An Overview
FDI growth has outpaced that of world trade rising from a manual average of $20 billion in 1983-1988 to about $100 billion in the mid 1990s. Formerly, flows of private capital into the third world was at a minimum. Development assistance had to be sought from institutions such as the World Bank, the IMF and through bilateral agreements.
However global capital flows to developing countries have dramatically declined from $295 billion in 1995 to $200 billion in 1997 and are projected at $172 billion in 1998.
This is because transnational companies (TNCs) are looking for competition and profit. Their capital is extremely mobile. Any doubt about the economic stability of a government’s commitment to a certain policy may cause an exodus outflow of capital whether domestic or international. This might affect the volume of FDI in developing countries.
 
 


Illustrative Tables and Figures


Foreign Direct Investment by Geographic Region , Net Inflows (% of GDP)
Regions 1984 1989 1994 1999
Latin America &Caribbean 0.62 0.81 1.82 4.96
Middle East &North Africa 1.29 0.26 0.76 0.59
East Asia &Pacific 0.62 1.36 4.4 3.35
South Asia 0.04 0.13 0.37 0.54
Europe &Central Asia 0.12 0.11 0.89 3.28
European Monetary Union 0.43 0.96 0.77 3.09
World 0.52 1 0.92 3.1

Source: Chan, K. and Edward R. Gemayel (2003)


Net Capital Flows to Developing Countries (US $billions)
Regions 1984 1989 1994 1999
Latin America &the Caribbean 12.5 28.15 74.3 30.5
Middle East &North Africa 0.6 1.35 6.9 2.85
South Asia 2.2 4.95 10.7 4.41
East Asia &Pacific 19.3 43.47 108.7 44.61
Europe &Central Asia 9.5 21.4 31.2 12.8
Sub-Saharan Africa 0.3 0.68 11.8 8.84
Total 44.4 100 243.8 100

 

Source: Onyeiwu, S. (2003)

FDI Inflows to Developing Countries 1990

Source: Onyeiwu, S. (2003)
 

FDI Inflows to Developing Countries 1996

Source: Onyeiwu, S. (2003)
 

Related Links
► Shatz, Howard J. and Anthony J. Venables(2000) "The Geography of International Investment" Working Paper. (New York: World Bank)
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International Monetary Fund (2003) Foreign Direct Investment Trends and Statistics (Washington: IMF)
► Lopez-Mejia, Alejandro(1999) "Large Capital Flows - A Survey of the Causes, Consequences, and Policy Responses" (Washington D.C.: IMF)
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Graham, Edward M (1995) "Foreign Direct Investment in the World Economy" (Washington D.C. : IMF)
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Seid, Sherif H.(2002) Global regulation of foreign direct investment (Aldershot, Hampshire, England ; Burlington, VT)
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Bende-Nabende, Anthony(2002) Globalization, FDI, Regional Integration and Sustainable Development: Theory, Evidence, and Policy  (Aldershot, Hants, England ; Burlington, USA: Ashgate)
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مركز الدراسات الاستراتيجية (1998) النظام المالي العالمي الجديد. (الخرطوم : مركز الدراسات الاستراتيجية)