Simon J. Evenett and Johannes Fritz | 02 Jun 2021

Sharp reductions in FDI inflows have occurred since the onset of the pandemic. The reality is that FDI was in trouble long before. This comes at a time when governments and civil society are demanding that international business play a greater role in addressing pressing global challenges, such as advancing sustainable development and the transition to a low carbon economy. The 27th Global Trade Alert report shows that these demands are being made when financial returns on FDI in all but one emerging market region are barely above those earned in safer industrial country markets. Moreover, the report shows that since 2015 government policies have become less conducive to FDI, a finding not confined to any one group of host nations. The report contends that if multinational enterprises are to play a greater role then policy needs to be reset to restore the commercial viability of FDI. The report's findings have implications for national development policies, for deliberations on implementing the Sustainable Development Goals, for the financing of FDI, and for the negotiation on investment accords.