World Investment Report 2023

July 6, 2023

The United Nations Conference on Trade and Development (UNCTAD) recently released its World Investment Report 2023, providing valuable insights into foreign direct investment (FDI) trends in developing countries.

FDI in Developing Countries in Asia

In 2022, FDI in developing countries in Asia reached a total of $662 billion, representing no change compared to the previous year. Despite maintaining a flat growth rate, these countries remained significant recipients of FDI, with India and ASEAN highlighted as the most buoyant regions.

Global FDI Decline

The report also highlighted a global decline in FDI, with a 12% drop to $1.3 trillion in 2022. However, it is worth noting that the decline followed a strong rebound in 2021 after the impact of the COVID-19 pandemic in 2020. China was an exception to this decline, as it experienced a 5% increase in FDI.

Renewable Energy Investment Gap

One pressing concern emphasized by the report is the substantial investment gap in renewable energy in developing countries. The annual investment required to support clean energy transitions amounts to $1.7 trillion, while developing countries attracted only $544 billion in FDI for clean energy in 2022. This highlights the need for significant efforts to bridge the investment gap and attract more sustainable energy investments.

Investment Gaps in Sustainable Development Goals

The report further reveals a substantial investment gap across all sectors of the Sustainable Development Goals (SDGs), which has increased to over $4 trillion per year from $2.5 trillion in 2015. Particularly, sectors such as energy, water, and transport infrastructure face the largest investment gaps. Addressing these gaps is crucial for achieving sustainable development targets and fostering inclusive growth.

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