25 SEPTEMBER 2002
The United Nations has positioned Malta in fifth place among international recipients of foreign direct investment between 1998 and 2000
In its 2002 World Investment Report released last week by the UN Conference on Trade and Development (UNCTAD), the UN produced a new ranking that compared no less than 140 countries share of global foreign investment with its share of gross domestic product for the 1998-2000 period.
The news is undoubtedly good for the Malta Development Corporation, which has been pushing hard of late to attract further foreign direct investment into Malta.
Malta placed behind Belgium and Luxembourg - ranked together due to their monetary union before the introduction of the euro - Hong Kong, oil-rich Angola and Ireland.
Malta has come a long way in its drive for foreign investment. In fact, the last UN World Investment Report, which had covered the years between and including 1988 and 1990, had positioned Malta in a dismal 28th place.
The report found that global foreign investment fell by more than half in 2001, to USD735 billion, mainly because of a drop in the number of international mergers and acquisitions.
"This makes it all the more important for countries to measure how they are doing today in terms of attracting foreign direct investment and what their potential is for the future," said Karl P. Sauvant, the report's author.
The survey found that although developed countries are recipients of more than two-thirds of foreign investment, many do not live up to their potential.
Australia, Italy and Japan were among the rich nations that found themselves in the bottom half of the 140-nation ranking.
Although the United States was the largest recipient of foreign investment - luring USD124 billion from abroad last year - it ranked only 74th in relation to the size of its economy, UNCTAD said in its World Investment Report. Economists regard foreign direct investment as an important factor in boosting a country's growth.
Tax havens were left off the list because the high flow of money into such countries does not reflect the real level of foreign investment.
At the bottom of the list were Suriname, Yemen, Indonesia, United Arab Emirates and Libya, which all had negative scores.
UNCTAD said the countries that have done best in boosting their exports over the past years have been those with high levels of investment by transnational corporations. Foreign affiliates now account for 50 per cent of all exports from booming China - up from 17 percent a decade ago, for example.
Foreign companies were traditionally active in the production and export of manufactured goods, as is generally the case ion Malta, but they are also becoming increasingly involved in trade in services, the report said another area being promoted by Malta.