Putting it to Work in Developing Countries - Nathan Associates

More documents

Recommendations

Info

Figure 3-2 Estimated Share of Sources of FDI Inflows to the Developing World, 2003 High-income, non-OECD Countries 18% Developing Countries (South-South FDI) 37% High-income, OECD Countries 45% Note: Based on 35 countries that account for 85 percent of total FDI flows to developing countries (economies classified as low or middle income by the World Bank). SOURCE: World Bank, Global Development Finance 2006, Volume I, p. 111. 523,000 people and an oil-sector-induced FDI inflow of $1.9 billion in 2005, recorded an estimated per capita FDI of $3,676 for the year, the developing world’s highest figure. DISTRIBUTION BY COUNTRY INCOME LEVEL FDI is often described as a source of capital for mainly middle-income countries, meaning that low-income countries need to look elsewhere to finance development. This generality bears a closer look (Appendix Table A-1). The 95 countries categorized as “middleincome” by the World Bank receive more than 90 percent of FDI inflows to the developing world (Figure 3-3). But when this category is divided into “lower middle-income” and “upper middle-income,” it becomes clear that for the last 15 years, half or more of all FDI flows were consistently directed to economies with a present per capita GNI of $3,465 or less (the ceiling for lower middle-income countries). The importance of Southeast Asia’s lower middle-income economies—Thailand, Indonesia, Philippines— in attracting FDI inflows in the mid-1990s plus the growing dominance of China as an FDI magnet leads to this result. The pattern was broken only briefly in the late 1990s by the wave of large-scale Latin American privatizations and M&As in services and banking, led by Brazil, Mexico and Argentina, all middle-income economies. On the other hand, the very poorest countries receive relatively little FDI. Using the UN’s list of 50 “least developed countries” (LDCs) 8 as the standard, over the last five years, these poorest economies have together hosted only between $7 billion and $11 billion in FDI inflows annually, or about 4 percent of all FDI inflows to the developing world. Here again, FDI receipts are concentrated. Resource-seeking petroleum-sector FDI inflows to only four LDCs—Angola, Chad, Equatorial Guinea, and Sudan—made up 57 per 28
Table 3-2 Top Developing Country Recipients of FDI, 2000 and 2005, and FDI Per Capita and as a Percent of GDP 2000 2005 Income FDI Income FDI Recipients Classification ($ billions) Recipients Classification $ Billions Per capita ($) % GDP All Developing 182.2 All Developing 285.1 Top 10 Top 10 China LMI 40.7 China LMI 72.4 56 3.3 Brazil LMI 32.8 Mexico UMI 18.1 175 2.3 Mexico UMI 17.6 Brazil LMI 15.1 81 1.9 Argentina UMI 10.4 Russian Fed. UMI 14.6 102 1.9 Poland UMI 9.3 Czech Republic UMI 11.0 1078 8.9 Czech Republic UMI 5.0 Colombia LMI 10.2 224 8.3 Chile UMI 4.9 Turkey UMI 9.7 133 2.7 Venezuela UMI 4.7 Ukraine LMI 7.8 166 9.6 Malaysia UMI 3.8 Poland UMI 7.7 202 2.6 India LI 3.6 Hungary UMI 6.7 664 6.1 Total 132.8 Total 173.2 % of Dev. Country Total 72.9 % of Dev. Country Total 60.8 Next 10 Next 10 Thailand LMI 3.4 Chile UMI 6.7 409 5.9 Hungary UMI 2.8 India LI 6.6 6 0.9 Russian Fed. UMI 2.7 Romania UMI 6.4 295 6.5 Colombia LMI 2.4 South Africa UMI 6.4 141 2.7 Philippines LMI 2.2 Egypt LMI 5.4 73 5.8 Slovakia UMI 1.9 Indonesia LMI 5.3 24 1.9 Nigeria LI 1.3 Argentina UMI 4.7 120 2.6 Viet Nam LI 1.3 Malaysia UMI 4.0 157 3.0 Kazakhstan LMI 1.3 Thailand LMI 3.7 57 2.2 Egypt LMI 1.2 Nigeria LI 3.4 26 3.4 Total 21 Total 52 % of Dev. Country Total 11.3 % Dev. Country Total 18.4 Note: Includes only economies classified as low or middle income by the World Bank (2005 per capita GNI of $10,725 or less). Income groups are defined according to per capita gross national income in 2005: low income, $875 or less; lower middle income, $876–3,465; upper middle income, $3,466–10,725; high income, $10,726 or more. SOURCES: UNCTAD, World Investment Report 2006 for data on FDI inflows; World Bank, World Development Report 2007 for country classifications. 29
Page 1: FOREIGN DIRECT INVESTMENT PUTTING I
Page 4 and 5: Sponsored by USAID’s Bureau of Ec
Page 6 and 7: 5. Attracting FDI 55 What Foreign I
Page 9: PREFACE Trade and foreign direct in
Page 12 and 13: • Strengthening competition and e
Page 14 and 15: 15 years is mixed at the industry l
Page 16 and 17: asis of careful country-by-country
Page 18 and 19: esources, including Internet addres
Page 20 and 21: Figure 1-1 Net Total Resource Flows
Page 22 and 23: Singapore’s Rise and FDI Througho
Page 24 and 25: FDI BY FINANCIAL COMPONENT A foreig
Page 27 and 28: 2. THE CASE FOR FDI International b
Page 29 and 30: The Global Factory—Catalyst for E
Page 31 and 32: countries through mergers and acqui
Page 33 and 34: conditions and policies in host cou
Page 35 and 36: labor market structure and flexibil
Page 37 and 38: and distributors and to invest in e
Page 39 and 40: 3. TRENDS AND PATTERNS IN FDI FLOW
Page 41 and 42: 3. A wave of international corporat
Page 43: undo improvements in investment cli
Page 47 and 48: Three Global Variables in FDI Flows
Page 49 and 50: help maintain and perhaps even add
Page 51 and 52: shot up to almost $16 billion in 20
Page 53: tions and finance, including recent
Page 56 and 57: Table 4-1 Sector Distribution of Es
Page 58 and 59: Table 4-2 Estimated Developing Coun
Page 60 and 61: Figure 4-2 Selected Service Industr
Page 62 and 63: traditional clients more cost-effec
Page 64 and 65: Figure 4-5 Selected Manufacturing I
Page 66 and 67: countries or the Morocco-U.S. FTA w
Page 68 and 69: PRIVATE INFRASTRUCTURE DEMAND Robus
Page 70 and 71: eported to be a source of FDI throu
Page 72 and 73: But, in addition to these commercia
Page 74 and 75: Exhibit 5-1 Selected Investment Sco
Page 76 and 77: Exhibit 5-2 Selected Investment Cli
Page 78 and 79: Ultimately, governments must make f
Page 80 and 81: expedite approvals. Otherwise the a
Page 82 and 83: Where governments deem incentives n
Page 84 and 85: services in this phase involve one-
Page 87 and 88: 6. INTERNATIONAL AGREEMENTS AND INS
Page 89 and 90: FREE TRADE AND REGIONAL INTEGRATION
Page 91 and 92: 1998. 11 But many advocates, partic
Page 93 and 94: Encouraging Local Supply Links: Car
Page 95 and 96:
International Finance Corporation.
Page 97:
specific decisions to invest but do
Page 100 and 101:
4. Some FDI already flows to every
Page 102 and 103:
following priorities recognize thos
Page 104 and 105:
on creating regulatory systems that
Page 107 and 108:
ENDNOTES CHAPTER 1 1 United Nations
Page 109 and 110:
in Empirical FDI Studies,” in Doe
Page 111 and 112:
25 See Koji Miyamoto, “Human Capi
Page 113 and 114:
5 WIR 2004, p. 150, for a descripti
Page 115 and 116:
Countries—The Importance of ICT a
Page 117 and 118:
equirement to export a certain prop
Page 119:
APPENDIX A Data on FDI Flows and St
Page 122 and 123:
Table A-2 Estimated Value of Inward
Page 124 and 125:
Table A-3 Estimated Distribution of
Page 126 and 127:
Table A-4 Developing Countries' Sha
Page 128 and 129:
Resource and Availability UNCTAD. 2
Page 130 and 131:
Resource and Availability Descripti
Page 132 and 133:
Resource and Availability UNCTAD. 2
Page 134 and 135:
Resource and Availability Moran, Th
Page 136 and 137:
Resource and Availability World Ban
Page 138 and 139:
Business linkages. Supplier-produce
Page 140 and 141:
Investment promotion agency (IPA).
Page 142 and 143:
Subnational investment promotion. A
show all

Putting it to Work in Developing Countries - Nathan Associates

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?