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Fdi Least Developed Country

In: Business and Management

Submitted By tawfiq211
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Foreign direct investment in least developed countries (LCD’S):

Some 850 million people, or 12 per cent of the world’s population, live in the 48 least developed countries (LDCs). These countries are the world’s poorest, with per capita GDP under $1,086,and with low levels of capital, human assets, exports and technological development.

The Programme of Action of the Least Developed Countries for the Decade 2001-2010 adopted at the Third United Nations Conference of the Least Developed Countries in 2001 in Brussels stated that foreign direct investment (FDI) was an important source of capital formation, know-how, employment generation and trade opportunities for LDCs and called for accelerating FDI inflows into these countries. Since 2001, both LDC governments and their development partners have indeed pursued proactive FDI promotion policies. Although there was an abrupt interruption of the secular trend in 2009, FDI flows to LDCs grew at an annual rate of 15 per cent during 2001-2010 as a whole to reach an estimated $24 billion by 2010, compared with $7.1 billion in 2001, and their share in global FDI flows rose from 0.9 per cent to over 2 per cent.

The Brussels Declaration contained 30 international development goals for LDCs, including the attainment of an investment to GDP ratio of 25 per cent and an annual GDP growth rate of at least 7 per cent in order to achieve sustainable development and poverty reduction in LDCs. The Brussels goal of 7 per cent growth is being achieved by LDCs as a group and by 15 LDCs individually (UNCTAD, 2010, p 5).1 However this improved performance has been the result of an exceptional boom in international commodity prices and was not broad-based across LDCs. Furthermore, their per capita GDP growth is modest and is lagging behind that of other developing countries. Indeed 11 LDCs even saw their per capita income decline

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