FDI flows in services between developing countries are growing faster than flows between developed and developing countries.

Flows to developing countries appear to lead the recovery in global FDI.

Currently, the US receives only about 2 3 of FDI flows from China.

Meanwhile, FDI flows bounced back in the United Kingdom and the United States.

FDI represents a highly significant level of financial flows from developed to developing countries.

The private sector is becoming the main source of FDI flows to developing countries.

Another area requiring special attention is that of foreign direct investment (FDI) flows to Africa.

Regional integration in ASEAN had encouraged intra ASEAN investment, which contributes to South South FDI flows.

The developed world still accounts for nine tenths of world outward FDI flows, but FDI from developing countries has shown higher growth rates in the recent past.

To be sure, the US remains the world s leading destination for FDI, accounting for 15 of global flows.

But this Chinese FDI is bundled together with concessional loans, and there is much double counting, with the same ventures being recorded both as aid flows and as inflows of FDI.

Its findings were quite sobering the African continent received very low levels of FDI flows, mostly in the extractive sectors.

Portfolio flows and foreign direct investment (FDI) posted the strongest growth, accounting for more than two thirds of total private inflows.

Overall, however, the impact of FDI on Benin's economy had been relatively small due to the limited size of the flows.

Africa s share of global flows of foreign direct investment (FDI) also fell, from 1.8 in 1986 90 to 0.8 in 1999 2000.

Overall, FDI flows are expected to increase over the medium term because of improvements in the main fundamentals that drive FDI a broad based economic recovery, equity market valuations and mergers and acquisitions (M As) activity.

Privatizations had been the main engine behind the FDI flows, though the dependence upon too few investing countries had not permitted proper differentiation.

In October 2004, the Government of South Africa took further steps to facilitate outward FDI by abolishing exchange control limits on such flows.

This said, FDI is only one of several sources of private capital flows that could benefit Africa, as demonstrated in table 2 below.

FDI flows to Asia and the Pacific reached an estimated 166 billion, which suggests a 55 per cent increase over the level in 2003.

Leading problems faced by developing countries, especially least developed countries, in compiling statistics on FDI flows and stocks and on the activities of TNCs

Third, as had already been mentioned, FDI flows were concentrated in regions that had the necessary infrastructure in place and dynamic manufacturing and industrial sectors.

Most developing country micro enterprises operated outside legal frameworks, but the assets of these enterprises were greater than the FDI flows to some developing countries.

FDI flows from India, which ranked 61 on the Outward FDI Performance Index 2001 2003, have accelerated sharply in the past two years as the Government has eased restrictions and the country's software and call centre companies have expanded abroad.

Some estimates suggest that South South FDI flows grew from less than 5 billion in 1994 to over 50 billion in 2000 (Aykut and Ratha, 2004).

The flows and impact of FDI should, therefore, be among the criteria for evaluating progress in goal 8 in the context of the right to development.

(c) Reduce barriers to long term, non debt creating capital flows, especially FDI, and the costs to migrants of sending their remittances through sanctioned institutional channels.

Its asset coverage was estimated to be 1.4 billion a year and was expected to grow after a slow year of FDI flows to developing countries.

South South FDI flows have been motivated by push and pull factors, and similar structural, cyclical and policy factors similar to those between developed and developing countries.

In 2003, the 31 landlocked developing countries received in total about 8 billion in foreign direct investment (FDI) or 1.4 per cent of total world inward flows.

Despite increases in FDI globally from 15 billion in 2003 to 20 billion in 2004, Africa's share in global foreign direct investment flows remains only 3 per cent.

The preponderance of small sized economies and the creation of economic space for investors and entrepreneurs remain an important challenge in attracting large flows of foreign direct investment (FDI).

The continent had been not enjoyed the benefits brought about by globalization, as manifested in its shares the lowest of all in global FDI, trade, financial flows and global GDP.

Source UNCTAD, FDI TNC database (www.unctad.org fdi statistics).

If we are to see truly global FDI flows, particularly to those countries that need them the most, we must begin to address the institutional deficiencies of the investment protection regime.

Similarly, sustainable, long term capital flows, particularly greenfield FDI, are primarily attracted to countries that have already achieved rapid economic growth and steady improvements in human and physical infrastructure Thus, for those with a robust investment dynamic in both physical and human capital, trade and FDI can reinforce an established virtuous growth circle.

The outlook for 2006 was also bullish, with preliminary data for the first quarter indicating that FDI flows had already reached US 14 billion, up from US 7.4 billion in the year earlier period.

The representative of the Democratic Republic of the Congo, speaking on behalf of the Group of 77 and China, noted the substantial increase in FDI flows in 2004 and in the share received by developing countries.

Emerging market large companies growing global clout is reflected in flows of foreign direct investment. As recently as 2001, only 5 of outward FDI came from non OECD countries by 2011, that share had soared to 21 .

Given that services now account for the largest share of FDI flows into many countries and that this trend is likely to continue, it is crucial to put in place policies that maximize benefits and minimize costs.

Without FDI, there cannot be development and, without legal security, there will be no FDI.

Beware of FDI Protectionism

The global FDI environment

Luxembourg and Spain, both major recipients of FDI in 2003, received lower FDI inflows last year.

Private sector capital flows now dwarf traditional public sector aid flows.