucial for the poorest countries, making them more vulnerable to the global downturn in this type of investment.

Crises, protectionist policies and regional realignments are disrupting the world economy, fragmenting trade networks, regulatory environments and global supply chains. This undermines the stability and predictability of global investment flows, creating both obstacles and isolated opportunities.

While prospects for 2024 remain challenging, the report says modest growth for the year remains possible, citing easing financial conditions and investment facilitation efforts in both national policies and international agreements.

Investments are growing in several global value chain-intensive manufacturing sectors like automotive and electronics in regions and countries with easy access to major markets. But many developing countries remain marginalized, struggling to attract foreign investment and participate in global production networks.


UN Trade and Development calls for

  • 1
    Countries to promote investment by creating a transparent and streamlined environment through business facilitation and digital government tools.
  • 2
    Institutional investors to boost FDI flows to infrastructure projects, especially in developing countries, to support long-term economic growth and stability.

Developing countries see declining

and uneven foreign direct investment flows

Overall, FDI to developing countries fell by 7% in 2023 to $867 billion, but the decrease varied significantly across regions.

While greenfield project announcements in developing countries increased by over 1,000, the distribution was uneven, with nearly half in South-East Asia and a quarter in West Asia.

FDI inflows to Africa declined by 3% to $53 billion. Greenfield announcements included megaprojects like a green hydrogen project in Mauritania. International project finance fell by a quarter in deal numbers and by half in value.

Flows to developing countries in Asia fell by 8% to $621 billion, with China, the world’s second-largest FDI recipient experiencing a rare decline. India and West and Central Asia also saw significant drops, while South-East Asia held steady.

FDI flows to Latin America and the Caribbean decreased by 1% to $193 billion. The number of greenfield investment announcements fell, but the value of greenfield projects rose due to large investments in commodity sectors, critical minerals and renewable energy.

Meanwhile, FDI flows to structurally weak and vulnerable economies increased. Inflows to the least developed countries rose to $31 billion, or 2.4% of global flows. Landlocked developing countries and small island developing states also saw increases. But in all three groups, FDI remains concentrated among a few countries.

UN Trade and Development calls for

  • 1
    International organizations to increase international project finance to structurally weak and vulnerable economies to mitigate their disproportionate vulnerability to global downturns.
  • 2
    Developing countries to promote and facilitate regional and South-South FDI, which is more likely to involve small and medium-sized enterprises.

Sustainable finance needs urgent boost

to narrow gaps for global goals

Tight financing conditions in 2023 led to a 26% downturn in international project finance, which is crucial for infrastructure investment in areas such as power and renewable energy.

As a result, investment in sectors linked to the Sustainable Development Goals (SDGs) fell by more than 10%. The report highlights that agrifood systems and water and sanitation registered fewer internationally financed projects in 2023 than in 2015, when the goals were adopted.

While funds for SDG investment through sustainable finance products in global capital markets is still growing, the pace is slowing. Sustainable bonds showed marginal growth in 2023, while inflows in sustainable investment funds dropped by 60%.

Greenwashing concerns related to misleading sustainability claims are increasingly affecting investor demand. Policy actions are urgently needed to mitigate the risk of widening backlash against sustainable investment strategies.

Policymakers should also consider the negative spillover effects of sustainability reporting standards on firms outside main markets. In particular, small and medium-sized enterprises in developing countries may struggle to meet increasing disclosure requirements, which could affect their market access and participation in global supply chains.

UN Trade and Development calls for

  • 1
    Governments to promote investment in projects related to sustainable development, including through outward investment promotion measures and through provisions in international agreements.
  • 2
    Institutional investors to set more ambitious targets for fossil fuel divestment and increased investment in renewables.
  • 3
    Systematic efforts to address greenwashing, including well-defined product standards, robust sustainability disclosures, external auditing and third-party ratings.

Developing countries continue efforts

to promote investment

Lacklustre financial flows to developing countries were not due to a lack of investment facilitation efforts.

In 2023, 86% of the investment policy measures taken by developing countries were more favourable to investors. In contrast, 57% of measures in developed countries were less favourable, with restrictions, such as FDI screening mechanisms increasingly used to address national security concerns.

Globally, the number of investment policy measures in 2023 matched the five-year average, with about three quarters favorable to investors. Investment facilitation reached a record 30% of all measures. Incentives targeted the services sector and renewable energy in particular.

In 2023, 29 new international investment agreements (IIAs) were concluded, less than half being traditional bilateral treaties. Reforming older IIAs remains slow, with about half of global FDI still governed by non-reformed treaties, increasing the risk of investor-State dispute settlement (ISDS) cases. This is higher for developing countries (two-thirds) and LDCs (three-quarters).

Only 16% of global FDI stock is covered by new-generation IIAs.

The total ISDS case count reached 1,332, with 60 new arbitrations in 2023. About 70% of new cases were against developing countries, including three LDCs, with claims mostly in the construction, manufacturing and extractive sectors.

UN Trade and Development calls for

  • 1
    Policymakers worldwide to continue promoting and facilitating investment to attract FDI and improve the business environment for local firms, including small businesses.
  • 2
    International organizations and governments to accelerate efforts to reform the IIA regime to reduce the risks, especially for developing countries, of investor-state disputes
  • 3
    Countries and institutions to encourage investment regimes aligned with the Sustainable Development Goals.

‘Bottom-up’ approach to digital government

could help boost investment

Investment facilitation aims to simplify procedures for investors by increasing access to information, enhancing transparency and streamlining administrative processes. Digital government tools are key to effective implementation.

Since UN Trade and Development launched its global action menu for investment facilitation in 2016, online single windows in developing countries have increased from 13 to 67, and in developed economies from 12 to 28. Information portals for business and investor registration also expanded from 82 to 124 in developing countries and from 43 to 48 in developed economies.

Explore the Global Enterprise Registration portal.

The report underscores that digital investment facilitation should extend beyond initial procedures. The benefits of smooth business registration processes are limited if subsequent procedures remain opaque, inefficient, and unpredictable.

It also highlights that digital business and investment facilitation can lead to broader digital government implementation, addressing governance and institutional weaknesses that hinder investment.

The report advocates for a bottom-up approach as a complementary route to top-down digital government development. Starting with basic business services and gradually expanding coverage across more institutions allows countries to capture economies of scale and scope of digital government tools, benefiting all businesses – foreign and domestic, large and small. Developing nations, in particular, can gain immediate value without major legislative interventions.

UN Trade and Development calls for

  • 1
    A “bottom-up” approach to digital government tools, starting from basic services for business and gradually broadening coverage across more institutions to capture economies of scale and scope and extend benefits to all businesses.
  • 2
    International organizations to offer technical support to developing countries to build, maintain and enhance digital platforms, leveraging development assistance where necessary.