Global FDI Trends
FDI involving overseas manufacturing and cross-border exchange of know-how and technology has experienced an unprecedented growth since the beginning of the 1990s. Earlier, global economic integration was mainly spurred by intensified trade relations 1 and, partially, through public aid transfers from advanced economies to developing countries. FDI has turned out to be an essential catalyst for integrating national economies into a globally interdependent production and services network. In the new division of labour, which now embraces the transition economies of Central and Eastern Europe as well, FDI is poised to become the lubricant for economic development, industrial modernization and fair trade relations across the Eurasian continent.
Russia is a relative newcomer on the global FDI scene, but far-sighted policies should enable it to garner a sizeable share of the available international FDI potential.
Internationally, the economic importance of foreign investment, measured as the ratio of outward FDI stock to world production or GDP, has more than trebled, from 4.4 per cent in 1960 to almost 14 per cent in 1998 (about 15–17 per cent by 2000). 2 Following the economic recovery in the industrialized countries in the mid-1980s, international investment intensified and its growth outpaced that of world production, gross fixed capital formation (a proxy indicator for domestic investment) and international trade. Between 1986 and 1990, FDI outflows increased by over 28 per cent, compared with 10 per cent for domestic investment, 11 per cent for world production (GDP) and 14 per cent for overall exports of goods and services (Table 3.1). Outward FDI stock and sales of foreign TNC affiliates — two proxy indicators of international production — also grew considerably, by 20 per cent and 17 per cent,