Foreign Direct Investment, Effects on Environment Topic of UN World Investment Report Launch at TAMIU

Foreign direct investment (FDI) into developed countries declined by 40 percent in 2009, however, is expected to recover thanks to improving economic conditions, said a Texas A&M International University international business professor Thursday, basing his statements on a new United Nations report.

Dr. Tagi Sagafi-nejad, Radcliffe Killam Distinguished Professor of International Business and director of the Center for the Study of Western Hemspheric Trade, also quoted the Report by saying that developing and transition economies appeared more resilient to the recent global economic and financial crisis than developed countries as global FDI into their countries kept rising for the first time ever in 2009.

“Half of the six top destinations for global FDI inflows are developing and transitional economies,” said Dr. Sagafi-nejad. “The impact of the global economic and financial turmoil drove FDI to Latin America and the Caribbean down by 36 percent in 2009, but FDI inflows are expected to recover in 2010 and to continue growing in the medium term, as Brazil and México remain popular investment destinations.”

Sagafi-nejad made the announcements at a news conference Thursday that launched the World Investment Report 2010, a flagship publication of the UN Conference on Trade and Development. The Report, announced simultaneously worldwide, was released at TAMIU, which was chosen as the only launch site in the United States.

The Report, widely quoted by international news outlets and academia alike, includes new and significant trends in international investment policies at the national and international levels. Every year, the Report focuses on a specific issue affecting FDI and this year, it centered on the title, “Investing in a Low-Carbon Economy.”

“This year’s topic asks how foreign investment can help a country move to a more sustainable path by reducing the production of carbon,” Sagafi-nejad said.

Sagafi-nejad quoted the report by saying that multinational companies have an indispensable contribution to make in the shift towards a low-carbon economy since they are significant emitters of greenhouse gas across their vast international operations.

“According to the Report, for 2010-2015, one estimate indicates that $440 billion of recurring additional global investments per year are required to limit greenhouse gas emissions to the level needed for the 2 °C target to be met as referred in the Copenhagen Accord,” Sagafi-nejad said, “The Report further states that the financial contribution of the private sector is essential for achieving progress in making economies worldwide more climate-friendly, particularly in view of the huge public fiscal deficits worldwide.”

Multinational companies can help reduce energy dependence and carbon pollution, Sagafi-nejad said.

“The Report, states that channeling low-carbon foreign investment into key sectors or areas of emissions with high mitigation potential is the most effective way of leveraging the contribution of multinational companies to lower greenhouse gas emissions,” Sagafi-nejad said, “It further says that power, industry (including manufacturing as well as oil and gas), transport, buildings, waste management, forestry and agriculture are all major greenhouse gas emitters.”

According to the Report, an assessment of projected future emissions in these sectors, combined with their mitigation potential and cost, provides policymakers with a first indication of where their efforts should be concentrated, Sagafi-nejad said.

For more information about the Report, please contact Sagafi-nejad at 326.2547, e-mail tagi.sagafi@tamiu.edu or visit offices located in Western Hemispheric Trade Center, room 221 E.

Summer University office hours are 8 a.m. – 6 p.m. Monday-Thursday and 8 a.m. – noon Friday.

The full Report can be viewed by accessing: www.UNCTAD.org/WIR

Journalists who need additional information or help with media requests and interviews should contact the Office of Public Relations, Marketing and Information Services at prmis@tamiu.edu