Geri
According to the statement made by the World Bank, international direct investment (FDI) flows to developing economies decreased by 435 billion dollars in 2023, reaching its lowest level since 2005. The decline in international direct investment flows caused by the recession and uncertainty in the global economy caused concerns. In the statement, it was stated that high-income countries have received only 336 billion dollars of investment since 2023, and this amount is the lowest level since 1996. In the statement made by the World Bank, it was stated that foreign investment inflows in 2023 corresponded to only 2.3 percent of the Gross Domestic Product (GDP) of developing economies. This rate corresponds to half of the peak rate recorded in 2008. In the statement, it was emphasised that investment agreements can increase international direct investment flows by more than 40 percent. In addition, it was reported that only 380 new investment agreements entered into force in the period 2010-2024. It was added that this situation is one third of the levels in the 1990s.
It was noted that the number of new trade agreements in the last 10 years has halved, from an average of 11 per year in 2010 to 6 per year in the 2020s. In the statement, it was emphasised that foreign investments are generally concentrated in the largest economies and that about 2/3 of the international direct investments in developing economies between 2012 and 2023 were made in only 10 countries, with about 1 in 3 of this share going to China, 10 percent to Brazil and 6 percent to India. The poorest 26 countries received 2 percent of total foreign investment, and developed economies received about 90 percent of foreign investment in developing countries in the last decade. The statement emphasised the importance of loosening investment restrictions and advancing global cooperation in order to achieve development goals.
World Bank Chief Economist and Senior Vice President Indermit Gill expressed his views on the subject. Gill said: "What we are witnessing now is the result of public policies. International direct investment has hit new lows, while public debt has reached record highs. But in recent years, governments have been busy putting up barriers to investment and trade rather than encouraging it. They will have to give up this bad habit."
Ayhan Köse, Deputy Chief Economist and Director of the Prospects Group at the World Bank, said: "The sharp decline in foreign investment in emerging economies should be alarming. Reversing this slowdown is not only an economic imperative, but also necessary to achieve the goals of job creation, sustainable growth and development. This requires both bold steps in domestic reforms and decisive global cooperation to revitalise cross-border investment.”
