World Investment Prospects Survey Main results of an UNCTAD survey among large TNCs EMBARGO The contents of this press release and the related Report must not be quoted or summarized in the print, broadcast or electronic media before 22 July 2009, 17:00 GMT (13:00 New York, 19:00 Geneva) Division on Investment and Enterprise UNCTAD

2 Purpose and methodology Purpose: identify the shape of FDI flows for the coming three years, as well as the factors affecting the investment decisions of the largest TNCs Methodology: survey roughly 2,000 of the largest 5,000 non-financial TNCs – about 240 respondents Work carried out directly by an UNCTAD team with the collaboration of a panel of international experts specialized in locational issues

3 Main findings of this year’s survey Most TNCs plan to reduce their FDI in 2009, with some improvement seen in 2010, and a substantial recovery in While TNCs throughout the world are affected, those from developing Asia are slightly more optimistic than average regarding FDI prospects. FDI plans in business-cycle sensitive industries have so far been the most affected by the crisis; according to respondents, FDI prospects are better in service industries than in manufacturing. TNCs’ investment plans in Western Europe and North America have been the most impacted by the crisis; increasing preference of TNCs for developing economies, especially in Asia

4 Sharp impact of the crisis on TNCs’ FDI plans

5 Most TNCs plan to reduce their FDI in 2009, with an improvement foreseen in 2010, and substantial recovery in 2011

6 Pessimism with regards to 2009 FDI prospects gives rise to optimism for 2011

7 TNCs from developing Asia are slightly more optimistic than others for 2011

8 Worsening of the crisis and rising protectionism could still temper FDI plans

9 The desire to internationalize continues to provide impetus for further FDI

10 FDI plans in business-cycle sensitive industries have been the most affected by the crisis

11 FDI prospects are globally better in the service industries than in manufacturing

12 Western Europe and North America have been so far the host regions most affected by the downsizing in TNCs’FDI plans

13 Increased preference of TNCs for developing economies, especially Asia

14 BRICs dominate the top 5 most attractive economies for FDI The 15 most attractive economies for the location of FDI, (Per cent of responses) Source: UNCTAD survey. Note: Figures in the parenthesis indicate the ranking in the previous survey.

15 Size and growth of market are the major location determinants Locational criteria in order of importance, (Per cent of responses) Source: UNCTAD survey.

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