The UNCTAD’s World Investment Report 2023 reveals that foreign direct investment (FDI) inflows to developing Asia remained unchanged at $662 billion in 2022 compared to the previous year. However, the report highlights significant variations among countries in the region.

Key Points

• India and ASEAN were the most buoyant recipients of the Foreign direct investment (FDI), with increases of 10 and 5%, respectively.
• FDI inflows were higher in developing countries compared with those in developed economies.
• China, the second largest FDI host country in the world, saw a 5% increase.
• FDI in the Gulf region declined, but the number of project announcements increased by two thirds.
• Inflows in many smaller developing countries were stagnant, and FDI to the least developed countries (LDCs) declined.
• Much of the growth in international investment in renewable energy has been concentrated in developed countries.
• The investment gap across all sectors of the Sustainable Development Goals has increased to more than $4 trillion per year from $2.5 trillion in 2015.
• The largest gaps are in energy, water and transport infrastructure. 

FDI in Developing Countries in Asia 

In 2022, FDI in developing countries in Asia reached a total of $662 billion, representing no change compared to the previous year. Despite maintaining a flat growth rate, these countries remained significant recipients of FDI, with India and ASEAN highlighted as the most buoyant regions. 

Global FDI Decline 

The report also highlighted a global decline in FDI, with a 12% drop to $1.3 trillion in 2022. However, it is worth noting that the decline followed a strong rebound in 2021 after the impact of the COVID-19 pandemic in 2020. China was an exception to this decline, as it experienced a 5% increase in FDI. 

Renewable Energy Investment Gap 

One pressing concern emphasized by the report is the substantial investment gap in renewable energy in developing countries. The annual investment required to support clean energy transitions amounts to $1.7 trillion, while developing countries attracted only $544 billion in FDI for clean energy in 2022. This highlights the need for significant efforts to bridge the investment gap and attract more sustainable energy investments. 

Investment Gaps in Sustainable Development Goals 

The report further reveals a substantial investment gap across all sectors of the Sustainable Development Goals (SDGs), which has increased to over $4 trillion per year from $2.5 trillion in 2015. Particularly, sectors such as energy, water, and transport infrastructure face the largest investment gaps. Addressing these gaps is crucial for achieving sustainable development targets and fostering inclusive growth. 

FAQs about the UNCTAD’s World Investment Report 2023

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