Recently, the World Investment Report 2023 was released by UNCTAD.
Key points
- Foreign Direct Investment (FDI) in developing countries in Asia remained flat at $662 billion during 2022, as compared to the previous year, despite clocking about half of global inflows.
- Developing countries clocked higher in incoming FDI compared to developed economies.
- However, overall global FDI declined by 12% to $1.3 trillion in 2022 after a strong rebound in 2021 following the steep drop induced by the coronavirus pandemic in 2020.
- Among the developing countries in Asia, incoming FDI was highly concentrated in a few countries, namely, China (and Hong Kong), Singapore, India, and United Arab Emirates (UAE), which together accounted for about 80% of inflows into the region.
- During 2022, FDI inflows to India rose by 10% on an annual basis to $49 billion, while China registered a 5% yearly growth to $189 billion.
- Singapore and UAE grew by 8% and 10% to $141 billion and $23 billion, respectively.
- Meanwhile, developing countries, including India, which have attracted FDI in clean energy to the tune of $544 billion in 2022, need renewable energy investments to the tune of $1.7 trillion annually.
- So far, much of the growth in international investment in renewable energy, which has nearly tripled since the adoption of the Paris Agreement in 2015, has been concentrated in developed countries.
