विकासशील नेपालको सपना: निजी क्षेत्र अपरिहार्य

विश्व बैंकको अध्ययन अनुसार पूर्वाधारमा गरिएको १ प्रतिशत लगानीले देशको अर्थतन्त्रमा १ प्रतिशत नै प्रतिफल दिन्छ। यस्तै, विश्व बैंककै अर्को प्रतिवेदन अनुसार गुणस्तरीय पूर्वाधारले लागत मुल्य घटाएर प्रतिस्पर्धी क्षमता बढाउने हुनाले वाह्य तथा स्वदेशकै व्यापारबाट बढी फाइदा हुन्छ।
तर, नेपालमा पूर्वाधार निर्माणको अभावले विगतको एक दशकमा औषतमा प्रतिवर्ष ४ प्रतिशतभन्दा कमको आर्थिक वृद्धि भइरहेको छ । त्यसैले नेपाल उद्योग परिसंघका अध्यक्ष हरिभक्त शर्माका अनुसार नेपालले गरिबी, न्यून आर्थिक वृद्धि तथा बेरोजगारीको दुष्चक्रबाट बच्न पनि पूर्वाधारमा धेरै नै लगानी गर्नु आवस्यक छ ।
विश्व बैंककै अर्को अध्यायनले पनि नेपालले हालको अल्पविकसित मुलुकबाट सन् २०२२ सम्म स्तरोन्नति हुन तथा सन २०३० सम्म मध्यम आय भएको मुलुकको श्रेणीमा स्तरोन्नति हुन आगामी १ दशकमा आफ्नो राष्ट्रिय आयको ८ प्रतिशतदेखि १२ प्रतिशतसम्म पूर्वाधारमा लगानी गर्नुपर्ने आवस्यकता औल्याएको छ ।  अर्थात प्रतिवेदनका अनुसार पर्याप्त र गुणस्तरीय पूर्वाधार अभावमा नेपालले हाल कुल सम्भावित राष्ट्रिय आयको ८ देखि १२ प्रतिशत गुमाइरहेको छ । नेपालले सन् २०३० सम्ममा आफूलाई अति कम विकसित मुलुकको सूचीबाट मध्यम आय भएको विकासशील मुलुकमा स्तरोन्नति गर्ने लक्ष्य लिएको छ तर यो लक्ष्य हासिल गर्न उच्च र दिगो आर्थिक वृद्धिदरबाट मात्र सम्भव रहेको शर्माको भनाइ  छ ।
यसका लागि निजी क्षेत्र समेतको सहभागितामा पूर्वाधार विकासमा लगानी वृद्धि गर्नु अपरिहार्य छ,’ उनले भने, नयाँ प्रविधिको उपयोग, लामो व्यवस्थापकीय अनुभव र आर्थिक रुपमा क्षमतावान निजी क्षेत्रले पूर्वाधार विकासका क्षेत्रमा कम खर्चमा सहज र गुणस्तरीय परिणाम ल्याउन सक्छ भन्ने निजी क्षेत्रको ठम्याइ रहेको पनि उनले बताए ।
तर ,पछिल्ला वर्षहरुमा स्वदेशी तथा विदेशी लगानीको आश्वासन आए पनि यथार्थमा विदेशी लगानी आइरहेको छैन भने स्वदेशी लगानीकर्ता पनि लगानी गर्न हच्किरहेको र पर्ख र हेरको स्थितीमा रहेको अवस्था छ,’ उनले भने । यसका लागि सरकारले लगानीमैत्री वातावरण बनाउन आवस्यक रहेको शर्माको भनाइ छ ।
लगानी सम्मेलन गरेर आश्वासन बटुल्ने तर लगानी भने नआउने अवस्था हटाउन सरकार र निजी क्षेत्रले पर्याप्त गृहकार्य गर्नुपर्ने अवस्था सिर्जना हुनुमा पनि लगानीको वातावरण बनाउन सरकारले ढिलाइ गर्नु रहेको निजी क्षेत्रको बुझाई छ ।
सडक, रेल, मेट्रो, केबलकार, ड्राइपोर्ट, विमानस्थल, टनेल, हाइड्रोपावर, टेलिकम जस्ता पूर्वाधारको अभावमा दीगो विकासको कल्पना गर्न सकिँदैन । दीगो विकास विना आर्थिक वृद्धि हुन असम्भव नै छ ।
त्यस्तै, नेपालमा सिँचाइको नहर, ग्रामीण सडक, ग्रामीण विद्युतीकरण, विद्यालय भवन, स्वास्थ्य भवन, प्रहरी भवन पनि यथेष्ट नभएकाले सर्वसाधारणको जीवन कष्टकर रहेको छ भने उद्योग व्यापार चल्ने त कल्पना पनि गर्न सकिन्न । यायायातको सुविधा भए मानिसको आवागमन बढ्छ र उद्योग तथा व्यापारजस्ता आर्थिक क्रियाकलापको सम्भावना पनि बढ्छ ।
तर, पूर्वाधार निर्माण खर्चिलो काम हो । सरकारको लगानीले मात्र नेपालजस्तो अल्पविकसित मुलुकले आफ्नो पूर्वाधारको आवस्यकता पूरा गर्न सक्दैन । त्यसैले विश्वभरि नै पनि हालका दिनमा सार्वजनिक–निजी साझेदारीको (पिपिपी मोडल) अवधारणा अगाडि आएको हो । विश्वमा महँगा पूर्वाधार सरकारले मात्र होइन, निजी क्षेत्रले पनि धमाधम निर्माण गरिरहेका छन् । सरकार र निजी क्षेत्र मिली संयुक्तरूपमा पिपिपी मोडलमा पनि निर्माणका काम गर्ने प्रचलन नेपालमा पनि जलविद्युतको विकासमा उदाहरणाीय देखिएको छ । तर, जलविद्युत बाहेकका पूर्वाधार निर्माणमा भने पिपिपी मोडलले काम गरेको देखिएको छैन ।
पूर्वाधारविद् सूर्य आचार्यका अनुसार सार्वजनिक–निजी साझेदारी (पिपिपी) मोडलबारे धेरैमा अस्पष्टता भएकाले पनि यस्तो भएको हो । सन् १९८० को दशकदेखि विश्वमै सरकारी बजेट सीमित हुन थालेका कारण पहिला सरकार आफैंले निर्माण गर्ने सार्वजनिक बाटाजस्ता क्षेत्रमा निजी क्षेत्रलाई पिपिपी मोडलमा सहभागी गराइएको हो । जस्तै, नेपालमा पनि विद्युत प्राधिकरणले बिजुली किन्ने सुनिश्चित गरिदिएकाले निजी क्षेत्र यसमा लगानी गर्न आएको छ तर सार्वजनिक–निजी साझेदारी मोडेल यातायात क्षेत्रमा विश्वमा पनि कतै सफल भएको छ भने कतै असफल पनि । आचार्यका  अनुसार संसारभर नै सबै विकासशील देशका नेताले सार्वजनिक–निजी साझेदारीको अर्थ गलत रूपमा बुझे । उनीहरूको बुझाइमा सबै काम निजी क्षेत्रले नै गर्छ भन्ने रह्यो तर त्यस्तो होइन । नवीनतम पद्धति, प्रभावकारी उपाय र चुस्त व्यवस्थापनका कारण निजी क्षेत्रलाई प्रोत्साहित गरिएको हो । पुँजीको जोखिम कसले लिने भन्नेमा धेरै गलत बुझाइ रहेको उनको भनाइ छ ।
यस्तै, पूर्वसचिव कृष्ण ज्ञवालीका अनुसार पनि नेपालमा १० वर्षअघि आएको बुट ऐनले काम नै गरेन । बुट सार्वजनिक–निजी साझेदारीको एउटा मोडेल हो । तर, सरकारले हाल पिपिपी ऐन बनाइरहेकाले त्यसबाट निजी क्षेत्रको संलग्नता पूर्वाधारमा हुनसक्ने सम्भावना रहेको उनले बताए । परिसंघका उपाध्यक्ष विष्णु अग्रवाल पनि सरकारले तयारी गरिरहेको पिपिपी ऐनले निजी क्षेत्रलाई पूर्वाधारमा लगानी गर्ने बाटो खोल्ने बताउँछन् ।
सन् २०२२ सम्म अल्पविकसित राष्ट्रबाट विकासशील राष्ट्र हुन नेपाललाई १ खर्ब डलर आवश्यक पर्ने विभिन्न अध्ययनले देखाएको छ । वार्षिकरूपमा हिसाब गर्दा नेपाललाई करिब २ अर्ब डलर चाहिन्छ । त्यसैले सरकारको मात्रै लगानीले नेपाललाई चाहिने पूर्वाधार निर्माण गर्न असम्भव नै छ । पिपिपी ऐन निजीक्षेत्र मैत्री आए पूर्वाधारमा निजी क्षेत्रको लगानी आउन सम्भव छ र सम्भव छ नेपालको स्तरोन्नति पनि । तर, निजी क्षेत्र प्रतिफल विना लगानी गर्न सक्दैन त्यसका लागि सरकारले निजी क्षेत्रमैत्री नीति–नियम बनाउनुपर्छ । परिसंघका अध्यक्ष शर्मा पनि सरकारले लगानी भित्रिने नीति ल्यायो भने लगानीकर्ता तयार रहेको बताउँछन् । 
सरकारी आधिकारी लगानी भिœयाउने भन्दा पनि निजी क्षेत्रलाई कस्ने र पुँजी पलायन गर्ने नीति ल्याउन तल्लिन रहेको निजी क्षेत्रको गुनासो छ । लगानीमैत्री नीति–नियम, लगानीमैत्री कर्मचारीतन्त्र र दीर्घकालीन तथा दूरदृष्टि सोच भएको खण्डमा निजी लगानी बढ्नेमात्र नभएर सरकारकै योजना छिटो सफल हुने शर्माको भनाइ छ ।
सरकारले पछिल्ला वर्षमा सिन्को पनि नभाँचेको भने होइन । पछिल्लो समय उद्योग दर्ताको प्रक्रियामा सरलीकृत गरेकोछ । सरकारले सेज ऐन ल्याएको छ र श्रम ऐन पनि छिट्टै ल्याउँदै छ । त्यसैले नेपालमा दोस्रो चरणको आर्थिक सुधारको काम भइरहेकाले लगानी गर्ने वातावरण बनिसकेको सन्देश सम्मेलनले दिने उद्योग मन्त्री नवीन्द्रराज जोशीको भनाइ छ ।
तर, परिसंघका राष्ट्रिय परिषद् सदस्य विरेन्द्र पाण्डे दुइ वर्षअघिको सम्मेलनमा उल्लेखित वित्तीय जोखिम, जग्गा अधिग्रहण तथा समुदायको संलग्नता, वातावरणीय प्रभाव मूल्यांकन प्रक्रिया, सार्वजनिक–निजी साझेदारी तथा प्रतिस्पर्धा तथा विश्वासको कमी जस्ता पाँचवटा समस्या पहिचान गरिएकोमा हालसम्म पनि समस्या ज्यूकात्यु रहेको बताउँछन् । त्यसमाथि सरकारी अधिकारी परिवर्तनपछि हुने प्रशासनिक झन्झटले पनि निजी क्षेत्रलाई निरुत्साहित गरिरहेको गुनासो निजी क्षेत्रको  छ ।
त्यसैले पूर्वसचिव पुरुषोत्तम ओझाका अनुसार पूर्वाधार विकास गर्नका लागि कुरा मात्र गरेर केही पनि हुनेवाला छैन । कसरी पूर्वाधार विकास गर्ने हो भन्नेबारे पहिला गतिलो गुरुयोजना चाहिने उनी बताउँछन्।

TAAN organises bird watching training for trekking guides

A two-day 'Bird Watching Training for Trekking Guides' organised by Trekking Agencies' Association of Nepal (TAAN) in association with Nepal Tourism Board (NTB) and Bird Conservation Nepal (BCN) concluded today.
The training was conducted by instructors from the Bird Conservation Nepal witnessed some theoretical classes at Trekking Agencies' Association of Nepal (TAAN) Secretariat in Maligaun. The organisers also arranged birding tours in Taudaha of Kathmandu and Phulchowki hills of Lalitpur to give practical birding knowledge to the participants, according to a statement issued by TAAN.
TAAN general secretary Karna Bahadur Lama handed over certificate of participation to all the participants.
Speaking at the programme, Lama said that the training was a part of TAAN's initiatives to develop skilled workforce for the tourism industry. “We need quality workforce for quality tourism," he said, adding that the training is the institution's efforts to develop and promote quality tourism in the country.
Similarly, chief executive of BCN Narendra Man Babu Pradhan said that birding is a growing segment in Nepali tourism industry. “I am hopeful that this training, albeit short, will help to heighten your curiosity toward birding," he said, adding, "If you have passion, you can become a successful birding guide."
Likewise, an ecologist with the Department of National Parks and Wildlife Conservation (DNPWC) Laxman Prasad Poudel said that he was hopeful that the training will encourage trekking guides to take birding seriously.
Coordinator of TAAN's Training and HR Department Shital Chandra Dharel, on the occasion, said that the training was TAAN's yet another initiative to enhance professionalism of trekking guides.
Earlier inaugurating the training, TAAN president Chandra Prasad Rijal requested the participants to make optimum use of the training for career development.
Similarly, NTB board member Krishna Kumar Aryal said that such trainings would help in promotion of quality tourism.

Infrastructure development key to propel growth

Various studies show that 1 per cent increase in the stock of infrastructure is associated with a 1 per cent increase in gross domestic production (GDP). One of the key avenues through which infrastructure contributes to economic growth is by improving competitiveness and facilitating international and domestic trade by reducing the cost, according to World Development Report.
However, lack of basic infrastructure has forced Nepal to witness an average of below 4 per cent economic growth over the past decade. Thus, Nepal needs to invest heavily on infrastructure, if the country wants to come out of the vicious cycle of low economic growth, poverty and unemployment, according to president of Confederation of Nepalese Industries (CNI) Hari Bhakta Sharma.
A World Bank estimate of Nepal's 'infrastructure gap' pegs investment needs at between 8 per cent and 12 per cent of national income this decade. Nepal's medium-term ambition is to become a middle-income nation by 2030, while graduating out of the least developed country (LDC) status by 2022.
"This is only possible with high growth rates sustained by productive capital formation," Sharma said, adding that this demands rapid development of infrastructure driven largely by a private sector – local and foreign – that has the technical, managerial and financial clout to deliver efficient, high-quality and cost-effective results on the ground.
The government has to mobilise massive development budget, apart from the private investment, Sharma said, adding that the matching of the government investment with the private sector is the only cure to the low growth trajectory. "But the government has to create the investment-enabling environment," he added.
Once the domestic investors start pouring their money in infrastructure sector, foreign investors will also get confidence to invest. Nepal needs $10 billion a year in terms of foreign direct investment (FDI) in order to graduate from the current LDC status, according to the World Bank.
In order to elevate the status, Nepal needs to be competitive in attracting FDIs, Sharma added.
"Nepal is fast losing its competitiveness also due to lack of infrastructure that helps connect market and industry," according to infrastructure expert Surya Acharya. "Connectivity is key to not only linking the market and boosting the trade and economic activities but also an adhesive to make Nepalis stick to unity as a nation."
Another World Bank study has concluded that Nepal needs to spend $13 billion to $18 billion from 2011 to 2020 to bridge the investment gap in infrastructure. "Of the total, $3.7-$5.5 billion is needed in transport infrastructure alone," the report noted. Since the government has limited resources, it cannot invest alone to improve infrastructure, which calls for private sector's participation, Sharma added.
As Nepal has to do a lot in infrastructure development – from increasing accessibility to facilitating service delivery and enhancing cost effectiveness – the government has no other option than to create conducive investment environment and invite private sector, both domestic and foreign, to invest in the infrastructure sector, said Sharma.
"The government should also move forward with the economic reforms as the laws that guide these sectors are the biggest bottlenecks in development," said CNI national council member Birendra Pandey.
As the BOOT Act that came a decade ago could not encourage private sector investment in infrastructure sector, the government is in the process of finalising the PPP Act – based on the PPP Policy it had brough recently – aiming at involving the private sector in infrastructure, according to former secretary Krishna Gyawali.
In the present circumstances, when the private sector is complaining of lack of conducive environment for investment, PPP model can be a good alternative so that the private sector can feel secure as the government too will have stake in such projects.
CNI vice president Bishnu Agrawal also stresses the need for PPP model of development. "The PPP model is going to be very helpful in those areas where the private sector alone is a bit hesitant to enter," he said, being hopeful that the government will bring the PPP Act sooner to encourage private sector investment in infrastructure.
The Istanbul Programme of Action that aims to at least halve the number of LDCs by 2020, too, has laid great emphasis on PPP. "Partnerships with the private sector play an important role for promoting entrepreneurship, generating employment and investment, increasing the revenue potential, developing new technologies and enabling high, sustained, inclusive and equitable economic growth in least developed countries," it says.

Second Nepal Infrastructure Summit on February 19-20
The second Nepal Infrastructure Summit is scheduled for February 19-20. The two-day summit is being organised jointly by Confederation of Nepalese Industries (CNI) and Youth Community for Nepalese Contractors (YCNC), in association with different government agencies as well as bilateral and multilateral development partners. Prime Minister Pushpa Kamal Dahal is scheduled to inaugurate the summit as the chief guest. Similarly, Indian railway minister Suresh Prabhakar Prabhu will be the Guest of Honour and keynote speaker of the summit that will also showcase the project bank developed by Investment Board Nepal (IBN).

CG, Nimbus pledge to help start-ups

Chaudhary Group (CG) and Nimbus Group will help the start-ups with capital and other support.
Talking at ‘Finance Your Dreams’ – an interaction with some 450 young entrepreneurs organised by Himalyan Climate Initiative (HCI) – in Kathmandu today, CG Corp managing director Nirvana Chaudhary and Nimbus managing director Anand Bagaria pledged their personal and corporate commitments to help incubate start-ups in Nepal.
They also announced their personal and corporate commitments to help incubate start-ups in the country to boost entrepreneurship.
Speaking at the event, Chaudhary said the Chaudhary Group is always committed to supporting young start-ups with an information technology bent. "We are making a huge chunk of money available for young entrepreneurs and companies,” he said, adding that young entrepreneurs often find it difficult to access finance. "As entrepreneurs ourselves, we feel committed to make entrepreneurs in the society,” he added.
Chaudhary also suggested youths to develop a package of passion, energy, innovation and execution plans before starting any new ventures.
Likewise, Bagaria said core business start-ups come from entrepreneurs and then get supported by investors. "However, sometimes ideas also came from investors and will be picked up by young entrepreneurial talents."
Stressing on the need to develop incubation hubs in the country, Bagaria informed that such hubs would help create an environment where entrepreneurial ideas are exchanged and brought to fruition. “Nimbus is always positive to support start-ups of Nepali youths and develop entrepreneurship in the country,” he added.
A founder of HCI Prashant Singh, on the occasion, said that 500,000 new jobs should be created in the country each year to stop talented youths travelling to foreign countries in the search of work. "One entrepreneur can create three to five jobs,” he said, adding that only entrepreneurship would help in the development of a country’s economy.
He also said the aim of the event was to collect entrepreneurial ideas. "The ideas generated at the event would be further shaped at HCI Incubation Hubs and those which were ready for investment would be presented to potential investors for consideration.
HCI is a not-for-profit organisation that runs 'Social Innovation and Business Incubation Hubs' in Kathmandu and Nepalgunj.

ADB private sector financing exceeds $8.3 billion in 2016, up by 15 per cent year-on-year

The Asian Development Bank (ADB) approved $2.5 billion in new private sector financing in 2016. Together with cofinancing, ADB mobilised $8.3 billion for private sector projects in the region, a 15 per cent increase over last year and a new record for the multilateral, a press release issued by the multilateral development partner claimed.
"The private sector has a fundamental role to play to help developing Asia create good jobs, build high quality infrastructure, and alleviate poverty. ADB’s 2016 financing – including a record level of cofinancing – shows the importance of bridging the public and private sectors in the region,” said ADB vice-president for Private Sector and Cofinancing Operations Diwakar Gupta.
"We will continue to expand our activities in 2017, providing access to more financial solutions and trade facilitation tools while sharing knowledge and expertise to ensure Asia’s development is sustainable and inclusive," Gupta added.
Major milestones in 2016 included an agreement between ADB and the Japan International Cooperation Agency (JICA) to establish a new fund to support private infrastructure investments across Asia and the Pacific. The Leading Asia’s Private Infrastructure Fund (LEAP) is capitalised by $1.5 billion in equity from JICA and will help mobilise some $6 billion in investments. The fund became operational in August and over $200 million of LEAP funds were allocated through end-2016 in renewable energy projects in India and Indonesia.
ADB accelerated overall support for energy projects in 2016, which comprised 60 per cent of private sector financing for the year. Notable energy transactions included the $400 million financing for Tangguh LNG in Indonesia and a $1 billion joint ADB sovereign and nonsovereign financing of the Shah Deniz gas project in Azerbaijan.
As part of its commitment to increasingly go 'green,' eight out of ten private sector energy projects in 2016 were in clean energy, including the first utility scale solar power project in Cambodia by Sunseap and the Muara Laboh geothermal power project in Indonesia. Climate change financing in the private sector exceeded $1 billion in 2016.
ADB continued to expand in the agribusiness sector, financing three transactions, including innovative support for dairy farmers to improve animal waste management in the People’s Republic of China (PRC) and for the introduction of climate-controlled greenhouses for flowers and vegetable production in Viet Nam, Indonesia, and the PRC.
Lending to financial institutions, which primarily support micro, small, and medium-sized enterprises, continued to be a major part of ADB’s private sector portfolio. In 2016, ADB approved 10 transactions in the finance sector valued at over $590 million. In addition, despite a tough year for trade, ADB's Trade Finance Programme supported over $3 billion in trade in 2016, a 20 per cent increase over the previous year.
ADB’s role in spurring private sector financing led it to be named Global Multilateral of the Year by Thomson Reuters’ Project Finance International. The award recognises ADB’s critical role in making infrastructure projects more attractive and bankable to the private sector. ADB also received international awards in 2016 for Indonesia’s Tangguh LNG project as well as for ongoing support to the Tiwi MakBan geothermal project and Mactan Cebu International Airport in the Philippines, Ooredoo’s mobile telecoms network in Myanmar, and Gulpur hydropower in Pakistan.
ADB’s private sector operations are targeted to grow to $4 billion by 2020, with major expansions in funding for infrastructure, agribusiness, climate change and renewable energy, and inclusive business.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members, 48 from the region.

Investment Board prepares project bank for Nepal Investment Summit

Investment Board of Nepal (IBN) has prepared a project bank – including some 30 to 35 mega projects – to showcase at the Nepal Investment Summit to be held in Kathmandu on March 2-3.
With an ambitious target to attract over $1 billion of foreign direct investment (FDI) from the summit, the board – in association with the Industry Ministry – has included Chemical Fertilizer Plant, Kathmandu-Pokhara Railway, Kathmandu-Kulekhani-Hetauda Tunnel Highway, 650-MW Tamakoshi III Hydropower Project, second International Airport, East-West Electric Railway Project, East-West Electricity Railway Link to India Project, Kathmandu Valley Metro Project and Kathmandu-Pokhara Railway Project in the project bank.
"We are expecting at least 300 international visitors, including foreign diplomatic missions in Nepal, foreign investors, potential foreign and domestic Investors, national and foreign media, Non-Resident Nepalis (NRNs), development partners, experts, private sector organisation representatives and government representatives,” said Industry Minister Nabindra Raj Joshi.
Apart from over $1 billion FDI commitment, at least 20 large-scale investors are expected to apply for at least three Intents of Investment, Joshi said, adding that the ministry was also planning to sign Bilateral Investment Promotion and Protection Agreement (BIPPA) with at least one country. "The summit is also showcasing transport, infrastructure, manufacturing, energy, ICT and mining sectors as potential investment avenues in Nepal," he added.
The Chemical Fertilizer Plant, with capacity of at least 500,000 tons per year, is expected to attract investment of nearly $1.4 billion. The project, which is already in the feasibility study phase, is also expected to enhance agricultural productivity apart from import substitution of around 230,000 tonnes a year worth approximately Rs 11.61 billion.
Apart from Tamakoshi III (650 MW), there are few other hydropower projects including Upper Marsyangdi (600 MW) that could be of interest to the investors, according to the board.
The IBN has claimed that the main objective of the summit is to promote Nepal as the investment destination for the next decade. It will be used as a platform to showcase Nepal's investment opportunities especially to large scale investors looking to explore opportunities in new destination, it added.

Global FDI falls by 13 percent

Global flows of foreign direct investment (FDI) fell by 13 per cent in 2016 to an estimated $1.52 trillion as global economic growth remained weak and world trade volumes posted anemic gains, according to the latest UNCTAD Global Investment Trends Monitor.
"FDI recovery continues along a bumpy road," UNCTAD secretary-general Mukhisa Kituyi said. "Particularly of concern is the sharp drop-off in manufacturing investment projects, which play such an important role in generating badly needed productivity improvements in developing economies," he said, adding, "Looking ahead, economic fundamentals point to a potential increase in FDI flows by around 10 per cent in 2017."
"However, significant uncertainties about the shape of future economic policy developments could hamper FDI in the short-term," he added.
The decline of FDI in 2016 was not equally shared across regions, reflecting the heterogeneous impact of the current economic environment on countries worldwide. FDI flows to Europe fell by 29 per cent to an estimated $385 billion, with a number of countries experiencing strong volatility in their inflows. This decline was tempered by modest growth in flows to North America (6 per cent) and a sizeable increase in investment in other developed economies, principally Australia and Japan.
Slowing economic growth and falling commodities prices weighed on FDI flows to developing economies. Inflows to these economies fell by 20 per cent (to an estimated $600 billion) due to significant decreases in developing Asia and in Latin America. Nevertheless, developing economies continue to comprise half of the top 10 host economies. FDI flows to transition economies rose by 38 per cent to an estimated $52 billion.
The wave of cross-border mergers and acquisitions shows signs of ebbing. A 13 per cent increase in the value of net sales, which rose to $831 billion, pales when compared to the 67 per cent and 68 per cent increases registered in 2014 and 2015. Greenfield FDI project announcements value rose by 5 per cent but this was largely due to a handful of very large projects in a few countries. The vast majority of countries, in contrast, registered declines.