As reported in the World Investment Report 2014 (WIR14)
(UNCTAD, 2014), UNCTAD projects FDI flows to rise in 2014–2016,
mainly driven by investments in developed economies as their economic
recovery starts to take hold and spread wider. However, the fragility
in some emerging markets and risks related to policy uncertainty and
regional conflict could still derail the expected upturn in FDI flows.
Moreover, this prediction does not take into account megadeals such
as the $130 billion buy-back of shares by Verizon (United States) from
Vodafone (United Kingdom) in 2014, which will reduce the equity
component of FDI inflows to the United States and affect the global
level of FDI inflows.
Results from the World Investment Prospects Survey 2014–2016
(WIPS) support this cautiously optimistic scenario. According to this
year’s WIPS, transnational corporations (TNCs) are aware of persistent
downturn risks to the global economy and thus expressed uncertainty
about the investment outlook for 2014 but had a bright forecast for the
following two years. For the year 2016, almost half of the respondents
had positive expectations and virtually none felt pessimistic about the
investment climate.
As TNCs adopt a cautious optimism for the global outlook, FDI could
rise in 2014–2016. However, the fragility in some emerging markets
and risks related to policy uncertainty and regional conflict could still
derail the expected upturn in FDI flows.
Responses to this year’s survey revealed that firms − mostly
based in developed economies − are still cautious about recovery
prospects in home economies and possible political uncertainties in
emerging markets. This translated into a high share of investors (68
per cent) stating that they were neutral or undecided about the state
of the international investment climate for 2014. However, almost half
of the respondents (46 per cent) were confident about a positive global
climate already for the year 2015, and 48 per cent of them expressed
themselves as optimistic for the year 2016 (figure 1). The very low share
of pessimistic answers suggests that while investors take into account