In his keynote address at this major conference, UNCTAD's Deputy Secretary-General reviewed the implications of the global economic slowdown for foreign direct investment (FDI).
The Annual Investment Meeting (AIM) is being held in Dubai, United Arab Emirates, from 30 April to 2 May.
Taking place under the patronage of the Vice-President and Prime Minister of the United Arab Emirates and Rules of Dubai, H.H. Sheikh Mohammed Bin Rashid Al Maktoum, the meeting brings together senior government officials, national investment promotion agencies, and institutional and private investors to discuss key issues in foreign direct investment. The theme of this year's conference is "A future international economic landscape in the making: Implications for FDI and the economic growth prospects of emerging and frontier markets".
Mr. Draganov told the meeting that the slowdown in the global economy caused global FDI flows to decline by 18 per cent last year. FDI fell to levels close to the trough reached just after the global financial crisis, in 2009, he said.
However, this decline varied across regions. Notably, FDI flows to developing countries remained resilient, decreasing by only 3 per cent. As a result, in 2012, investment flows to developing countries exceeded those to developed countries for the first time.
Referring to the findings of UNCTAD's latest Investment Policy Monitor Mr. Draganov observed that the changing economic environment and persistent uncertainties are leading many countries to revise their investment policies.
While the majority of policy measures implemented in recent months have been aimed at promoting foreign investment, there has been an increase in the proportion of more restrictive measures. Many of these restrictive measures reflect the legitimate concerns of host countries about supporting sustainable development objectives, Mr. Draganov said. Nevertheless, there is a need for continued vigilance to avoid protectionism, he told the meeting.
This more cautious approach is also reflected at the international level, where the number of new investment agreements in 2012was at its lowest level in 20 years, Mr. Draganov said. Many such agreements are also being reviewed to strengthen their sustainability elements.
This on-going re-assessment of investment policies can be beneficial to growth and development, provided it strikes the right balance, Mr. Draganov told the meeting.
