Monday, May 04, 2009

FDI in 2008

Despite all the doom and gloom, 2008 turned out to be another banner year for foreign direct investment. FDI grew by 34 percent in 2008 to 935 USD million; in Q4, FDI grew by 30 percent, year over year. Much of this investment was in the energy related sectors (Russia), followed by telecom (Russia, France), and transportation (Argentina), among others.

FDI in USD millions, source: IMF

Armstat provides detailed figures on who invests in the country and in what sectors. The table below provides figures on annual FDI for the largest investors (except for Iran and Turkey) through 2007, as well as the net stock which accounts for mergers and acquisitions (eg, Russia vs Greece and Lebanon in telecom). An xls file with more detailed information is available on the data page of With the exception of the past couple of years, the EU was the largest source of FDI to the country.

What explains this robust growth in FDI? Is it because the base is too small? How much of this is accounted for by Diaspora investments? And why Russian firms, again with the exception for the past couple of year, had so (relatively) little presence in the country?

FDI in USD millions, source: Armstat. These figures have been slightly revised in recent data releases which also include 2008.

June 4: FDI in Q1 of 2009 was USD 139 million, surpassing the investment level in 2008. The EU accounted for much of this, France (mostly telecom) in particular with 84 million. It was followed from a distance by Russia (28 million), Argentina (11 million), and the US (8).

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