World foreign direct investments plunge 51% in 2001

Global foreign direct investments totaled $735.1 billion in 2001, down 51% from the previous year, marking the biggest drop in 30 years, the U.N. Conference on Trade and Development (UNCTAD) said in an annual report released Tuesday.

Behind the sharp drop is the global economic slowdown, which dealt a severe blow to investments in the United States, the European Union and Japan, the 2002 investment report said.

While foreign direct investments in major nations remained sluggish, those in China boomed, rising 15% to $46.8 billion.

According to the report, foreign direct investments fell by 59% to $124.4 billion in the U.S., by 60% to $323 billion in the EU and by 25% to $62 billion in Japan. Those in the Asia-Pacific region also dropped 24% to $102 billion.

Investments in developed countries as a whole plunged 59%, while those in developing countries dropped 14%.

Other than the world economic slowdown, global stock market declines and sluggish corporate merger and acquisition activities were also responsible for the sharp drop in foreign direct investments, the UNCTAD report said.

(source: Kyodo News International)

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