Luxembourg and Spain, both major recipients of FDI in 2003, received lower FDI inflows last year.

Net outflows have significantly offset the benefits derived from FDI inflows.

Each of the developing regions experienced an increase in FDI inflows in 2004.

One of the objectives of NEPAD is to attract high and stable inflows of FDI.

However, Mexico recorded a strong recovery in FDI, and inflows into Brazil are picking up again.

Although a marked liberalization, and deregulation and privatization policies, had been implemented, FDI inflows to Africa as a proportion of total developing country inflows had declined.

FDI inflows into developed countries fell by an estimated 16 per cent to 321 billion in 2004.

UNCTAD's efforts to help developing countries raise FDI inflows were commendable, and its work in this context should continue.

Likewise, FDI inflows have been expanding only in resource intensive sectors, while falling in services and practically stagnating in manufacturing.

Investors are returning, and FDI inflows this fiscal year are set to exceed the 25 billion received in 2007 08.

FDI inflows had become significant in Benin only after the establishment of a market oriented economy in the late 1980s.

The Libyan Arab Jamahiriya will significantly increase its FDI inflows as a result of the end of sanctions in 2003.

But this Chinese FDI is bundled together with concessional loans, and there is much double counting, with the same ventures being recorded both as aid flows and as inflows of FDI.

Following three years of decline, global FDI inflows are estimated to have increased by 6 per cent in 2004 to some 612 billion. This increase is related mainly to inflows into developing

Portfolio flows and foreign direct investment (FDI) posted the strongest growth, accounting for more than two thirds of total private inflows.

However, FDI inflows remained highly concentrated in four oil exporting African least developed countries Angola, Chad, Equatorial Guinea and the Sudan.

However, even in economies where FDI inflows have been significant, it has not been the exclusive leader of the industrial restructuring process.

As shown in table 2, over the past six years there have been fairly regular but volatile net inflows of FDI into Africa.

While the strategy of taking advantage of FDI inflows had been successful in other developing countries, this had not been the case in Africa.

These countries are being denied a useful tool for attracting FDI, with recent evidence suggesting that signing a BIT by itself does not lead to increased inflows.

The fiscal impact of FDI was slight, and the inflows had not been able create jobs, establish linkages with the rest of the economy and transfer technology.

Following the temporary decline of the 2003 level to 27 billion, FDI inflows to CEE were at an estimated 36 billion in 2004, reaching a record high.

He noted that even though FDI inflows into Africa had increased in 2003 and 2004, most of this increase was accounted for by investment in natural resources exploitation.

High prices for key commodities are expected to encourage TNCs to pursue new exploration projects in African countries, which will lead to sustained high levels of FDI inflows.

In that context, a non distortionary incentive system (including transparent tax policies), as well as legal and regulatory reforms, are important factors in inducing accelerated inflows of FDI.

FDI and technology inflows are not only to be seen in terms of individual contracts but also in terms of the creation of a national capability to access such inflows and utilize them effectively so as to secure a return for all parties involved.

However, as the resource base of these economies in transition is generally adequate, once their structural constraints are overcome appropriate policy inducements are likely to stimulate sizeable FDI inflows.

Source UNCTAD, FDI TNC database (www.unctad.org fdi statistics).

The portion of capital inflows that is not re exported represents net capital inflows.

The other major advantage of such regional groupings has been their ability to attract foreign direct investment. Since the early 1990 s, Mercosur has managed to mobilize 5.9 of world FDI inflows.

For example, total 2004 FDI inflows into sub Saharan Africa, a region that contains many of the world's least developed countries (LDCs), accounted for less than 3 per cent of the world total.

In order to attract the FDI needed to achieve this, southern African countries have enacted laws aimed at encouraging greater private sector participation, with special emphasis on foreign investment. But, despite these efforts, FDI inflows in the region (excluding South Africa) remain too low to have a significant economic impact.

FDI and Development Policy Issues Related to the Growth of FDI in Services

Beware of FDI Protectionism

The global FDI environment

Without FDI, there cannot be development and, without legal security, there will be no FDI.

FDI And Development The Case of Privatization Related Services FDI Trends, Impact and Policy Issues

The Benefits of Chinese FDI

Emerging FDI from developing countries

The global FDI environment 3

Outward FDI from developing countries

Source UNCTAD, FDI TNCs database.

The investment climate and FDI

G. Support for FDI flows

In the case of ASEAN, intraregional FDI accounts for close to one fifth of the total FDI.