Industries struggling with supply chain challenges, including electronics, semiconductors, automotive and machinery, saw a surge in projects, while investment in digital economy sectors slowed, UNCTAD said in its World Investment Report 2023.
AFTER a strong rebound in 2021, global foreign direct investment (FDI) fell by 12 per cent in 2022 to 1.3 trillion US dollars, the United Nations Conference on Trade and Development (UNCTAD) said on Wednesday.
Overlapping global crises, such as the military conflict between Russia and Ukraine, high food and energy prices, and soaring public debt, mainly caused the decrease, the UNCTAD said in its World Investment Report 2023.
The decline was felt mostly in developed economies, where FDI fell by 37 per cent to 378 billion US dollars. On a positive note, greenfield investment project announcements were up 15 per cent in 2022, growing in most regions and sectors, the report said.
Industries struggling with supply chain challenges, including electronics, semiconductors, automotive and machinery, saw a surge in projects, while investment in digital economy sectors slowed, it said.
The report revealed a widening annual investment deficit that developing countries face as they work to achieve the United Nations (UN) Sustainable Development Goals (SDGs) by 2030. The gap is now about 4 trillion US dollars per year - up from 2.5 trillion US dollars in 2015, when the SDGs were adopted.
International investment in renewable energy generation, including solar and wind, grew by eight per cent, slower than the 50 per cent growth recorded in 2021. Notably, projects announced in battery manufacturing tripled to more than 100 billion US dollars in 2022, the report added.
Although renewable energy investments have nearly tripled since the adoption of the Paris Agreement in 2015, most of the money has gone to developed countries. While developing countries need about 1.7 trillion US dollars each year in renewable energy investments -- including for power grids, transmission lines and storage — they only attracted about 544 billion US dollars in 2022, the report said.
The report showed that more than 30 developing countries still have not registered a large international investment project in renewables. Although most developing countries have set targets for transitioning to sustainable energy sources, only one-third of them have turned the targets into information on investment requirements.
The report called for urgent support to developing countries to enable them to attract significantly more investment for their transition to clean energy.
It proposed a compact setting out priority actions, ranging from financing mechanisms to investment policies, to ensure sustainable energy for all.
SOURCE: Xinhua
