The Importance of Educating the Public on the benefits of international investment: –
Over the last quarter century, foreign investment has accelerated at a breathtaking pace and shifts in the flow of this investment are now reshaping the global economic landscape. We have seen inward foreign direct investment stock roughly triple worldwide over the past decade — and that holds true for developing countries as well as developed economies.
Today more than 80,000 multinational corporations (MNCs) are operating worldwide with more than 800,000 foreign affiliates – compared to 37,000 multinational corporations and 170,000 foreign affiliates active in 1993. Foreign investors not only bring fresh capital, technology, competitive spirit and ideas to new markets; they also bring jobs. They employ nearly 80 million people worldwide, a figure that is roughly twice the size of Germany’s labor pool – and one that has quadrupled over the past three decades. These foreign affiliates also point to a deeper level of economic integration among nations. They show a purpose and commitment beyond one-time sales or market entry into well-established trade patterns. Investment not only drives jobs and innovation, but it also increasingly drives trade.
FDI flows also are the vital currents that can help restore global economic growth. We have already seen trade flows come back after the recent global recession. And the WTO estimates that trade will be up by nearly 10 percent in 2010 over the prior year. FDI, however, may not rebound at the same pace: UNCTAD is predicting only a modest and uneven recovery in global FDI this year of $1.2 trillion, after registering a little over $1.0 trillion in 2009, from $1.7 trillion in 2008. Global FDI flows fell very sharply in large part because of a substantial drop in cross-border merger and acquisition activity, due largely to more difficult financing conditions arising from the financial crisis. However, FDI flows have historically been less volatile than portfolio investment. As a relatively stable form of international capital flows that spurs growth and diversifies risk around the world, FDI can help foster global economic recovery.
We are well into an age when many of our most daunting challenges are global, and greater levels of foreign investment will be necessary to overcome many of them: achieving global food security; mitigating climate change; defeating violent extremism; and, improving conditions for the one-third of the world’s population that lives in circumstances that offer little opportunity to create a better tomorrow for themselves or future generations.
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