World Investment Report 2014 UNCTAD

In 2013 global FDI showed 9% growth of inflows. Short-term forecast of $1.6 trillion in 2014 looks reassuring after the2012 slump.

One of the key findings of the World Investment Report is that developing economies show significant increase in both FDI inflows and outflows compared to previous years. Developing Asia is the largest FDI recipient, attracting far more FDI than that of either the EU or North America.

Concerns about the functioning and impact of the IIA regime on sustainable development have led to increasing calls for reform of the system.

This year’s report focuses on sustainable development and offers an action plan on investment. The World Investment Report Action Plan for Private Investment in the SDGs includes a range of policy options and a set of action packages in order to increase private investment in sustainable development.

Global economic, social and environmental challenges push the international community to reform the investment climate and set new goals. A set of Sustainable Development Goals (SDGs) was set for the period 2015 and 2030. In order to achieve these goals the Report proposes to form a Strategic Framework for Private Investment. This framework will address key challenges faced by the global economy. The suggested framework will guide and galvanize action for private investment, channel investment to SDG sectors, mobilize investments for developing countries as well as maximize the impact of investment while minimizing risks.

G7 Brussels Summit to Focus on Ukraine Situation, Global Economy

The leaders of Canada, France, Germany, Italy, Japan, Britain, the United States, the President of the European Council and the President of the European Commission (G7 leaders) will meet in Brussels in the G7 format, Xinhua reported.

It is the first time that the EU hosts a summit and that it takes place in Brussels. The two-day meeting, at the Justus Lipsius building, will begin at 8 p.m. on June 4 and end on June 5 around 3 p.m., according to the EU.

The EU is a full member of the G8 and is jointly represented by the European Council President and the European Commission President.

Originally a G8 summit was scheduled to take place in Sochi, Russia, in early June under Russian presidency. At their meeting in The Hague, the Netherlands, on March 24, the G7 leaders decided to meet in Brussels in June in the G7 format instead.

Presidents of the European Council and of the European Commission will give a pre-summit press conference on June 4 and a closing press conference on June 5 together, with exact time to be confirmed.

Read The Article here

Economic Trends to Watch in 2014

1. East Asia’s declining share of world output

Washington’s strategic pivot to Asia seems to have fizzled — but has the world’s economic pivot as well? In 2013, East Asia’s share of global output was expected to drop, relative to those of the United States and the European Union. For years, investors have been borrowing cheaply in the United States and elsewhere to capture high rates of return in East Asia. But a midyear signal from the Federal Reserve that the days of easy money are numbered has sent the East Asia’s emerging markets tumbling, while manufacturing looks to be returning to Western shores. With China possibly cooling as well during its process of economic and financial reform, will other regions take the lead in growth?

 
2. Eurozone inflation worries

The European Central Bank’s top officials like to say that they have a symmetric target for inflation. Too high is bad, but so is too low. Not surprisingly, inflation fell well under the target of “below, but close to, 2 percent” during the economic downturn of recent years. The question is why it has been allowed to do so again, during a more stable period in which other central banks have continued their aggressive attempts to bolster growth and employment. The officials say risks to prices are balanced right now, but are they really?

 3. Slugging U.S. service sector productivity

For decades, manufacturing employment in the United States has dropped as the productivity of manufacturing workers has increased. Today, about 70 percent of American workers are in private service industries. Those among them who don’t compete with foreign labor — hair stylists, gardeners, doctors, and the like — have slightly more bargaining power than their counterparts in manufacturing and agriculture. But if their productivity doesn’t rise, they’ll still have trouble obtaining higher wages.

 4. The costs of America’s staggering wealth inequality

As I’ve written before, wealth inequality is much more important than income inequality in determining access to opportunity. Severe wealth inequality raises the chance that an opportunity in the economy will go to a rich, stupid person rather than a poor, smart one. This misallocation of opportunities hurts economic efficiency and growth, making the pie smaller for everyone. Right now, the United States has some of the highest wealth inequality in the world; the net worth of the bottom half of families is equivalent to just 1.5 percent of the wealth of the top 10 percent. The results of the 2013 Survey of Consumer Finances will reveal whether this trend is getting even worse.

 5. Oil, oil everywhere

Peak oil? That buzzword of the last several years seems nothing more than a silly catchphrase now. Since prices shot up roughly a decade ago, countries and companies have had a huge incentive to find new sources of the black sticky stuff. Rates of oil production have set new records annually since 2010, thanks to fracking and geological exploration around the world. With proved reserves having risen by half in only a decade, it’s hard to imagine such a rapid increase continuing for long. Yet if it doesn’t, rising demand from the growing global economy will push prices higher again.


6. Buy Japan

Remember Japan, the world’s third-largest economy? It may be the perennial punching bag of the financial press, but it’s still responsible for an important share of world output. Growth in Japan would give the global economic recovery a shot in the arm, and share prices tend to be a good indicator of future booms. Japan’s recent shift to massively expansionary monetary policy could spark growth, but it could also lead to inflation. So far, expectations for inflation in the Bank of Japan’s quarterly survey, which are consistently biased upward, haven’t changed much since Shinzo Abe resumed the office of prime minister in December 2012 and launched the new “three arrows” policy regime. By contrast, stock prices have almost doubled, far exceeding the concurrent rise in the Standard and Poor’s 500.

7. The price of rice

After an enormous spike in early 2008 that led to shortages, export bans, and even riots, the price of rice has finally dipped below its earlier trend. Indeed, stockpiling by governments and other policies intended to encourage production and exports have added plenty of slack to the market. Still, a return to strong and sustained growth in the economies where rice is a staple food could quickly lead these problems to recur. Next time, a global downturn might not arrive just in time to tame demand.

8. China’s shadow-banking housing bubble

Given the lack of transparency in many Chinese companies, real estate is an especially popular investment in the world’s second-biggest economy. Thanks to restrictions in the Chinese financial system, a huge “shadow” banking industry has arisen to finance these purchases. The industry may have been worth about $6 trillion this spring and has been growing fast. Beijing has started a combination of financial reforms that will pave the way for a crackdown on shadow banking, but any dislocations that result could cause havoc throughout the Chinese economy. Because new house prices depend in part on expectations about interest rates and the attractiveness of other assets, they could offer an early tipoff about trouble to come.

9. The rise of bitcoin

A successful currency serves three functions: as a unit of account, a store of value, and a medium of exchange. Bitcoin is making progress as a medium of exchange, with a growing number of vendors accepting it for payment through services like Bitpay. Yet the huge fluctuations in its exchange rate and the apparent ease of theft threaten its usefulness as a store of value and, by consequence, as a unit of account. Who cares how many bitcoins you have if you don’t know what they’re worth from one moment to the next? The adoption of bitcoin around the world is likely to continue in 2014, but it won’t last much longer if the currency fails to stabilize.

See more at: http://www.foreignpolicy.com/articles/2013/12/31/presenting_the_albies_of_2013#sthash.mSYJQ63L.dpuf

Image: http://avenuemedia.ca/wp-content/uploads/2012/10/airs_content_5.jpg

Weekly Review: Last Week’s Top 5 International Business Headlines

Last week has been very active in terms of International Business Relations. Important agreements have been signed, and great economies like China and Russia have faced issues that might require some changes in their economic courses. Here are the Top 5 International Business Trends of previous week from news agencies throughout the Web.

1. EU-US historic trade deal: ‘Putting the corporation above the nation’

The successful adoption of the EU-US trade agreement promises both parties massive gains of up to $159 billion, but the profits could come at the expense of the everyday consumer, who could see the quality of their products diminish as a result. More here.

2. Russia’s woes confirm BRIC slowdown

Russia slashed its long-term growth forecasts this week, providing further evidence of a slowdown in emerging markets. Economy Minister Alexei Ulyukayev said that annual GDP growth would average 2.5% through to 2030, compared with a previous forecast of 4.3%. More here.

3. China meeting likely to chart economic agenda

All eyes are on China as the country prepares for a highly anticipated meeting of the ruling Communist Party. After decades of exponential expansion, the world’s second-largest economy is entering a period of slower growth, and Beijing is under pressure to address issues that threaten further economic development and social stability. More here.

4. Merkel Gets Energy Deal as Self-Imposed Coalition Deadline Nears

German Chancellor Angela Merkel’s bloc and the Social Democrats stitched together an agreement on renewable energy as the parties close in on a self-imposed deadline to draft a coalition accord by the end of the month. More here.

5. India’s Oct trade deficit jumps, but trends seen positive

India’s trade deficit jumped in October, rebounding from a 2-1/2 year low the previous month, as purchases of gold picked up ahead of the festival season, provisional government data showed on Monday. More here.