UN ranks Malta fifth in global foreign investment locations

By David Lindsay
The United Nations has positioned Malta in fifth place among the leading recipients of foreign direct investment last year. The figures were released late last week in the 2003 World Investment Report drawn up by the UN Conference on Trade and Development (UNCTAD).
The ranking is the second consecutive fifth for Malta, with last year’s World Investment Report ranking Malta fifth for the years 1998 to 2000.
In its yearly report UNCTAD produces a ranking that compares no less than 140 countries’ share of foreign investment with its share of gross domestic product.
The news is undoubtedly good for the Malta Development Corporation and other like-minded authoritative bodies, which have been pushing hard to attract further foreign direct investment into Malta.
Malta has come a long way in its drive for foreign investment. In fact, the UN World Investment Report before last year’s, which had covered the years between and including 1988 and 1990, had positioned Malta in 28th place.
This year’s report also listed Malta as a ‘frontrunner’ in the high FDI potential category.
On a global level investment in foreign markets fell to USD651 billion in 2002, a drop blamed on the slow global economy. More than half the world's countries saw such investments decline, with the United States and Britain being hit hardest.

"The main factor behind the decline was slow economic growth in most parts of the world and dim prospects for recovery, at least in the short term," the study said. It also cited a drop in merger values.
China is now the largest recipient of foreign investment, UNCTAD said, but when compared with countries' gross domestic product, the list is topped for the second year running by Belgium and Luxembourg.
Oil-rich Angola jumped into second place ahead of Hong Kong – third - while Ireland was fourth.
The study said UNCTAD expects similar low levels of investment over the current year, but it hopes to see a rebound in 2004.
Investment declines in the United States and Britain accounted for more than half of the total loss among the 108 countries that recorded a drop in 2002, UNCTAD said. Developed countries saw foreign investment fall by 23 per cent.
The drop in Africa was 55 percent, but that came after a record year of investment in 2001, the study said. Investment declined for the third straight year in Latin America and the Caribbean - by 33 percent. Asia recorded only a minimal decline because of the record investment levels in China.
UNCTAD said most of the fall in investment was in manufacturing and service industries. Investment continued to rise in the mining, quarrying and petroleum industries.
The study also looked at the growing number of international agreements regulating investment. It concluded that nations must make sure they have leeway to set policies that direct investment toward their own
priorities.