In 2013, the foreign direct investment (FDI) grew by 8% globally at a value of $1,461 billion. According to the Foreign Direct Investment Report 2013, it is expected to increase at least 10 % annually in the next five years.
The report, which is developed by FDI Intelligence, a division of the Financial Times and released on the first day of Annual Investment Meeting 2014 in Dubai, aims to provide a comprehensive insight into FDI trends in theemerging market.
The Annual Investment Meeting 2014 was inaugurated by Vice President andPrime Minister of the UAE, Ruler of Dubai at the Dubai International Convention and Exhibition Centre where it was attended by representatives of official delegations from more than 110 countries.
Greenfield projects
Investment is greenfield projects is expected to be a major trend in global FDI, according to the report. In 2013, global greenfield FDI increased by 5.9 %. This result demonstrates that despite a challenging time for investments portfolio, long-term FDI is continuing to grow.
The report also released that Greenfield FDI in the emerging markets grew by 14.6 % in 2013 and these markets account for 74 % of Greenfield FDI and 60.5 % of the global Greenfield FDI flows.
According to Investopedia, Greenfield FDI is a form where a parent companystarts a new venture in a foreign country by constructing new operational facilities from the ground up. Besides building new facilities, most parent companies also create new long-term careers within the overseas state by getting new staff members.
The report forecast that the emerging markets will continue to attract over half of FDI flow, North America is expected to grow the fastest over the period with strong growth in energy investments.
Africa and the Middle East are also expected to achieve strong growth in inward FDI of at least 10 % per annum over the next five years as FDI in Middle East recovers on the global financial disaster along with political lack of stability.
Outward FDI from the Middle East is also expected to recover and therefore the region can expertise the fastest growth in outward FDI flows out of any region.
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