WORLD INVESTMENT REPORT 2004 LAUNCHED IN ARMENIA
ArmenPress
Nov 12 2004
YEREVAN, NOVEMBER 12, ARMENPRESS: The Armenian Development Agency,
the Ministry of Trade and Economic Development of Armenia and
United Nations Development Program (UNDP) launched today the World
Investment Report 2004: The Shift Towards Services, a UNDP press
release said. Tigran Davtyan, Deputy Minister of Trade and Economic
Development, and Lise Grande, UN Resident Coordinator and UNDP Resident
Representative, presented the Report, which was prepared by the UN
Conference on Trade and Development (UNCTAD).
The Report examines the global shift towards services and discusses
the challenges and opportunities for development that arise from this
shift. The Report shows that for the third year in a row, global
flows of foreign direct investment (FDI) are declining, reaching
$560 billion – the lowest level since 1998. Behind the global picture
of declining investment flows, the performance of different regions
varied. Overall, out of a total of 193 economies, 111 experienced a
rise in FDI inflows, and 82 a decline. The largest declines occurred
in developed countries, with inflows to the European Union and North
America plummeting by USD130 billion. FDI in Armenia increased from
$88 million in 2001 to $155 million in 2003. In the south Caucasus,
significant foreign investment occurred in Azerbaijan’s oil industry
and Georgia’s oil transport sector.
The Report shows that the bulk of global FDI is channeled into service
sectors, which are the highest growth sectors in many economies. In
the early 1970s, 25 percent of FDI was directed into the service
sector compared to 60% now. The composition of foreign investment
within services is also changing: while trading and financial
services previously accounted for about half the inward stock of
FDI in services, services such as electricity, telecommunications,
and business services are becoming increasingly prominent.
The Report concludes that to benefit from an increasingly globalize
and interdependent world economy, countries need to strengthen their
competitive services. If conditions are right, FDI can help to achieve
this. FDI’s most important contribution is in bringing the skills,
capital and technology countries need to set up competitive service
industries. This applies not only to the new information technologies,
but also to such traditional services as infrastructure and tourism.
Lise Grande noted in her speech: “Countries need to improve their
service industries to stay or become competitive. This applies
particularly to Armenia where the transition is continuing. The Report
that we have launched today shows that foreign direct investment in
services can help to improve the quality of, and people’s accessibility
to, services. The Government, private sector and international
community need to work together to create the conditions that will
help promote investment in these services, which in turn, will help
to increase the country’s competitiveness in the region and the
global economy.”