Foreign Direct Investment In OECD Countries Plunges

By Agence France-Presse Foreign direct investment in the 30-member OECD industrialized bloc fell 20% in 2002 and is expected to decline even further this year, the Organization for Economic Cooperation and Development reported June 19. A total of $490 billion was invested in companies operating in OECD member companies last year, down from $615 billion in 2001 and equal to about one third the amount invested in 2000. "The continued global economic slump, relatively weak stock markets, uncertainties over international security and heavy debt loads in once-booming sectors like telecommunications all contributed to the decline," the Paris-based OECD said in a statement. It added that if the slide in mergers and acquisitions seen in the first five months of 2003 continues, OECD countries could sustain a decline of 25% to 30% in foreign direct investment this year. The sharpest falls in 2002 were in the United States, where foreign investment plunged to $30 billion from $131 billion in 2001, and Britain, where it went from $62 billion in 2001 to $25 billion. Investment flowing outward from OECD members showed "a more modest decline," the statement said, slipping from $690 billion in 2001 to $609 billion. It added that developing countries were the principal beneficiaries of net investment outflows from OECD members, with China -- at $53 billion -- the world's largest recipient of foreign direct investment last year. Copyright Agence France-Presse, 2003