ESCWA and the UN Information Centre (UNIC) in Beirut launched the 2009 World Investment Report issued by the UN Conference on Trade and Development-Geneva. UNIC Director Bahaa ElKoussy presented the report, entitled "Transnational Corporations, Agricultural Production and Development", followed by Khaled Hussein, First Economic Affairs Officer at the ESCWA Economic Development and Globalization Division (EDGD), who gave an overview of the report's main findings.
ElKoussy said the report tackles the most recent regional and international statistics on Foreign Direct Investment (FDI) and analyzes them in the economic development context. "In the midst of a sharp financial and economic crisis, international FDI flows declined by a great extent in 2008, and continued to slide in 2009. However, a slow recovery is expected to take place in 2010."
He noted that "a major contributing factor to the decline in global FDI flows has been growing divestments by Transnational Corporations (TNCs) worldwide. Cross-border mergers and acquisitions- a major source of growth of FDI in previous years- declined considerably as financial markets seized up in the second half of 2008."
Hussein presented the conclusions of the report on the global and ESCWA levels. He said "FDI dropped globally by 15 per cent in 2008. The crisis has changed the FDI landscape, with a surge in developing and transition economies' share in global FDI flows to 43 percent in 2008. FDI inflows to developing economies rose to US$ 621 billion. This change is partly due to the large decline in FDI inflows to developed countries, which in 2008 shrank by 29 percent to US$ 962 billion, compared with their level of the previous year."
Regarding ESCWA countries, "developmental projects were dealt a blow following the international tightening of credit markets and the recession of the global economy, especially since the third quarter of 2008. The report revealed that the number of international banks able, or willing, to finance projects in the ESCWA region, has decreased to a great extent. This has resulted in canceling or postponing major oil and gas-related projects or industrial and infrastructure projects, which could have resulted in a decline in FDI to the region early 2009"
He added that the foreign share in agriculture is increasing, and could play an important role in developing countries' agricultural production, namely since these countries are in desperate need of private and public investment to raise their productivity level and further support their agricultural sectors. The report shows that the foreign share in agriculture can take several forms, the most important of which being FDI and contract farming.
