UNCTAD says that global foreign direct investments declined in 2018

The United Nations Conference on Trade and Development (UNCTAD) has stated in the 2019 World Investment Report (WIR) that there has been a global decline in foreign direct investment (FDI) flows. Jamaica is included in this decline, receiving an estimated figure of US$775 million in FDI in 2018; a 13% downturn in comparison to 2017’s performance. The WIR was released on June 12, 2019.

The World Investment Report 2019 indicates that Global FDI flows have slid by 13% in 2018, to US$1.3 trillion from $1.5 trillion the previous year – the third consecutive annual decline.  This is the result of  the declining investment performance in multiple regions, for example, FDI flows to Latin America and the Caribbean decreased by 6 per cent.

The report was optimistic about Jamaica’s prospects for the future, saying that the island is the most diversified economy in the Small Island Developing States (SIDS) group, and was one of the top 5 SIDS states to receive FDI inflows in 2018.

UNCTAD theorizes that with the transition to the Special Economic Zone regime, the country will be able to attract and host more FDI. The WIR said, “Three SEZ megaprojects are in the pipeline.. [and] capital requirements for these megaprojects are estimated at $8 billion – nearly 60 per cent of the country’s GDP – which could have a sizeable impact on FDI inflows.”

 Jamaica was also noted as having three out of 8 of the largest announced SIDS greenfield projects in 2018, signifying the country’s ability to attract new investments.  These projects were announced by outsourcing company Sutherland Global Services, airport management company Grupo Aeroportuario del Pacifico (GAP), and China Communications Construction Company.

Combating global investment trends

President of JAMPRO, Diane Edwards said that the Agency has noted the global downturn in investment flows, and is working to ensure that Jamaica keeps its status as one of the top SIDS to attract FDI. She said, “The global contraction in investment flows is concerning and we have been monitoring this trend; it is now our goal to aggressively increase our efforts in promoting Jamaica’s improving macroeconomic position and the myriad of investment opportunities that will drive FDI in 2019 and beyond.”

JAMPRO is expecting multiple projects to come on stream that should boost the island’s FDI this year, including the Amaterra project, the construction of hotels in 2019 in Llandovery, St Ann by Karisma Hotels and Resorts, and the Norman Manley International Airport (NMIA) divestment.  Ms. Edwards also explained that while the WIR highlighted a dip in tourism-related projects to the island as a cause for Jamaica’s decline in its FDI figures, there has been an increase in local investor confidence in the sector with the S Hotel, R Hotel, Oceana, and AC Marriott hotel developments taking place.

She said, We are pleased that more local investors are looking to Jamaica as the ideal location for their projects; that is an encouraging development in our economy. What we will do is continue our marketing and facilitation services for our local and foreign investors, so we can see both FDI and Local Direct Investment (LDI) grow. This is the ideal situation for Jamaica’s economic growth and stability.”

Source: 
JAMPRO
Published Date: 
Friday, June 21, 2019
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