Top 3 Countries To Invest In Next 3 Years, According To The U.N.
INVESTING | 7/05/2012
China, the United States and India, in that order, will be the hottest countries for corporations to invest in over the next three years, according to a 200+ page report by the United Nations Conference on Trade and Development, released this week.
UNCTADs World Investment Report 2012 said that the $1.5 trillion of global foreign direct investment (FDI) exceeded pre-financial crisis levels in 2011, but the recovery is expected to level off this year to an estimated $1.6 trillion.
Despite record cash holdings, multinational corporations have yet to convert available cash into new and sustained FDI, and are unlikely to do so while instability remains in international financial markets. Even so, half of the global total will flow to developing and frontier economies in Africa and the Middle East.
China continued to be in the top spot as investors preferred destination for FDI. Foreign direct investment flows to China reached a record level last year of $124 billion, and flows to the services sector surpassed those to manufacturing for the first time.
Multinational companies that respond to the survey have increasingly ranked developing-country host regions as highly important places to be investing in the next three years. Developing Asia scores particularly well, with 64 per cent of respondents rating East and South-East Asia as very or extremely important and 43 per cent giving the same rating to South Asia. The rising importance of these regions as destinations for FDI does not come at the expense of developed regions. The survey results suggest that the European Union and North America remain among the most important regions for FDI by big corporations.
The importance of developing regions to multinationals as locations for international production is also evident in the economies they selected as the most likely destinations for their FDI in the medium term. Among the top five, four are developing economies, with China, U.S. and India in the top three destinations of choice. Indonesia rose into the top five to number four and Brazil is at number five, dropping down a notch.
In 2011, multinational companies invested around $420 billion in the E.U., $226.9 billion in the U.S. and $123.9 billion in China. India received around $31.5 billion in FDI, less than Russia ($52.8 billion) and Brazil ($66.6 billion).
Krinvanto Vishwam Aryam
(Make this World Noble)