An audience of 67 lecturers and students from Vi Russian members, St. Petersburg State University and the North-West Institute of Management, joined UNCTAD for a videoconference presentation of the World Investment Report (WIR) 2016 October 12.
WIR co-author, Astrit Sulstarova, of the Division on Investment and Enterprise, reported that 2015 witnessed a significant increase of 38 percent in FDI inflows, primarily destined to developed economies.
“The increase may mask some tax-inversion deals, and a big portion comes from mergers and acquisitions,” he explained. “After removing these effects, the actual increase was around 15 percent.”
The performance of regions was heterogeneous, with developed economies surpassing developing countries as FDI recipients for the first time in years. FDI flows to transition economies fell by over 30 percent, he remarked, while developing Asia is still the region most attractive to investors in terms of inward FDI.
However, the perspectives for 2016 point toward a decrease of around 10 percent to 15 percent in global FDI flows.
“The fragility of the global economy, the relatively low commodity prices, policies to curb tax-inversion deals and the decline in the profitability of multinational companies are among the main reasons for such expectations,” he said.
Notwithstanding, for transition economies, flows are expected to increase by 10 percent to 15 percent, totaling between 37 and 47 billion USD.
Sulstarova then turned to this year's WIR special topic, investor nationality, which has come to the forefront as companies “have multiple passports” that bypass countries’ restrictions limiting the access of foreign companies to certain sectors.
To deal with this problem, the report sets forth policy recommends policies at both national and international levels. For local governments, the WIR suggests the improvement of disclosure requirements and the inclusion of a “fit-for-purpose” test.
“Global initiatives to adopt a common set of criteria and a common approach to identify the origin of investors are required,” Sulstarova said.