Report calls for shifts to channel foreign investment towards job growth, broadening economies of poor countries | UNCTAD


Geneva, Switzerland, 2 May 2011

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Although investment in the least developed countries has climbed, the analyze says, it has limited impact on jobs, be standards Geneva, 2 May 2011 – A new UNCTAD report on the status of foreign steer investment ( FDI ) in the world´s 48 hapless countries urges a change approach that would focus such investment on creating jobs, ampere well as on enhancing those countries´ productive capacities – that is, their abilities to produce wider varieties of goods and more sophisticated goods.

The composition, titled Foreign Direct Investment in Least Developed Countries: Lessons Learned from the Decade 2001-2010 and the Way Forward, is intended to contribute to debate at the Fourth United Nations Conference on the Least Developed Countries ( LDCs ) adjacent workweek in Istanbul. It notes that while FDI to these nations grew quickly over the ten to reach an calculate $ 24 billion in 2010 and their contribution of global foreign investment flows has efficaciously doubled to 2 %, most in terms of respect was dedicated to natural-resource extraction. That sector has tended to create relatively few jobs, the study says. such investment besides has not tended to “ fertilize ” LDC economies by leading to greater links between foreign businesses and local firms that can spread know-how and technology and help spur broad-based, long-run economic growth. Although FDI has recently enabled some LDCs to connect with the global value chain in which products are upgrade and reap higher profits, the majority of LDCs remain marginalized from the world economy, the report says. Among other things, the study recommends the administration of an “ LDC infrastructure development fund ” that would improve these countries´ abilities to attract investment by upgrading such factors as electricity provision, roads, railroads and calculator or Internet connections. Such a fund would seek to provide “ innovative ” solutions to infrastructure weaknesses by establishing public-private partnerships between LDCs and alien investors. It besides calls for an aid-for-productive-capacities plan that would support technical and vocational educate, department of education and entrepreneurship in LDCs. The purpose is to provide LDC populations with skills that can attract foreign investment and spur sustainable economic progress. The report recommends that LDC governments and abroad development partners boost efforts to attract small- and medium-scale external investors – a group that frequently finds and exploits concealed occupation opportunities. It says that LDC governments should develop strategies and provide incentives to target opportunities where investors can use technology to “ leapfrog, ” as is already happening in telecommunications with the rapid development of mobile telecommunication networks and with accessory services such as mobile earphone bank or payment services in rural areas.

There is a electric potential for business people to get involve further in investment by undertaking projects that aim to solve social and environmental challenges, the study says. The report besides calls for governments to implement regulative reforms that can help channel FDI in directions that should act to improve living standards, produce jobs and broaden the economic bases of LDCs. The reputation features detailed FDI-related data on all 48 LDCs. It contains annexes and aggregate data on FDI trends. ANNEX

Tables and figures FDI inflows to LDCs and their share in world inflows and developing-country inflows, 1986-2010
( billions of dollars and share )

FDI inflows to LDCs and their share in world inflows and developing-country inflows, 1986-2010 (billions of dollars and percentage)
source : UNCTAD, FDI/TNC database ( www.unctad.org/fdistatistics ).
Note: Data for 2010 are estimates. Private capital flows to LDCs, 2001-2010
( billions of dollars )

Private capital flows to LDCs, 2001-2010 (billions of dollars)
source : UNCTAD, FDI/TNC database ( www.unctad.org/fdistatistics ) ( for FDI inflows ) and IMF ( for portfolio and other investments ).
Note: Data for 2010 are estimates. other investment includes chiefly bank lend .

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