Kazakhstan and the United Kingdom in the lead in terms of FDI stock to GDP - WOC analysis

In recent years especially important for many developing countries is becoming receipt of the latest production and management technologies together with foreign investment.

In anticipation of the VI Astana Economic Forum the analytical service - World Organization of Creditors (WOC) - has compared the political and financial capitals of several countries on individual indicators. In particular, as an important part of determining the investment climate have been examined the economic and social indicators, as well as indicators that show the current situation with the influx of foreign investment.

The report took into consideration such cities like Moscow, Kiev , Astana, Minsk, Baku, London, Berlin, Paris, Washington, New York, Beijing and Almaty being the largest city of Kazakhstan in terms of population.

Unfortunately, data on attracted FDI are only available for 4 of the 12 cities having been examined, so it has been impossible to compare investment attractiveness of each city from the point of view of foreign investors in this indicator. However, the available data on the inflow of FDI in 2011 shows that the ratio of FDI to gross regional product (GRP ) is of 1.2 % for Moscow and almost 90 % for Minsk. In Astana, Kiev the index is at relatively high levels of 12.4% and 9.4 % respectively.

The leaders of the absolute value of FDI inflows in 2009-2011 are the U.S. and China, where in 2011 the level of FDI reached U.S. $ 227 billion and $ 124 billion respectively.

Note that the inflow of FDI in the world in 2011 increased compared to the year before - up to 1.6 trillion dollars, but in 2012 the trend changed, and FDI inflows declined - by 18 % to 1.31 trillion dollars - to the levels reached in 2009. Recovery of FDI in the world, having begun in 2010 and 2011, will take more time than expected according to the experts. It is likely that in 2013 and 2014 indicator will show a slight increase, but this scenario can be called optimistic.

It should be noted that the investment or city country image is formed depending on a number of factors. They are, in particular, the political component, the state of the economy and the social sphere, as well as the information component, which includes information about the previous positive or negative experience with activities in the territory of other foreign investors.

At the same time, more telling is the ratio of FDI to gross domestic product (GDP ) of a state. Here the picture is changing. This ratio in 2009 and 2010 is maximum in Kazakhstan reaching 11.5 % and 7.3 %, respectively . Note that the second state-by-value indicator in 2009 and 2010 is in the Ukraine, but it is after Kazakhstan by a considerable margin. In 2011, the level of FDI inflows to GDP in Kazakhstan continued to decline, reaching 6.9%. However it was able to escape just ahead of Belarus, where in 2011 FDI inflows to GDP was 7.2 %.

The presented data on FDI inflows indicate a high investment attractiveness of the Republic of Kazakhstan , which is supported by, inter alia, economic performance of the country. For example, per capita GDP in 2012 increased compared to 2010 by 33 % and amounted, according to the International Monetary Fund, 12,021 dollars, and in the next 3 years, according to the experts, it will increase by another 36%.

Analysis of the attitude FDI stock to GDP shows the attractiveness of the states to foreign investors for a rather extended period of time.

Kazakhstan and the United Kingdom are in the lead in this list with values ​​of 50% and 49%, in 2011 respectively. Followed by Ukraine - 39% of FDI stock to GDP, and France - 35 %. This means that for at least the last decade these countries have actively been attracting foreign investors, who are not only investing their money in these states, but also provide the necessary flow of innovation.