Foreign investment is shifting towards services, Unctad says
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Foreign investment declined in 2003 for the third year in a row, a United Nations report has revealed.
Last year, total inward flows of foreign direct investment were worth $560bn (£312bn) - a decline of 18% - the UN's Conference on Trade and Development (Unctad) says.
That represents a cumulative fall since the peak in 2000 of 60%, although it is still well above the average for the last decade.
The world's richer countries were the main losers.
But Unctad says there are signs of recovery, especially among developing nations.
Services shift
Asia, Africa and the Pacific saw an increase, although in Latin America and the Caribbean, the decline continued.
Unctad also says that foreign investment has shifted towards services in all regions of the world.
In some developed countries, there has been a lot of attention on overseas call centres, which customers can telephone for advice or other services.
But many other types of service are affected, including water, electricity and business services.
The practice of off-shoring - producing a service in one country while it is consumed in another - is still in its infancy, but it may be reaching what the report calls a 'tipping point', where it is likely to increase rapidly.
The report describes this as the cutting edge of a global shift in production activity.
'New geography'
Unctad also expects foreign investment by business from developing countries to resume growth.
Already, it says, some developing countries - Chile and Malaysia - have a larger share of their total investment abroad than do Germany or Japan.
The report suggests there might be what it calls a new geography of foreign investment in the making.
Unctad's report is about foreign investment by business, which does play an important economic role in many countries.
However, the great bulk of investment takes place in firms' home nations.
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