Two Reasons for Optimistic FDI Outlook

The World Investment Prospects Survey 2009-2011 released by UNCTAD, which is based on 241 responses collected from the world’s transnational corporations, showed that TNCs believed the FDI to revive in 2011.

 

Vietnam is still the most favoured destination for foreign investors beside China, the US, India, Brazil, Russia, the UK, Germany, Australia, Indonesia, Canada, Mexico, Finland, France and Thailand.

 

The recovery is expected to begin slowly in 2010 and gather momentum in 2011. Global economic recession caused FDI to fall 15 per cent this year over 2008 and continue the downward trend in the short term. As much as 85 per cent of TNCs admitted adverse impacts of the global economic downturn and 79 per cent blamed on the financial crisis. Both of these aspects, separately and combined, have diminished the propensity and ability of TNCs to engage in FDI. Thus, roughly 58 per cent of the respondents said they intend to reduce their foreign investments in 2009, with nearly one third anticipating a large decrease compared to 2008.

 

There are two reasons for the optimistic outlook. Firstly, TNCs believe in the recovery of global investment environments in 2011. Secondly, they seem to be very firm in increasing their overseas presence.