2022年世界投资报告-WORLD INVESTMENT REPORT-联合国贸发会

WORLDINVESTMENTREPORT

UNITEDNATIONSCONFERENCEONTRADE

ANDDEVELOPMENT

2022

INTERNATIONALTAXREFORMS

ANDSUSTAINABLEINVESTMENT

Geneva,2022

SalesNo.E.22.II.D.20

©2022,UnitedNations

Allrightsreservedworldwide

RequeststoreproduceexcerptsortophotocopyshouldbeaddressedtotheCopyrightClearanceCenterat.

Allotherqueriesonrightsandlicences,includingsubsidiaryrights,shouldbeaddressedto:

UnitedNationsPublications

405East42ndStreet

NewYork,NewYork10017

UnitedStatesofAmerica

Email:publications@

Website:

ThedesignationsemployedandthepresentationofmaterialonanymapinthisworkdonotimplytheexpressionofanyopinionwhatsoeveronthepartoftheUnitedNationsconcerningthelegalstatusofanycountry,territory,cityorareaorofitsauthorities,orconcerningthedelimitationofitsfrontiersorboundaries.

MentionofanyfirmorlicensedprocessdoesnotimplytheendorsementoftheUnitedNations.Thispublicationhasbeeneditedexternally.

UnitedNationspublicationissuedbytheUnitedNationsConferenceonTradeandDevelopment.

UNCTAD/WIR/2022

ISBN978-92-1-113049-2

eISBN978-92-1-001543-1

PrintISSN1020-2218

OnlineISSN2225-1677

Preface

iii

PREFACE

Globalflowsofforeigndirectinvestmentrecoveredtopre-pandemiclevelslastyear,reaching$1.6trillion.Cross-borderdealsandinternationalprojectfinancewereparticularlystrong,encouragedbyloosefinancingconditionsandinfrastructurestimulus.However,therecoveryofgreenfieldinvestmentinindustryremainsfragile,especiallyindevelopingcountries.

Thisfragilegrowthofrealproductiveinvestmentislikelytopersistin2022.ThefalloutofthewarinUkrainewiththetriplefood,fuelandfinancecrises,alongwiththeongoingCOVID-19pandemicandclimatedisruption,areaddingstresses,particularlyindevelopingcountries.Globalgrowthestimatesfortheyeararealreadydownbyafullpercentagepoint.Thereissignificantriskthatthemomentumforrecoveryininternationalinvestmentwillstallprematurely,hamperingeffortstoboostfinanceforsustainabledevelopment.

TheWorldInvestmentReportsupportspolicymakersbymonitoringglobalandregionalinvestmenttrendsandnationalandinternationalinvestmentpolicydevelopments.ThereportreviewsinvestmentintheSustainableDevelopmentGoalsandinclimatechangemitigationandadaptation.Italsolooksatsustainablefinancetrendsincapitalmarketsandamonginstitutionalinvestors.

Thecomingyearswillseetheimplementationoffundamentalreformsininternationaltaxation.Thesereformsareexpectedtohavemajorimplicationsforinvestmentpolicy,especiallyincountriesthatmakeuseoffiscalincentivesandspecialeconomiczones.Thereportofthisyearprovidesaguideforpolicymakerstonavigatethecomplexnewtaxrulesandtoadjusttheirinvestmentstrategies.

Icommendthisreporttoallengagedinpromotinginvestmentinsustainabledevelopment.

AntónioGuterres

Secretary-GeneraloftheUnitedNations

iv

WorldInvestmentReport2022Internationaltaxreformsandsustainableinvestment

FOREWORD

TheglobalenvironmentforinternationalinvestmentchangeddramaticallywiththeonsetofthewarinUkraine,whichoccurredwhiletheworldwasstillreelingfromtheimpactofthepandemic.Thewarishavingeffectswellbeyonditsimmediatevicinity,causingacost-of-livingcrisisaffectingbillionsofpeoplearoundtheworld,withrisingpricesforenergyandfoodreducingrealincomesandaggravatingdebtstress.InvestoruncertaintyandriskaversitycouldputsignificantdownwardpressureonglobalFDIthisyear.

Theeffectsoninvestmentflowstodevelopingcountriesin2022andbeyondaredifficulttoanticipate.ApartfromdirecteffectsoncountriesinCentralAsiawithcloseinvestmenttiesintheregion,theimpactonotherswillbemostlyindirectanddependontheextentoftheirexposuretothetriplecrisis–infood,fuelandfinance–causedbytheconflictandtheirconsequenteconomicandpoliticalinstability–keydeterminantsofinternationalprivateinvestment.Ifthepastisanindication,thelasttimefoodpriceswerethishigh–duringthe2007–2008foodcrisis–therewereriotsinmorethan60countries.

Theoutcomewillbeofenormoussignificancefordevelopmentprospects.Theneedforinvestmentinproductivecapacity,intheSustainableDevelopmentGoals(SDGs)andinclimatechangemitigationandadaptationisenormous.Currentinvestmenttrendsintheseareasarenotunanimouslypositive.AlthoughglobalFDIflowsreboundedstronglyin2021,industrialinvestmentremainsweakandwellbelowpre-pandemiclevels,especiallyinthepoorestcountries;SDGinvestment–projectfinanceininfrastructure,foodsecurity,waterandsanitation,andhealth–isgrowingbutnotenoughtoreachthegoalsby2030;andinvestmentinclimatechangemitigation,especiallyrenewables,isboomingbutmostofitremainsindevelopedcountriesandadaptationinvestmentcontinuestolagwellbehind.

Worryingly,someemergingindicatorssuggestthatthewarinUkrainecouldbecomeasetbackintheenergytransition,withincreasedfossilfuelproductionincountriespreviouslycommittedtoreducingemissions.Inthefirstquarterof2022,mostofthe5,000largestmultinationalenterprisesreviseddownwardtheirearningsforecastsfor2022.Alarmingly,whileextractiveindustriesrevisedupwardstheirexpectedearnings,withoilandgasat+22percentandcoalat+32percentofexpectedearnings,renewableenergycompaniesreleaseddownwardrevisionsofanaverageof-22percentofexpectedearnings,lendingcredencetotheintuitionthatcurrentconditionsriskreversingyearsofprogresstowardsinvestinginsustainableenergy.ThisisespeciallyworryingasglobalCO2emissionsfromenergycombustionandindustrialprocessesreboundedin2021toreachtheirhighesteverannuallevel.

ToachievetheSDGsitisimperativethatmorefundsarechanneledtowheretheyaremostneeded,ontheground,indevelopingcountries.Butalsoanimportanteffortwillhavetocomefromdomesticresourcemobilization.Fromthatperspective,theongoinginternationaltaxreformsledbytheG20andtheOECD,whichwestudyextensivelyinthisreport,areamajorstepforward.Theyaimtoensurethatmultinationalspaytheirfairshareoftaxeswheretheyoperate,andtheyhavethepotentialtogiveasignificantboosttotaxrevenuesindevelopingcountries.

Foreword

v

However,thewarinUkrainehasfurthercomplicateddomesticresourcemobilizationindevelopingcountries,alreadyworsenedbytheCOVID-19pandemicandtheincreasedfrequencyofnaturaldisastersinthecontextofclimatechange.Inthemidstofrisingandunsustainabledebtlevels,withoutadequatemultilateralmechanismsforrestructuring,countriesarebeingforcedtoreducetheirfiscalspaceatatimewhentheyshouldbeincreasingit.

TheInternationalLabourOrganizationsuggeststhatthesocialprotectionfinancinggapstandsat$1.2trillionperyearindevelopingcountries,partofthe$4.3trillionweatUNCTADestimateastheyearlygapinSDGfinancing.Andevenwithfoodandenergyimportbills,andworseningcostsofborrowingduetohigherinterestrates,developingcountries’primaryfiscalbalancehasshrunkby$315billionsincethestartofthewar.

Thatiswhyinternationalinvestmentplaysacriticalcomplementaryroletodomesticpublicinvestment.Andthenewtaxruleswillaffecthowcountrieshavetraditionallypromoted–andoftencompeted–forinternationalinvestment,throughlowtaxrates,fiscalincentivesandspecialeconomiczones.

Thetaxreformsareanopportunityfordevelopingcountries,notonlyfromarevenueperspective,butalsofromaninvestmentattractionperspective.Strategically,taxcompetitionwilldecrease.Practically,theneedtoreviewtheinvestmentpromotiontoolkitisachancetomakecostlyincentivesmoresustainable.

Therewillbechallenges.Developingcountriesfaceconstraintsintheirresponsestothereforms,becauseofalackoftechnicalcapacitytodealwiththecomplexityofthetaxchanges,andbecauseofinvestmenttreatycommitmentsthatcouldhindereffectivefiscalpolicyaction.Theinternationalcommunityhastheobligationtohelp.Itcandosothroughtechnicalassistance,byagreeingasolutiontoproblemscausedbyinternationalinvestmentagreements,andbyputtinginplacesafeguardsthatprotectthetaxrevenuesofthepoorestcountries.Theseeffortsshouldbepartofabroadermultilateralendeavortowardsreininginillicitfinancialflows,especiallyinthedevelopingworld.Thisreportpointstheway.

Itisimportantthatweactnow.Eventhoughcountriesfaceveryalarmingimmediateproblemsstemmingfromthecost-of-livingcrisis,itisimportantweareabletoinvestinthelongterm.Becausetheshorttermandlongtermstartatthesametime.Andthetimeisnow.

RebecaGrynspan

Secretary-GeneralofUNCTAD

vi

WorldInvestmentReport2022Internationaltaxreformsandsustainableinvestment

ACKNOWLEDGEMENTS

TheWorldInvestmentReport2022waspreparedbyateamledbyJamesX.Zhan.TheteammembersincludedRichardBolwijn,BrunoCasella,JosephClements,BernaDogan,HamedElKady,KumiEndo,AnastasiaLeskova,MassimoMeloni,AnthonyMiller,AbrahamNegash,YongfuOuyang,DianaRosert,AmeliaU.Santos-Paulino,ChangbumSon,AstritSulstarova,ClaudiaTrentini,JoergWeberandKee

HweeWee.

ResearchsupportandinputswereprovidedbyGregoryAuclair,HamidrezaBakhtiarizadeh,MagdalenaBulitGoñi,JoãodeCamargoMainente,MalouCelander,AntoineCornevin,JulietteGailly,TiffanyGrabski,VicenteGuazzini,MaximeLadrière,CorliLeRoux,IanaMiachenkova,JosefOstřanský,HayleyMariePallan,SangHyunPark,LisaRemke,SamuelRingier,RitaSchmutz,BaptisteSouillard,IrinaStanyukova,IlanStrauss,YihuaTengandAnqiWang.

CommentsandcontributionswereprovidedbyYosephAsmelash,ChantalDupasquier,IsabelGarzaRodriguezandPaulWessendorp,aswellastheOfficeoftheSecretaryGeneral.

StatisticalassistancewasprovidedbyMohamedChirazBalyandBradleyBoicourt.ITassistancewasprovidedbyChrysanthiKourti.

Themanuscriptwascopy-editedbyLiseLingo.Thedesignofthechartsandinfographics,andthetypesettingofthereportweredonebyThierryAlran,assistedbyAlexandraSoniaGarcês.ProductionofthereportwassupportedbyElisabethAnodeau-MareschalandKatiaVieu.AdditionalsupportwasprovidedbyNathalieEulaertsandSivanlaSikounnavong.

MichaelKeenactedasprincipaladvisoronthethemechapterofthereport.ThethemechapteralsobenefitedfromthecollaborationwiththeteamattheWUGlobalTaxPolicyCentreofViennaUniversityofEconomicsandBusinessledbyJeffreyOwens,includingIvanLazarov,BelissaFerreiraLiotti,RuthWamuyuMainaandJoyWaruguruNdubai.

Atvariousstagesofthepreparationofthethemechapter,inparticularduringthekick-offeventattheWorldInvestmentForumandvariousexpertmeetingsorganizedtodiscussdrafts,theteambenefitedfromcommentsandinputsreceivedfromexternalexperts:FlurimAliu,DavidBradbury,JulienChaisse,AlexCobham,MichaelDevereux,LorraineEden,JavierGarcia-Bernardo,AnaCintaGonzalezCabral,TiborHanappi,LiselottKana,AnitaKapur,PetrJanský,MichaelLennard,PierceO’Reilly,ZahiraQuattrocchi,AugustinRedonda,ToveMariaRydingandLoganWort.

Theteamisgratefulforadvice,inputandcommentsatallstagesfromcolleaguesininternationalorganizationsandotherexperts,includingVincentBeyer,MartinDietrichBrauch,AbdulMuheetChowdhary,SabrineMarsit,SuzyH.Nikièma,MarceloOlarreaga,JoshuaPaine,MaríaFlorenciaSarmiento,AlessandroTurina,ChristianVolpeMartincusandSebastianWuschka.

Numerousofficialsincentralbanks,nationalgovernmentagencies,internationalorganizationsandnon-governmentalorganizationsalsocontributedtothereport.

TableofContents

vii

TABLEOF

CONTENTS

PREFACE iii

FOREWORD iv

ACKNOWLEDGEMENTS vi

ABBREVIATIONS x

KEYMESSAGES xi

CHAPTERI.GLOBALINVESTMENTTRENDSANDPROSPECTS

1

A.INVESTMENTTRENDS

2

1.Globaltrends

2

2.Trendsbygeography

7

3.Trendsbytypeandsector

22

B.SDGANDCLIMATECHANGEINVESTMENTTRENDS

26

1.SDGinvestmenttrends

26

2.Climatechangeandinvestment

32

C.INTERNATIONALPRODUCTION

39

1.Keyindicatorsofinternationalproduction

39

2.InternationalizationtrendsofthelargestMNEs

40

3.InternationalizationtrendsofdigitalMNEs

42

4.InternationalizationtrendsofSMEs

47

CHAPTERII.RECENTPOLICYDEVELOPMENTSANDKEYISSUES

53

INTRODUCTION

54

A.NATIONALINVESTMENTPOLICIES

56

1.Overalltrends

56

2.M&Acontrolsaffectingforeigninvestors

63

B.INTERNATIONALINVESTMENTPOLICIES

65

1.TrendsinIIAs:newtreatiesandotherpolicydevelopments

65

2.Keyinvestment-relatedissuesinmegaregionalagreements

69

3.TrendsinISDS:newcasesandoutcomes

73

viii

WorldInvestmentReport2022Internationaltaxreformsandsustainableinvestment

C.KEYTRENDSINTHETAXATIONOFINVESTMENT

76

1.Evolutionofcorporateincometaxrates

77

2.Taxincentivesforinvestment

78

3.Taxationmeasuresandinternationalinvestmentpolicies

87

CHAPTERIII.THEIMPACTOFAGLOBALMINIMUMTAXONFDI

99

INTRODUCTION

100

A.HOWAMINIMUMTAXAFFECTSFDI–ATHEORETICALFRAMEWORK

103

1.Tax-investmentspilloverchannels

103

2.ThemechanicsofPillarII

107

3.PillarIIandFDI

109

B.ESTIMATINGTHEIMPACTOFPILLARIIONFDI

111

1.CorporateincometaxesonFDI

111

2.PillarIIandthetaxationofFDIincome

118

3.TheeffectofhighertaxesonglobalFDI

126

C.IMPLICATIONSOFPILLARIIFORTAXINCENTIVES

131

1.TaxincentivesandETRs

131

2.PillarIIandtaxincentives:anempiricalassessment

132

3.ImpactoftheGloBErulesontaxincentives

135

4.Detailedassessmentofimpactonin-scopeincentives

137

D.RESHAPINGINVESTMENTPOLICYFORAGLOBALMINIMUM

TAXENVIRONMENT

142

1.Fiscalinvestmentpolicyresponses

142

2.Challengesforinvestmentpolicymakersandinstitutions

151

3.Strategicinvestmentpolicyimplications

153

CHAPTERIV.CAPITALMARKETSANDSUSTAINABLEFINANCE

161

INTRODUCTION

162

A.SUSTAINABILITY-THEMEDCAPITALMARKETPRODUCTS

164

1.Sustainablefunds

164

2.Sustainablebondmarkets

170

TableofContents

ix

B.INSTITUTIONALINVESTORS

175

C.STOCKEXCHANGESANDMARKETINFRASTRUCTURE

179

1.Stockexchangesandderivativesexchanges

179

2.Advancinggenderequality

182

D.POLICIES,REGULATIONSANDSTANDARDS

184

1.Nationalsustainablefinancepoliciesandregulations

184

2.Internationalregulationsandstandardsetting

190

3.Lessonslearned

192

E.CLIMATEACTION

193

1.Carbonemissionsinpublicmarkets

193

2.TheNetZeromovement

194

3.Climateactionbypublicpensionandsovereignwealthfunds

196

4.Stockexchangestrategiesforclimateaction

198

REFERENCES

203

ANNEXTABLES

209

Annextable1.FDIflows,byregionandeconomy,2016–2021

210

Annextable2.FDIstock,byregionandeconomy,2000,2010and2021......214

ONLINEONLY:REGIONALTRENDS

AFRICA

DEVELOPINGASIA

LATINAMERICAANDTHECARIBBEAN

STRUCTURALLYWEAK,VULNERABLEANDSMALLECONOMIES:

LeastDevelopedCountries(LDCs)

LandlockedDevelopingCountries(LLDCs)

SmallislanddevelopingStates(SIDS)

x

WorldInvestmentReport2022Internationaltaxreformsandsustainableinvestment

ABBREVIATIONS

AETR

averageeffectivetaxrate

IIR

IncomeInclusionRule

AfCFTA

AfricanContinentFreeTradeArea

IMF

InternationalMonetaryFund

ASEAN

AssociationofSouth-EastAsianNations

IOSCO

InternationalOrganizationofSecuritiesCommissions

AUM

assetsundermanagement

IP

intellectualproperty

BEA

BureauofEconomicAnalysis

IPA

investmentpromotionagency

BEPS

BaseErosionandProfitShifting

IPFSD

InvestmentPolicyFrameworkforSustainableDevelopment

BIT

bilateralinvestmenttreaty

ISDS

investor–Statedisputesettlement

CbCR

country-by-countryreporting

ISSB

InternationalSustainabilityStandardsBoard

CDP

CarbonDisclosureProject

LDC

leastdevelopedcountry

CIS

CommonwealthofIndependentStates

LLDC

landlockeddevelopingcountry

CIT

corporateincometax

M&A

mergerandacquisition

COVID-19

coronavirusdisease2019

METR

marginaleffectivetaxrate

CPTPP

ComprehensiveandProgressiveAgreement

forTrans-PacificPartnership

MFN

MNE

mostfavourednation

multinationalenterprise

CSR

corporatesocialresponsibility

NAFTA

NorthAmericanFreeTradeAgreement

DTT

doubletaxationtreaty

NT

nationaltreatment

ECT

EnergyCharterTreaty

OFC

offshorefinancialcentre

EIA

EconomicImpactAssessment

OIC

OrganisationofIslamicCooperation

ESG

environmental,socialandgovernance

PPP

public-privatepartnership

ETR

effectivetaxrate

QDMTT

qualifieddomesticminimumtop-uptax

EU

EuropeanUnion

R&D

researchanddevelopment

FET

fairandequitabletreatment

RCEP

RegionalComprehensiveEconomicPartnership

FTA

freetradeagreement

SDGs

SustainableDevelopmentGoals

GATS

GeneralAgreementonTradeinServices

SEZ

specialeconomiczone

GATT

GeneralAgreementonTradeandTariffs

SIDS

smallislanddevelopingStates

GCI

GuidanceonCoreIndicators

SMEs

smallandmedium-sizedenterprises

GDP

grossdomesticproduct

SSE

SustainableStockExchanges

GHG

greenhousegas

STR

statutorytaxrate

GILTI

globalintangiblelow-taxedincome

STTR

SubjecttoTaxRule

GloBE

GlobalAnti-BaseErosion

TIP

treatywithinvestmentprovision

GSSB

GRIStandardSettingBoard

TRIPS

Trade-RelatedAspectsofIntellectualPropertyRights

GTED

GovernmentTaxExpenditureDatabase

UNCITRAL

UnitedNationsCommissiononInternationalTradeLaw

GVC

globalvaluechain

UNEP

UnitedNationsEnvironmentProgramme

ICCC

IndependentConsumerandCompetitionCommission

UNODC

UnitedNationsOfficeonDrugsandCrime

ICT

informationandcommunicationtechnology

USMCA

UnitedStates–Mexico–CanadaAgreement

ICMA

InternationalCapitalMarketAssociation

WAEMU

WestAfricanEconomicandMonetaryUnion

ICSID

InternationalCentreforSettlementofInvestmentDisputes

WFE

WorldFederationofExchanges

IFC

InternationalFinanceCorporation

WHT

withholdingtax

IFRS

InternationalFinancialReportingStandards

WIR

WorldInvestmentReport

IIA

internationalinvestmentagreement

WTO

WorldTradeOrganization

KeyMessages

xi

KEYMESSAGES

INVESTMENTTRENDSANDPROSPECTS

Globalforeigndirectinvestment(FDI)flowsin2021were$1.58trillion,up64percentfromtheexceptionallylowlevelin2020.Therecoveryshowedsignificantreboundmomentum,withboomingmergerandacquisition(M&A)marketsandrapidgrowthininternationalprojectfinancebecauseofloosefinancingconditionsandmajorinfrastructurestimuluspackages.

However,theglobalenvironmentforinternationalbusinessandcross-borderinvestmentchangeddramaticallyin2022.ThewarinUkraine–ontopofthelingeringeffectsofthepandemic–iscausingatriplefood,fuelandfinancecrisisinmanycountriesaroundtheworld.InvestoruncertaintycouldputsignificantdownwardpressureonglobalFDIin2022.

+64%

GlobalFDI

rebound

$1.6trillion

The2021growthmomentumisunlikelytobesustained.GlobalFDIflowsin2022will

likelymoveonadownwardtrajectory,atbestremainingflat.Newprojectactivityis

alreadyshowingsignsofincreasedriskaversionamonginvestors:preliminarydatafor

Q12022showgreenfieldprojectnumbersdown21percentandinternationalproject

financedealsdown4percent.

The2021FDIrecoverybroughtgrowthinallregions.However,almostthreequartersof

theglobalincreasewasduetotheupswingindevelopedcountries,whereFDIreached

$746billion–morethandoublethe2020level.Theincreasewasmostlycausedby

M&Atransactionsandhighlevelsofretainedearningsofmultinationalenterprises(MNEs).Those,inturn,ledtosizeableintrafirmfinancialflowsandmajorFDIfluctuationsinlargeinvestmenthubs.

Thehighlevelsofretainedearningsin2021weretheresultofrecordMNEprofits.Theprofitabilityofthelargest5,000MNEsdoubledtomorethan8percentofsales.Profitswerehighespeciallyindevelopedcountries,becauseofthereleaseofpent-updemand,lowfinancingcostsandsignificantgovernmentsupport.

Despitehighprofits,theappetiteofMNEsforinvestinginnewproductiveassetsoverseasremainedweak.Whileinfrastructure-orientedinternationalprojectfinancewasup68percentandcross-borderM&Aswereup43percent,greenfieldinvestmentnumbersincreasedbyonly11percent,stillonefifthbelowpre-pandemiclevels.Thevalueofgreenfieldannouncementsoverallroseby15percent,to$659billion,butremainedflatindevelopingcountriesat$259billion–stagnatingatthelowestleveleverrecorded.Thisisaconcern,asnewinvestmentsinindustryarecrucialforeconomicgrowthanddevelopmentprospects.

x2

2021

MNE

proits

FDIflowstodevelopingeconomiesgrewmoreslowlythanthosetodevelopedregions

butstillincreasedby30percent,to$837billion.Theincreasewasmainlytheresult

ofstronggrowthperformanceinAsia,apartialrecoveryinLatinAmericaandthe

Caribbean,andanupswinginAfrica.Theshareofdevelopingcountriesinglobalflows

remainedjustabove50percent.

•FDIflowstoAfricareached$83billion,from$39billionin2020.Mostrecipientssawa

moderateriseinFDI.Thetotalforthecontinentwasinflatedbyasinglelargeintrafirm

financialtransaction.Greenfieldannouncementsremaineddepressed,butinternational

projectfinancedealswereup26percent,withstronggrowthinextractiveindustries.

Developed

Developing

LDCs

xii

WorldInvestmentReport2022Internationaltaxreformsandsustainableinvestment

+134%

+30%

+13%

•IndevelopingAsia,despitesuccessivewavesofCOVID-19,FDIrosetoanall-timehighforthethirdconsecutiveyear,reaching$619billion.Asiaisthelargestrecipientregion,accountingfor40percentofglobalFDI.However,inflowsremainhighlyconcentrated;sixeconomiesaccountformorethan80percentofFDItotheregion.

•FDIinLatinAmericaandtheCaribbeanroseby56percentto$134billion.Mosteconomiessawinflowsrebound,withonlyafewexperiencingfurtherdeclines,causedbypandemic-inducedeconomiccrises.Totalinflowsremainedabout

15percentbelowthepre-pandemiclevel.

•FDIflowstothestructurallyweak,vulnerableandsmalleconomiesroseby15percentto$39billion.Inflowstotheleastdevelopedcountries(LDCs),landlockeddevelopingcountries(LLDCs)andsmallislanddevelopingStates(SIDS)combinedaccountedforonly2.5percentoftheworldtotalin2021,downfrom3.5percentin2020.

InternationalinvestmentinsectorsrelevantfortheSustainableDevelopmentGoals(SDGs)indevelopingcountriesincreasedsubstantiallyin2021,by70percent.ThecombinedvalueofgreenfieldannouncementsandinternationalprojectfinancedealsinSDGsectorsexceededthepre-pandemiclevelbyalmost20percent.Mostofthegrowthwenttorenewableenergy.InvestmentactivityinotherSDG-relatedsectors–includinginfrastructure,foodandagriculture,health,andWASH–sawonlyapartialrecovery.

Renewableenergyandenergy-efficiencyprojectsrepresentthebulkofclimatechangeinvestments.Internationalprivateinvestmentinclimatechangesectorsisdirectedalmostexclusivelytomitigation;only5percentgoestoadaptationprojects.Morethan60percentisinvestedindevelopedcountries,where85percentofprojectsarepurelyprivatelyfinanced.Incontrast,almosthalfoftheprojectsindevelopingcountriesrequiresomeformofpublicsectorparticipation.

Climateinvestment

2021

withtotal

projectvalues

2x

InternationalprojectfinanceisincreasinglyimportantforSDGandclimatechangeinvestment.Thestronggrowthperformanceofinternationalprojectfinancecanbeexplainedbyfavourablefinancingconditions,infrastructurestimulusandsignificantinterestonthepartoffinancialmarketinvestorstoparticipateinlarge-scaleprojectsthatrequiremultiplefinanciers.Theinstrumentalsoenablesgovernmentstoleveragepublicinvestmentthroughprivatefinancepartic