Turmoil weighs on FDI figures
The financial and credit crisis is expected to have a negative impact on global foreign direct investments (FDI) this year, as interest in Greece from investors abroad wanes, according to data presented in a UN report. The United Nations Conference on Trade and Development (UNCTAD) said that foreign investment in Greece slumped 64 percent in 2007 from the previous year to 1.9 billion US dollars. Greece has one of the poorest records in the European Union in attracting foreign investors. Bureaucracy, corruption and inflexible labor laws are often cited as the most common factors keeping foreign investors at bay. Recent studies have found that Greece ranks below countries such as Kazakhstan, Uzbekistan and Costa Rica in terms of attractiveness for investment and competitiveness. On the other hand, the UNCTAD reports showed that the capital outflow from Greek businesses investing abroad in 2007 rose 28 percent to $5.3 billion. Local companies have invested more than 15 billion euros in high-growth neighboring markets, such as Romanian and Bulgaria, in a bid to reach larger population groups, according to National Economy and Finance Ministry data. On an international level, UNCTAD estimates that global FDI in 2008 will be around the $1.6 trillion mark, translating into a 10 percent drop from the previous level, with interest in developing markets expected to remain steady. Recent turmoil on international markets is weighing on investor sentiment with an improvement in growth rates not expected until well into 2009, according to some economists. The amount of FDI spent globally in 2007 rose 30 percent year-on-year to $1.8 trillion, UNCTAD added. The United States topped the list of countries receiving FDI inflows, followed by Great Britain, France, Canada and the Netherlands.
