A United Nations report disclosed that investment from overseas companies in Britain turned four fold in the previous year, as a whopping £44 billion, ($78 billion) flowed into the economy, placing it second after United States in terms of investment flows.
According to the report published by UN Conference on Trade and Development, (UNCTAD), fresh ventures from the United States as well as various acquisitions and amalgamations between borders had pushed Britain up the foreign investment ladder last year, and it recorded its third biggest foreign direct investment (FDI) inflow, against former meagre inflows of $20 billion in 2003.
For instance, Abbey’s acquisition by Spanish bank, Santander Central Hispano for $16 billion that was rated as the world’s largest merger deal in that year was a notable addition to Britain’s lists of foreign investments.
Last year saw global FDI inflows receiving considerable boost for the first time after 2000, causing them to hit $648 billion. While foreign investments looked very keen in developing nations with a 40 % rise, inflows to developed nations slipped considerably by 14%. The European Union, contrarily, was severely afflicted as inflows plummeted steeply by 36 % to reach $216 billion, and Germany and Italy recorded net FDI cutbacks owing to their feeble economic growths and strict labour markets.
As for Britain, its FDI stock considering the total value of its entire assets owned by foreigners jumped 27% to $772 billion and placed it right on the peak of the EU group of nations. Meanwhile, France posted $538 billion FDI stocks after working intently towards inward investment, and the Netherlands recorded FDI inflows of $429 billion.
Top scorer, United States of America, saw magnanimous inflows of $96 billion, whereas China witnesses $61 billion FDI lying below Britain at the third position.
The Department of trade and industry that handles inward investment, UK Trade and Investment, observed that as much as 40% of FDI stock increases got last year by the EU had been devoted to Britain.
Head of investment at the department, William Pedder, said that high FDI levels were a result of “a policy that genuinely welcomes internationalisation and sees it as an opportunity rather than a threat. Businesses and even trade unions understand that one has to keep up the pace of change and stay ahead of the game rather than lagging it.”
Forecasting the future of FDI levels next year, UNCTAD indicated positive opportunities for foreign inflows worldwide, saying that strong FDI flows could be anticipated if economic growth remained consistent, “corporate restructuring takes hold, profit growth persists and the pursuit of new markets continues.”
Furthermore, the report hinted towards the burgeoning tendency of multinational companies of placing their basic research and development (R&D) exercises primarily in developing countries like China, India and Brazil, since these nations were prominent players in the ‘knowledge economy’.
Posted
on : Fri, 30 Sep 2005 12:05 GMT | Investments News
By : Chris Rowe
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