GLOBAL ASPECTS OF FOREIGN INVESTMENTS FLOW

Abstract

Foreign investment fund in the world has multiplied several times in the last two
decades. However, growing trend of foreign investments fl ow has been broken by the recent
fi nancial crisis in the world. Lower infl ow of foreign investments into the developing
countries has made the funding of their current accounts diffi cult, because it became
more diffi cult for them to get loans in the international capital market. Most net importers
of capital are net debtors in the international capital market, which made them increase
investment attractiveness for international investors. Thus they tried to decrease their
exposure to the loan market. Although foreign investments are desirable source of funding
the current account defi cit, net infl ow of these funds generates negative balance in the
income account and puts pressure on the balance of payments of the country. World investment
fl ows have returned to the upward trend in 2013.
This paper analyses foreign investments fl ow in the world, by groups of countries.
The groups of countries, the subject analysis of this paper, are: Asia, Latin America,
Africa, countries in transition and developed countries. The most signifi cant countries
that are net exporters of capital in the world are the European Union and USA, while the
biggest importers are the growing Asian countries. Starting period for this analysis is
1990, and ending period is 2013. Therefore, time series of the analysis covers economic
cycles, i.e. rise from the nineties of the last century, then the period of global fi nancial and
economical crisis that lasted all the ay until the end of 2012.