UN World Investment Report 2010 - Office of Trade Negotiations

CHAPTER II Regional Trends in FDI 73
already-signed agreements on trade in goods and
services, completed the negotiation process of
CAFTA, effective as of 1 January 2010. It can be
expected to further promote two-way FDI flows
between China on the one hand and ASEAN
member States on the other. (Source: Xinhua
News Agency, Economic Information Daily, http://
www.jjckb.cn/wzyw/2010-01/04/content_200697.
htm.)
17 Source: James Lamont, “Huawei in $500m India
outlay”, Financial Times, 10 January 2010.
18 TNC participation in infrastructure (including
electricity, telecommunications and transport) has
surged in the region. From the recipient perspective,
FDI has become a key source of financing
for telecommunications in some countries in the
region (WIR08).
19 For instance, in the area of trade, the so-called
“triangular trade” (that among the United States,
China and other East Asian economies) through
China has acted as a primary growth engine for
the region (Kuroiwa et al., 2009).
20 For a number of economies in East and South-
East Asia, the problem is one of over-reliance on
exports to developed-country markets, as well as
insufficient domestic consumption. The global
imbalance is exemplified by the current trade
relationship between China and the United States.
A similar situation existed between Japan and the
United States in the 1980s, and led to significant
FDI flows from the former to the latter by the end
of 1990s.
21 The crisis relates to Dubai World, which is a
holding company owned by the Government of
Dubai. The group has a central role in the direction
of Dubai’s economy. It manages some 90
entities that expand beyond its home country and
region. In November 2009, Dubai World asked
to delay for six months payment on $26 billion
of debt, which shook the confidence of investors
holding the Government’s debt, and caused the
downgrading of the credit ratings for several
government-related entities in Dubai.
22 French GDF Suez acquired the natural gas distribution
company Izmit Gaz Dagitim for $600 million,
and Czech power company CEZ purchased
the electricity distribution company Sakarya
Elektrik Dagitim for $408 million.
23 “Qatar and its emir: he’ll do it his way”, The
Economist, 27 May 2010.
24 These are Brazil, Chile and Mexico that together
attracted 44 per cent of total FDI inflows to the
region in 2009.
25 In the case of the Chilean retail sector, however,
outward FDI increased in the last few years
without State intervention. Strong pro-market
institutions in Chile helped in the process of internationalization
of this highly competitive and
unregulated sector (Finchelstein, 2009).
26 This is the case for instance with companies like
Argentina’s Techint and Arcor; Brazil’s Petrobras,
Vale (CVRD), Embraer, Gerdau, Votorantim, and
Camargo Correa; and Mexico’s Cemex, FEMSA,
Alfa, Gruma, Bimbo and Mexichem.
27 Finchelstein, 2009; Lima and de Barros, 2009;
“Brazil and investment”, The Economist, 12 November
2009; and “Credit: BNDES to support
internationalization of Brazilian businesses”,
Investimentos e Noticias, 17 February 2010.
28 The Bank for International Settlements estimated
that Brazilian companies lost $25 billion in
these transactions, whereas Mexican companies
lost $4 billion (The Boston Consulting Group,
2009).
29 FDI flows from Cyprus, a major home for roundtripping
FDI, decreased from $20 billion (or 27
per cent of the total) in 2008 to $5.7 billion in
2009.
30 Banking supervision reports (Croatia National
Bank and National Bank of Serbia).
31 Banking supervision reports (Central Bank of
Albania, National Bank of the former Yugoslav
Republic of Macedonia and National Bank of
Serbia).
32 The results of a cross-sectional econometric
estimation of cross-border lending flows in the
last quarter of 2008 indicated that foreign bank
ownership was a highly significant predictor
of smaller net outflows (a 10 percentage point
increase in foreign ownership of banks reduced
the net outflow of cross-border loans by 1.4 percentage
points) (EBRD, 2009).
33 “Hypo will Aufschub für Sanierungsplan”, Wirtschaftsblatt,
11 March 2010 (www.wirtschaftsblatt.at/archiv/411940/index.do).
34 In the face of the financial crisis, international
institutions (including the EBRD, the IMF and the
European Commission) initiated a process aimed
at addressing the systemic risk in selected countries
of the region. The initiative took the form of
financial support (of €52 billion) to parent banks
recapitalizing subsidiaries when necessary while
broadly maintaining exposure to countries.
35 This suggestion is also confirmed by the findings
of the latest EBRD report (EBRD, 2009).
36 Including, among others, the following: Sinopec
(China) through its Mirror Lake Oil & Gas Co
Ltd. bought the Swiss Addax Petroleum Corp.
for $7.2 billion; International Petroleum Investment
Co. (United Arab Emirates) acquired a
37.5 per cent stake of Ciá Española de Petròleos
(Spain) for $4.4 billion; and Korea National Oil