A United Nations body has found that the world economic crisis had a smaller impact on foreign investment than feared.
The UN Conference on Trade and Development (UNCTAD) conducted a survey of 236 multi-national companies. 18% of the respondents said that the crisis triggered large-scale sell-offs or closures of foreign subsidiaries.
'The crisis was less destructive to FDI (foreign direct investment) than had been feared,' said the UN body.
Rather than liquidate their foreign assets, many of firms have begun a large-scale reduction of operating costs. 'They have preserved the overall structure of their presence overseas, with little reversal in their overall level of internationalisation,' UNCTAD said.
The financial crisis has, however, accentuated a shift of investments to emerging economies.
China, India and Brazil now occupy the top three most popular locations for foreign direct investments for 2010 to 2012, relegating the US, which ranked second in 2009, to fourth place.
UNCTAD had earlier said that FDI was recovering and could be back to near pre-crisis levels by 2012. It said that total FDIs would reach $1.2 trillion in 2010, before growing in 2011 and 2012 to reach close to $2 trillion. FDI reached a record $2.1 trillion in 2007 before falling back, as the global financial crisis pushed the world economy into recession.
