07 Jun Global Investment Trends Monitor, No 47 Un Trade And Development Unctad

Partnerships between international investors, the public sector and multilateral financial institutions can greatly reduce the cost of capital. Information portals for business and investor registration also expanded from 82 to 124 in developing countries and from 43 to 48 in developed economies. In 2023, 29 new international investment agreements (IIAs) were concluded, less than half being traditional bilateral treaties. Reforming older IIAs remains slow, with about half of global FDI still governed by non-reformed treaties, increasing the risk of investor-State dispute settlement (ISDS) cases. This is higher for developing countries (two-thirds) and LDCs motsepe investment platform (three-quarters).

Publications

• In developed countries, FDI in the European Union jumped from negative $150 billion in 2022 to positive $141 billion because of large swings in Luxembourg and the Netherlands.
• Partnerships between international investors, the public sector and multilateral financial institutions can greatly reduce the cost of capital.
• While developing countries need about $1.7 trillion each year in renewable energy investments – including for power grids, transmission lines and storage – they only attracted about $544 billion in 2022.
• This undermines the stability and predictability of global investment flows, creating both obstacles and isolated opportunities.
• This refers to investment in energy generation, energy efficiency and low-carbon transition technologies and sources.

While funds for SDG investment through sustainable finance products in global capital markets is still growing, the pace is slowing. Sustainable bonds showed marginal growth in 2023, while inflows in sustainable investment funds dropped by 60%. Tight financing conditions in 2023 led to a 26% downturn in international project finance, which is crucial for infrastructure investment in areas such as power and renewable energy. The report highlights the importance of lowering the cost of capital for clean energy investments in developing countries and supporting them more in their investment planning and project preparation. Tight financing conditions led to a 26% fall in international project finance deals, critical for infrastructure investment.

Global Investment Trends Monitor, No. 46

International //www.capitecbank.co.za/ project finance and M&As suffered the most from higher financing costs in 2023, with 21% and 16% fewer deals, respectively. However, they were 6% up in value and showed higher numbers in manufacturing in an initial sign of recovery following a long-term declining trend. In 2023, 86% of the investment policy measures taken by developing countries were more favourable to investors.

IIA Mapping Project

Lacklustre financial flows to developing countries were not due to a lack of investment facilitation efforts. Policymakers should also consider the negative spillover effects of sustainability reporting standards on firms outside main markets. In particular, small and medium-sized enterprises in developing countries may struggle to meet increasing disclosure requirements, which could affect their market access and participation in global supply chains. While greenfield project announcements in developing countries increased by over 1,000, the distribution was uneven, with nearly half in South-East Asia and a quarter in West Asia.

to narrow gaps for global goals

It also highlights that //www.investec.com/ digital business and investment facilitation can lead to broader digital government implementation, addressing governance and institutional weaknesses that hinder investment. About 70% of new cases were against developing countries, including three LDCs, with claims mostly in the construction, manufacturing and extractive sectors. Greenfield announcements included megaprojects like a green hydrogen project in Mauritania.

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Also, two thirds of reporting funds have committed to achieving net zero in their investment portfolios by 2050. Industries struggling with supply chain challenges, including electronics, semiconductors, automotive and machinery, saw a surge in projects, while investment in digital economy sectors slowed. Crises, protectionist policies and regional realignments are disrupting the world economy, fragmenting trade networks, regulatory environments and global supply chains. This undermines the stability and predictability of global investment flows, creating both obstacles and isolated opportunities.

amid volatile capital markets

The 2023 value as GDP percentage, 1.3 per cent, is less than a third of the share motsepe investment platform in 2000. Following a decline in 2023, global foreign direct investment (FDI) remained weak in the first half of 2024 amid a challenging international investment environment. Globally, the number of investment policy measures in 2023 matched the five-year average, with about three quarters favorable to investors.

Policy actions are urgently needed to mitigate the risk of widening backlash against sustainable investment strategies. Overall, FDI to developing countries fell by 7% in 2023 to $867 billion, but the decrease varied significantly across regions. IPR recommendations promote transparent, efficient and predictable policy, legal and institutional investment frameworks. They can be implemented over several years with the assistance of development partners, including UNCTAD.

In 2023, global foreign direct investment (FDI) flows decreased marginally by 2 per cent to $1.33 trillion. FDI to developing Americas was almost stable, decreasing by 1 per cent to $193 billion. FDI inflows to least developed countries rose by 17 per cent, reaching $31 billion. The cost of capital is a key barrier to energy investments in developing countries, which are seen as riskier.