Investment outlook subdued: UNCTAD chiefListen / The road to global investment recovery remains bumpy, with investors reluctant to expand their businesses in the face of widespread economic fragility and policy uncertainty.
The warning comes from UNCTAD Secretary-General Mukhisa Kituyin during the International Investment Forum (IIF) of the 17th China International Fair for Investment and Trade (CIFIT), taking place in Xiamen.
Dr. Kituyi said skittishness about the investment environment means that US$6 trillion remain idle on corporate balance sheets.
He said “This is capital …. that we would rather see invested in productive capacity to spur economic activity that can help propel us out of economic sluggishness and thereby get more people back into jobs”.
The UNCTAD chief said countries should strive to provide policy certainty to get investment flowing again, adding “There is a need to boost investor confidence.”
Dr. Kituyi noted that despite the gloomy investment outlook, there have been positive developments. He pointed out that in 2012, developing countries, for the first time ever, attracted more foreign direct investment (FDI) than developed countries, receiving 52 per cent of total FDI flows.
He said these flows were important, as they can help stimulate technology and skills transfers and create employment. He stressed that it is imperative to steer such investment towards sustainable development outcomes.
According to the UNCTAD World Investment Report, global foreign direct investment (FDI) contracted by 18 per cent in 2012.
Donn Bobb, United Nations.