The latest figures have revealed that the foreign direct investments (FDI) fell by a $0.7 trillion in 2009. The US and China remained the largest magnets for FDIs.
India, however, has to be looked in a different light. Compared with FDI, the sums sent home by the expatriate Indian workers are by far significantly large, which shows that one should have a more composite instrument of measuring an economy’s ability to attract all foreign capital that arrives within its borders legally.
Also FDI fell by only 2.6% in 2009 in China and in fact FDI increased in Germany and Italy over the same period.
From the weekly Economist
Foreign direct investment is on the wane
Feb 12th 2010 | From The Economist online
THE flow of foreign direct investment (FDI) fell by 39% in 2009 to just over $1 trillion, from a shade under $1.7 trillion in 2008, according to the UN Conference on Trade and Development. All kinds of investment—equity capital, reinvested earnings and intra-company loans—were affected by the downturn. Rich countries saw FDI inflows plunge by 41%, and foreign investment into developing countries fell by more than a third. Not every country was badly hit. FDI into China, where economic growth remained robust, declined by only 2.6%. Foreigners actually invested more in Germany and Italy last year than in 2008. Despite FDI plunging by 57% last year, America remained the world’s top investment destination.