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WIR Dear Member of the WIN, It is my pleasure to share with you the main findings of UNCTAD's World Investment Report 2013, which is being launched today in over 50 global locations. The report presents the latest global trends and prospects on foreign direct investment (FDI) and recent international and national policy developments, as well as key emerging investment-development related issues. The report's main findings: Global FDI flows declined 18 per cent in 2012 to $1.35 trillion, below the pre-economic crisis level. The FDI recovery that started in 2010 and 2011 will now take longer than expected: UNCTAD forecasts FDI in 2013 will remain at a similar level to 2012 and reach $1.6 trillion in 2014. In 2012 – for the first time ever – developing economies absorbed more FDI than developed countries; their share rose to 52 per cent of global flows versus 42 per cent in developed economies (with the remainder going to economies in transition). In addition, developing economies generated almost one third of global FDI outflows. With respect to international investment policies, more countries included a sustainable development dimension in their investment treaties and created more regulatory “space” for maximizing the positive and minimizing the potential negative effects of FDI. Close to half of all bilateral investment treaties (1,300) have reached the stage where they can be terminated at any time, which creates opportunities and challenges for policymakers. This year's thematic chapter of the report is devoted to the topic of global value chains (GVCs) and their development implications. The report shows how GVCs form the nexus between trade and investment: the vast majority of global trade - some 80 per cent - is linked to the international production networks of transnational corporations, and countries with a higher presence of FDI relative to the size of their economies tend to have a higher participation in GVCs and to generate more domestic value added from trade. The report finds that developing countries can effectively use GVCs for building productive capacity, economic upgrading, and social up-scaling: in the past two decades, their share in global value added trade increased from 20 per cent in 1990 to over 40 per cent today. However, such benefits are not automatic and there are important risks associated with GVCs for host countries. Hence policy matters. The report therefore proposes policies for productive capacity building for GVC participation, a social and environmental governance framework for GVCs, and a coordinated approach to synergising trade and investment policymaking and promotion activities. To download the selected chapters of the report, please go to UNCTAD's website or click here to access the overview. I hope you find the report's findings useful and interesting: we will continue to keep you updated throughout the year with the latest changes in quarterly FDI trends, as well as policy developments. With best regards, James Zhan Director Investment & Enterprise Division United Nations Conference on Trade & Development Palais des Nations, Geneva Tel: +41 22 9175797 www.unctad.org/diae www.unctad.org/wir (World Investment Reports)