Last year the inflow of foreign direct investment in CIS countries and Georgia has doubled and reached 63 billion dollars. This is stated in the latest report of the UN Conference on trade and development (UNCTAD). In Russia, foreign investment has tripled.
Globally, according to experts, this indicator remains at a low level, and still has not reached pre-crisis values. However, the rapid development of digital technology provides a modest growth, which causes the authors of the report “cautious optimism”. In an interview with the news Service of the UN told Secretary-General of UNCTAD Muhith Kituyi.
The rapid development of digital technologies has a significant impact on global investment flows. Digital multinational corporations attract and invest a lot of money. While 75 of the 100 leading corporations in this field are concentrated in three countries — the US, UK and Germany, and ten of 11 online platforms are in the USA. The main recipients of direct investments in the past year were China, USA and UK. Says Secretary-General of UNCTAD Muhith Kituyi.
China is both a source and recipient of investment, the U.S. is still strong, followed by the UK. However, we’re talking about trends, which were observed to BREXIT (the process of a British exit from the EU). What impact this process will have on the situation, it is difficult to say”.
The situation in developing countries remains uncertain.
“We see that the fall in the price of raw materials continues to have a negative effect on the flow of investment to developing countries, especially those dependent on commodities. Some recovery in the market of raw materials gives us optimism. While the geopolitical situation in the middle East remains a source of uncertainty.”
E-trade, according to experts, opens up new opportunities for people in developing countries, contributing to the development of small business — people can receive and send money with phones.
“We at UNCTAD attach great importance to the development of electronic Commerce. It is the fastest growing form of global trade. Over the last three or four years, the volume of electronic trade has grown five times faster than traditional commercial transactions.”
The volume of foreign direct investment in CIS countries and Georgia in the past year doubled and reached 63 billion dollars. Only in Russia this figure had tripled to 38 billion. This is due to higher-than-expected economic performance and a certain stabilization of oil prices. However, it is still two times less than in 2008. UNCTAD experts evaluate not only the volume but also the quality of investments around the world.
“Of course, we are seeing most of the investment in mergers and acquisitions, investment in new businesses in the green economy is growing more slowly. We in UNCTAD have supported the implementation of sustainable development Goals. We believe that an investment in a “green” economy leads to the emergence of new opportunities and development of infrastructure more than mergers and acquisitions, which sometimes represent not the creation of new capital and changes in income related to peculiarities of tax legislation in the country”.
Prospects of foreign direct investment in the former Soviet Union, according to the authors of the report, “moderately optimistic”. The strategy of import substitution in Russia can contribute to the emergence of “new players”, but we are talking more about local producers. As pointed out by UNCTAD experts, new opportunities for foreign direct investment in Russia and Ukraine may arise from the privatization process.