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Foreign direct investment on the rise in world's poorest countries: UN report

Foreign direct investment on the rise in world's poorest countries: UN report

Foreign direct investment (FDI) in the world's 49 poorest countries is on the rise, according to a report released today by the United Nations Conference on Trade and Development (UNCTAD).

UNCTAD's study -- FDI in Least Developed Countries at a Glance -- which is being released in anticipation of next week's Third UN Conference on Least Developed Countries, notes that, although data are not always reliable, FDI increased from $0.6 billion in 1990 to $5.2 billion in 1999 for the poorest countries.

Contributing to this improvement are major efforts that have been undertaken by the least developed countries (LDCs) to improve their investment climates, UNCTAD notes, adding that at the national level, legislation in most LDCs now offers a wide range of guarantees and other measures to encourage investment. One of the challenges, according to the report, is to ensure that investment opportunities are adequately communicated to the international business community.

France and the United Kingdom are the principal sources of FDI in African LDCs, where Europe generally outstrips the United States, the study notes. Most Japanese direct investment in African LDCs has been concentrated in Liberia. Firms from Malaysia, Singapore and Thailand are major investors in Asian LDCs.

UNCTAD points out, however, that despite these signs of improvement, LDCs receive just half of one per cent of total global FDI flows, while Official Development Assistance from governments -- another key measure to help LDCs pull themselves out of poverty -- has declined in recent years.

The LDC Conference will be held in Brussels, Belgium, from 14 to 20 May. The forum, which will be hosted by the European Union, will assess the results of the programme of action adopted at the Second Conference on LDCs held in Paris in 1990 and lay out a programme for the decade 2001-2010. The meeting will also review international support measures for the sustainable development of those countries and their integration into the world economy.

Among the participants at the Conference will be a senior-level delegation from UN Volunteers (UNV) headed by the programme's Executive Coordinator Sharon Capeling-Alakija, UNV announced today. The UNV team will be joined by Flight Lieutenant John Jerry Rawlings, the former President of Ghana, who is working this year to raise awareness of volunteer action in developing countries.