CityPress - - Business -

Global for­eign di­rect in­vest­ment (FDI) soared by 38% last year to reach a near record of

$1.76 tril­lion (R258.51 tril­lion) BAD NEWS

Much of it con­sisted of un­pro­duc­tive merg­ers and ac­qui­si­tions like ‘tax in­ver­sions’ and other cor­po­rate re­struc­tur­ings – which move money across bor­ders but have very lit­tle ef­fect on the real world. Most of that also in­volved flows be­tween coun­tries in the de­vel­oped world


Global FDI is ex­pected to fall back by be­tween 10% and 15% in 2016 as this wave of re­struc­tur­ings passes


While merg­ers and ac­qui­si­tions soared, cross­bor­der in­vest­ments in bricks-and-mor­tar as­sets grew at a less breath­tak­ing pace. So-called green­fields in­vest­ments – the FDI that re­sults only in changes in own­er­ship – rose 8.5% to $765 bil­lion; still only a lit­tle more than half of the peak of $1.3 tril­lion in 2008. Ac­tual cap­i­tal ex­pen­di­ture by the world’s 5 000 largest multi­na­tional cor­po­ra­tions, which in­cludes in­vest­ments in their home coun­tries, ac­tu­ally dropped for the third year in a row to $1.9 tril­lion

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