Dear Members of the World Investment Network,

It is my pleasure to share with you UNCTAD's World Investment Report 2012 
(WIR12): Towards a New Generation of Investment Policies.

Every year the Report examines recent FDI trends and policies.

Global foreign direct investment (FDI) flows in 2011 surpassed the 
pre-crisis average, reaching $1.5 trillion, despite persistent uncertainty 
in the global economy. However, flows still remained more than 20 per cent 
below their 2007 peak. UNCTAD predicts slower FDI growth in 2012, with 
flows levelling off at about $1.6 trillion. Longer-term projections show a 
moderate but steady rise, with global FDI reaching $1.8 trillion in 2013 
and $1.9 trillion in 2014, barring any macro-economic shocks.

FDI inflows in 2011 increased across all major economic regions. Flows to 
developing countries reached a record $684 billion, up 11 per cent. 
Transition economies saw flows increase by 25 per cent to $92 billion. 
Flows to developed countries grew by 21 per cent, following three years of 
decline, but still a quarter below the level of the pre-crisis average. 

The picture of a global increase in FDI contrasts with developments in 
Africa and in the least developed countries (LDCs), where the FDI 
recession continued. However, the decline in Africa was marginal and due 
largely to divestments from North Africa, while inflows to sub-Saharan 
Africa recovered to $37 billion – near their historic peak. Future 
prospects may therefore be brighter.

Investment policy-making is at a cross-roads, reflected by intensified 
review and revision of existing national and international investment 
regimes. Many countries continue to liberalize and promote foreign 
investment. At the same time, new regulatory and control measures are 
introduced, although often in pursuit of other policy objectives, such as 
industrial policy. Negotiations have also shifted to regional investment 
treaty-making, while the negotiation of bilateral investment treaties has 

The Report's special topic this year focuses on the issue of investment 
policymaking and its contribution to sustainable development. The Report 
includes the full contents of UNCTAD’s new Investment Policy Framework for 
Sustainable Development (IPFSD), which provides background, context and 
possible evolutions to national and international investment policymaking. 
The IPFSD consists of three main components: core principles, guidelines 
for national investment policy-setting and options for international 
investment treaty formulation. 

UNCTAD’s IPFSD recognizes that mobilizing investment and ensuring that it 
contributes to sustainable development objectives is a priority for all 
countries. A new generation of investment policies is emerging, as 
governments pursue a broader and more complex development policy agenda 
that has to address new challenges, such as climate change and the recent 
economic crisis. The Framework provides a reference point for policymakers 
and the wider investment-development community as they seek to tackle some 
of these challenges while maintaining a favourable investment climate. 

UNCTAD’s IPFSD has been designed as a 'living document' and IPFSD online 
establishes an interactive platform that will enable the 
investment-development community to exchange views, suggestions and 
experiences that will help us continuously improve the Framework. 

We hope you find this year's Report interesting and useful, and welcome 
any comments or suggestions you may have about our work.

With best regards, 

James X. Zhan
Investment & Enterprise Division
Team Leader, World Investment Report
United Nations Conference on Trade & Development
Palais des Nations, Geneva
Tel: +41 22 9175797
Twitter: @unctadwif