WOC: Economic situation in many countries remains challenging
By Aynur Jafarova
The revival of global macroeconomics exists only in words, while in reality the situation in many countries remains extremely difficult, the World Organization of Creditors (WOC) has said.
According to the preliminary results for 2012, global economic growth was only 3.3 percent, while for most of large developed economies it was zero, the WOC said in a report.
It said the United Nations Conference on Trade and Development (UNCTAD) summed up the results for 2012 and noted a 18 percent reduction in global growth of foreign direct investments (FDI).
General downward trend
The WOC report said that last year investors were troubled by several factors, including the eurozone crisis, the threat of the "financial cliff" in the U.S. and the changes of government in several large countries, which will undoubtedly influence the investment policies of the states and thus, the positive trend of increasing FDI during the last three years came to naught.
According to the UNCTAD's preliminary estimates, in 2012, global FDIs fell by 18.3 percent ($300 billion) and amounted to $1.3 trillion, the report said.
Although the decrease in FDI flows is noted in all groups of countries, the losses were particularly evident in the developed economies, the report said.
According to the UNCTAD, developing economies were very popular among investors in 2012, despite the slight 3 percent reduction in FDI.
Asia and Oceania were the least popular developing regions, where the FDI flow decreased by 9.5 percent. Meanwhile, FDI in Africa and Latin America continued to grow by 5.5 percent and 7.2 percent, respectively, the report said.
According to the WOC report, in 2012, the European Union and the U.S. received 35 percent less FDI than in 2011. "A steep decline of interest in the U.S. was not critical for that country either as the U.S. remains the largest recipient of FDI in the world," it said.
Furthermore, according to the WOC report, the transition economies in southeastern Europe and the Commonwealth of Independent States were the most stable with regard to FDI. However, total FDI decreased slightly in these regions; they received 13 percent less FDI than in 2011.
The WOC non-profit partnership was established in 2009 to unify the creditors by well-established organizations with years of practical experience in the international financial market.
Established in 1964, the UNCTAD promotes the development-friendly integration of developing countries into the world economy. The UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.