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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 slowed. 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 Director Investment & Enterprise Division Team Leader, World Investment Report United Nations Conference on Trade & Development Palais des Nations, Geneva Tel: +41 22 9175797 www.unctad.org/diae Twitter: @unctadwif wir