World Investment: Key Messages and

U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T
EMBARGO
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WORLD
INVESTMENT
REPORT
SPECIAL ECONOMIC ZONES
2019
KEY MESSAGES AND
OVERVIEW
U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T
WORLD
INVESTMENT
REPORT 2019
KEY MESSAGES AND

OVERVIEW
Geneva, 2019
© 2019, United Nations
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UNCTAD/WIR/2019 (Overview)
ii World Investment Report 2019 Special Economic Zones

PREFACE
The World Investment Report supports policymakers by monitoring
global and regional foreign direct investment trends and documenting
national and international investment policy developments. The policy
chapter of this year’s report takes stock of efforts being made towards
the reform of international investment agreements and surveys new
measures.
Inclusive sustainable development depends on a global policy

environment that is conducive to cross-border investment. Last
year, global flows of foreign direct investment fell by 13 per cent, to
$1.3 trillion. This represents the lowest level since the global financial
crisis and underlines the lack of growth in international investment this
decade. The significant acceleration required to meet the investment
needs associated with the Sustainable Development Goals is not yet
apparent. We need to raise ambition on climate action, address debt
vulnerabilities and reduce trade tensions to foster environments that are
conducive to scaling up long-term and sustainable investments.
Among the most important instruments for attracting investment are

Special Economic Zones. The number of zones around the world has
grown rapidly this decade to more than 5,000, with many more planned.
This World Investment Report provides an overview of the global
SEZ landscape and offers advice on how to respond to fundamental
challenges for zones posed by the sustainable development imperative,
the new industrial revolution and changing patterns of international
production.
I commend this year’s World Investment Report for both industrial and
investment policymakers, and as an important tool for the international
development community.
António Guterres
Secretary-General of the United Nations
Preface iii
FOREWORD
For some time now, the global policy climate for trade and investment has not
been as benign as it was in the heyday of export-led growth and development. Yet
the need to attract investment and promote exports to support industrialization,
economic diversification and structural transformation is as great as ever for
developing countries, especially the least developed countries.
The many new industrial policies that have been adopted in recent years – in
both developing and developed countries – almost all rely to a significant degree
on attracting investment. At the same time, we are observing a declining trend
in cross-border productive investment.
The market for internationally mobile investment in industrial capacity is thus

becoming increasingly difficult and competitive. The demand for investment is
as strong as ever, the supply is dwindling and the marketplace is less friendly
then before.
It is in this context that we are seeing explosive growth in the use of special
economic zones (SEZs) as key policy instruments for the attraction of investment
for industrial development. More than 1,000 have been developed worldwide in
the last five years, and by UNCTAD’s count at least 500 more are in the pipeline
for the coming years.
There are many examples of SEZs that have played a key role in structural
transformation, in promoting greater participation in global value chains and in
catalyzing industrial upgrading. But for every success story there are multiple
zones that did not attract the anticipated influx of investors, with some having
become costly failures.
In countries with an SEZ portfolio or with ambitious SEZ development

programmes, policymakers and practitioners – in ministries responsible
for industry, trade and investment; in SEZ authorities; and in export and
investment promotion agencies, to mention a few – are looking to turn around
underperforming zones and to ensure that new ones meet expectations.
iv World Investment Report 2019 Special Economic Zones

In doing so, they not only have to contend with the challenges associated with a
more difficult trade and investment climate. They face other challenges as well.
One is the new industrial revolution, which could erode the importance of low
labour costs, the traditional competitive edge of most SEZs. SEZs will need to
anticipate trends in their targeted industries and adapt.
But even more important is that, today, sustainable development – as embodied

in the United Nations Sustainable Development Goals – must guide SEZ
strategy and operations. In a break from the past, adopting the highest social,
environmental and governance standards for zones is becoming a competitive
advantage.
The World Investment Report 2019 surveys the universe of SEZs today,
provides an overview of SEZ laws and regulations, and assesses the sustainable
development impact of SEZs. The report offers recommendations through
three lenses: lessons learned from the past, a forward-looking perspective and
a pioneering idea in the form of “SDG model zones”.
I hope that the report will inspire and reinvigorate efforts around the world to
make investment work for development through SEZs. UNCTAD stands ready
to support stakeholders in this endeavour.
Mukhisa Kituyi
Secretary-General of UNCTAD
Foreword v
ACKNOWLEDGEMENTS
The World Investment Report 2019 was prepared by a team led by James
X. Zhan. The team members included Richard Bolwijn, Bruno Casella, Arslan
Chaudhary, Hamed El Kady, Kumi Endo, Thomas van Giffen, Kálmán Kalotay,
Joachim Karl, Isya Kresnadi, Oktawian Kuc, Jing Li, Anthony Miller, Kyoungho
Moon, Abraham Negash, Shin Ohinata, Diana Rosert, Astrit Sulstarova, Claudia
Trentini, Elisabeth Tuerk, Joerg Weber and Kee Hwee Wee.
Research support and inputs were provided by Jorun Baumgartner, Faicel Belaid,
Magdalena Bulit Goni, Juan Carlos Castillo, Tiffany Grabski, Yulia Levashova,
Luisa Sande Lemos, Sergey Ripinsky and Linli Yu. Interns Zahra Ejehi, Robert
Kuhn, Alina Nazarova and Mxolisi Artwell Ngulube also contributed.
Comments and contributions were provided by Stephania Bonilla, Joseph

Clements, Chantal Dupasquier, Ariel Ivanier, Mathabo Le Roux, Massimo
Meloni, Jason Munyan, Yongfu Ouyang, Ian Richards, Christoph Spennemann
and Paul Wessendorp.
Statistical assistance was provided by Bradley Boicourt, Mohamed Chiraz Baly,

Smita Lakhe and Lizanne Martinez.
The manuscript was edited with the assistance of Caroline Lambert and copy-
edited by Lise Lingo. Pablo Cortizo designed the charts, maps and infographics;
he and Laurence Duchemin typeset the report. Production of the report was
supported by Elisabeth Anodeau-Mareschal, Nathalie Eulaerts, Rosalina
Goyena, Sivanla Sikounnavong and Katia Vieu.
The report benefited from extensive advice from François Bost and Rajneesh
Narula on chapter IV. At various stages of preparation, including during the
expert meetings organized to discuss drafts, the team received comments and
inputs from these experts: Aradhna Aggarwal, Xiangming Chen, Teresa Cheng,
Manjiao Chi, Riccardo Crescenzi, Stefan Csordas, Thomas Farole, Masataka
Fujita, Yeseul Hyun, N. Jansen Calamita, Markus Krajewski, Alexey Kuznetsov,
Olga Kuznetsova, Guangwen Meng, Maria Camila Moreno, Shree Ravi, Emily
Sims, Ilan Strauss, Juan Torrents and Giovanni Valensisi.
vi World Investment Report 2019 Special Economic Zones

The report benefited also from collaboration with colleagues from the United
Nations Regional Commissions for its sections on regional trends in chapter II.
Inputs and comments were provided by Wafa Aidi, Joseph Baricako, Mohamed
Chemingui, Martin Kohout, Laura Páez Heredia, José Palacín, Maria Cecilia
Plottier, Marc Proksch, Giovanni Stumpo and Heather Taylor.
Also acknowledged are comments received from other UNCTAD divisions as

part of the internal peer review process, as well as comments from the Office
of the Secretary-General. The United Nations Cartographic Section provided
advice for the regional maps.
Numerous officials of central banks, national government agencies, international

organizations and non-governmental organizations also contributed to
the report.
Acknowledgements vii
TABLE OF CONTENTS
PREFACE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
FOREWORD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
ACKNOWLEDGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
KEY MESSAGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GLOBAL TRENDS AND PROSPECTS. . . . . . . . . . . . . . . . . . . . 1
REGIONAL TRENDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
INVESTMENT POLICY TRENDS . . . . . . . . . . . . . . . . . . . . . . . 15
SPECIAL ECONOMIC ZONES. . . . . . . . . . . . . . . . . . . . . . . . . 22
viii World Investment Report 2019 Special Economic Zones

KEY MESSAGES
chaper 1-2
INVESTMENT TRENDS
AND PROSPECTS
-13
Global FDI
Global foreign direct investment (FDI) flows % 2018
continued their slide in 2018, falling by 13 per cent
to $1.3 trillion. The decline – the third consecutive $1.3 trillion
year’s fall in FDI – was mainly due to large-scale
repatriations of accumulated foreign earnings by United States multinational
enterprises (MNEs) in the first two quarters of 2018,FDI
following
downwardtax trend
reforms
introduced by that country at the end of 2017.
Developed
FDI flows to developed economies reached the lowest point since$706 2004,
bn
Developing $557 bn
declining by 27 per cent. Inflows to Europe halved to less than $200 billion, due
$34 bn
to negative inflows in a few large host countries as a result of funds
2007–2018
repatriations
Transition
and to a sizeable drop in the United Kingdom. Inflows in the United chaper States 1-2 also
declined, by 9 per cent to $252 billion.
Greenfield investment
Flows to developing countries remained stable, rising by 2 per cent. As a result
in manufacturing
-13%up2018
Global
of the increase and the anomalous fall in FDI in developed countries, FDI
the share
of developing countries in global FDI increased to 54 per cent, a record.
35%
• FDI flows to Africa rose by 11 per cent to $46 billion, despite declines in many
$1.3 trillion
of the larger recipient countries. The increase was supported by continued
resource-seeking inflows, some diversified investments and a recovery in
South Africa after several years of low-level inflows.
• Flows to developing Asia, the largest recipient
region, were up 4 per cent. In a sign of Top
FDI 100 MNEs
downward trend
continued dynamism, greenfield project account for more than
1/3 R&D worldwide
announcements in the region doubled in Developed of business-funded
value, recovering from their 2017 pause. $706 bn
Developing $557 bn
• FDI in Latin America and the Caribbean was 6
per cent lower, failing to maintain momentum $34 bn
2007–2018 Transition
after the 2017 increase halted a long slide.
Greenfield investment
Key Messages ix
in manufacturing
chaper 3
FDI in the region is still 27 per cent lower than during the peak of the
commodities boom.
• FDI flows to structurally weak and vulnerable economies continued to
account for less than 3 per cent of the global total. Flows to the least
developed countries recovered from their 2017 fall, back to $24 billion, the
average for the decade.
FDI flows to economies in transition continued their downward trend in 2018,

declining by 28 per cent to $34 billion, driven by a 49 per cent drop in flows to
the Russian Federation.
The tax-driven fall in FDI was cushioned by increased transaction

chaperactivity
1-2 in the
second half of 2018. The value of cross-border merger and acquisitions (M&As)
rose by 18 per cent, fueled by United States MNEs using liquidity in their foreign
affiliates that was no longer encumbered by tax liabilities.
-13% 2018
Global FDI
In 2019, FDI is expected to see a rebound in developed economies as the effect
of the tax reforms winds down. Greenfield project announcements – indicating
$1.3 trillion
forward spending plans – also point at an increase, as they were up 41 per cent
in 2018 from their low 2017 levels. Despite this, projections for global FDI show
only a modest recovery of 10 per cent to about $1.5 trillion, below the average
over the past 10 years. The underlying FDI trend remains weak. Trade tensions
also pose a downward risk for 2019 and beyond.
FDI downward trend
The underlying FDI trend has shown anemic growth since 2008. FDI net of
one-off factors such as tax reforms, megadeals and volatile financial flows has
Developed
averaged only 1 per cent growth per year for a decade, compared with 8 per $706cent
bn
Developing $557 bn
in 2000–2007, and more than 20 per cent before 2000. Explanations include
declining rates of return on FDI, increasingly asset-light2007–2018
forms of Transition $34 bn
investment and
a less favourable investment policy climate.
The long-term slide of greenfield investment in

manufacturing halted in 2018, with the value of Greenfield investment
announced projects up 35 per cent from the
low value in 2017. Among developing countries
in manufacturing
– where manufacturing investment is key for
industrial development – the growth was mostly
concentrated in Asia and pushed up by high-
up 35%
value projects in natural resource processing
industries.
Top 100 MNEs

x World Investment Report 2019 Special Economic Zones
FDI downward trend
Developed
The number of State-owned MNEs (SO-MNEs)
stabilized, and their acquisitions abroad slowed Top 100 MNEs
Developing
$706 bn
$557 bn
down. There are close to 1,500 SO-MNEs, account for more than
Transition
$34 bn
1/3 R&D worldwide

2007–2018
similar to 2017. Their presence in the top 100 of business-funded

global MNEs increased by one to 16. The value
of their M&A activity shrank to 4 per cent of total Greenfield investment
in manufacturing
M&As in 2018, following a gradual decline from more than 10 per cent on
average in 2008–2013.
Much of the continued expansion of international production is driven by

intangibles. Non-equity modes of international production are growing faster
up 35%
chaper 3
than FDI, visible in the relative growth rates of royalties, licensing fees and
services trade. The top 100 MNE ranking for 2018 confirms that industrial
MNEs are sliding down the list, with some dropping out.
66Top
funded R&D worldwide. Technology, pharmaceutical and automotive%
100 MNEs
MNEs in the global top 100 account for more than one third of business-
34for more than

account MNEs are
%
Liberalization/promotion
1/3 R&D worldwide
the biggest spenders. The R&D intensity (relative to sales) of the developing-
of business-funded
Restriction/regulation
country top 100 is significantly lower. International greenfield investment in R&D
activities is sizeable and growing.
A significant part of investment between developing countries (South–South

FDI) is ultimately owned by developed-country MNEs. New data on the global
National
network of direct and indirect bilateral FDI relationships showsinvestment
the important
policy
role of regional investment hubs in intraregional FDI and measures FDI.
in South–South
Indirect investment also has implications for the coverage ofchaper international
3
investment agreements.
INVESTMENT POLICY DEVELOPMENTS + 40

New national investment policy measures show a 66 34 in 2018
more critical stance towards foreign investment. In Total IIAs in force %
%
2 658
2018, some 55 economies introduced at least 112

measures affecting foreign investment. More than one
third of these measures introduced new restrictions or
regulations – the highest number for two decades. They
mainly reflected national security concerns about foreign
71
ownership of critical infrastructure, core technologies National investment
and other sensitive business assets. Furthermore, at policy measures
new
ISDS cases Key Messages xi
up 35%
least 22 large M&A deals were withdrawn or blocked for regulatory or political
reasons – twice as many as in 2017.
Top 100 MNEs
Screening mechanisms for foreign investment are gaining importance. Since
account for more than
2011, at least 11 countries have introduced new screening frameworks and at
1/3 R&D worldwide

least 41 of
amendments have been made to existing regimes. Changes included
business-funded
adding sectors or activities subject to screening, lowering the triggering
thresholds or broadening the definition of foreign investment. Other new
regulations have expanded disclosure obligations of foreign investors, extended
statutory timelines of screening procedures or introduced new civil, criminal or
administrative penalties for not respecting notification obligations.
Nevertheless, attracting investment remains a priority. The majority of new

investment policy measures still moved in the direction of liberalization,
chaper 3
promotion and facilitation. Numerous countries removed or lowered entry
restrictions for foreign investors in a variety of industries. The trend towards
simplifying or streamlining administrative procedures for foreign investment
continued. Also, several countries provided new fiscal incentives for investment
66% 34%
in specific industries or regions.
International investment policymaking is in a dynamic phase, with far-reaching

implications. In 2018, countries signed 40 international investment agreements

(IIAs). For at least 24 existing treaties, terminations entered into effect. The
impact on the global IIA regime of novel features in new agreements, including
some megaregional treaties with key investor countries, will be significant.
Many countries are also developing new model treaties and guiding principles
to shape future treaty making.
National investment
IIA reform is progressing, but much remains to be done. Almost all new treaties
policy measures
contain numerous elements in line with UNCTAD’s Reform Package for the
International Investment Regime. UNCTAD’s policy tools have also spurred
initial action to modernize old-generation treaties.
40
Increasingly, countries interpret, amend, replace or
+ terminate outdated treaties. However, the stock of
old-generation treaties is 10 times larger than the
in 2018 number of modern, reform-oriented treaties. Investors
Total IIAs in force continue to resort to old-generation treaties; in 2018,
2 658 they brought at least 71 new investor–State dispute

settlement (ISDS) cases.
xii World Investment Report 2019 Special Economic Zones

66% 34%
71
IIA reform actions are also creating new challenges. New
new
treaties aim to improve balance and flexibility, but they
also make the IIA regime less homogenous. Different
National investment
approaches to ISDS reform, ranging from traditional ad
hoc tribunals to a standing court or to no ISDS, add to
ISDS cases
policy measures
broader systemic complexity. Moreover, reform efforts are occurring in parallel
and often in isolation. Effectively harnessing international investment relations
+
for the pursuit of sustainable development requires holistic and synchronized
reform through an inclusive and transparent process. UNCTAD caninplay 2018an
40
important facilitating role in this regard.
Total IIAs in force
Sustainable capital market trends 2 658

Capital market policies and instruments designed to promote the integration
of sustainability into business and investment practices are transitioning from
71
niche to mainstream. A growing number of investors are integrating ESG factors
into their investment decision making to enhance performance and mitigate risk.
new
5 400
The positive track record of sustainability-themed products is reinforcing the
ISDS cases
zones
views of asset managers and securities regulators that such factors are material
to long-term investment performance. As these sustainable investment trends
take root and expand, they can have a stronger influence on the operational
policies and practices of MNEs.
across
Special economic zones (SEZs) are widely used in most

developing and many developed economies. Within these
geographically delimited areas governments facilitate
147
economies
industrial activity through fiscal and regulatory incentives and
infrastructure support. There are nearly 5,400 zones across
5 400
147 economies today, up from about 4,000 five years ago, and
more than 500 new SEZs are in the pipeline. The SEZ boom zones
is part of a new wave of industrial policies and a response to
across
147
increasing competition for internationally mobile investment.
SEZs come in many types. Basic free zones focused on

facilitating trade logistics are most common in developed
countries. Developing economies tend to employ integrated
Bilateral
economies
partnerships
buildingKey Messages xiii
Bilateral zones aimed at industrial development, which can be multi-
partnerships industry, specialized or focused on developing innovation
building Bilateral
capabilities. The degree and type of specialization is closely
linked to countries’ level of industrialization, following an SEZ
Z NES in development ladder. partnerships
developing
countries building
Many new types of SEZs and innovative zone development
programmes are emerging. Some focus on new industries, such
as high-tech, financial services, or tourism – moving beyond the
Z NES in
trade- and labour-intensive manufacturing activities of traditional SEZs. Others
developing
focus on environmental performance, science commercialization, regional
development or urban regeneration.
countries
International cooperation on zone development is increasingly common. Many
zones in developing countries are being built through bilateral partnerships
or as part of development cooperation programmes. Regional development
zones and cross-border zones spanning two or three countries are becoming a
feature of regional economic cooperation.
SEZs can make important contributions to growth and development. They

can help attract investment, create jobs and boost exports – both directly and
SEZindirectly
Sustainablewhere they succeed in building linkages with the broader economy.
Development
Zones can also support global value chain (GVC) participation, industrial
Profitupgrading
and Loss and diversification. However, none of these benefits are automatic.
Statement
In fact, the performance of many zones remains below expectations. SEZs are
neither a precondition nor a guarantee for higher FDI inflows or GVC participation.
Where they lift economic growth, the stimulus tends to be temporary: after the
build-up period, most zones grow at the same rate as the national economy.
And too many zones operate as enclaves with limited impact beyond their
confines.
Only a few countries regularly assess the performance

and economic impact of zones. Doing so is critical,
SEZ Sustainable
because the turnaround of unsuccessful SEZs Development
requires timely diagnosis, especially when there Profit and Loss
has been a significant level of public investment in Statement
zone development. UNCTAD’s SEZ Sustainable
Development Profit and Loss Statement (P&L) can guide policymakers in the
design of a comprehensive monitoring and evaluation system.
New
xiv type of SEZ:
World Investment Report 2019 Special Economic Zones
SDG model zone

The decades-long experience with SEZs provides important lessons for modern
zone development:
• Strategic design of the SEZ policy framework and development programme
is crucial. Zone policies should not be formulated in isolation from their
broader policy context, including investment, trade and tax policies. The
types of zones and their specialization should build on existing competitive
advantages and capabilities. And long-term zone development plans should
be guided by the SEZ development ladder.
• Zone development programmes should take a frugal approach. The
Sustainable Development P&L emphasizes the need for financial and
fiscal sustainability of zones, as their broader economic growth impact
can be uncertain and take time to materialize. High upfront costs due to
overspecification, subsidies for zone occupants and transfers to zone
regimes of already-operating firms pose the greatest risks to fiscal viability.
• The success of individual SEZs depends on getting the basics right. Most
failures can be traced back to problems such as poor site locations that
require heavy capital expenditures or that are far away from infrastructure
hubs or cities with sufficient pools of labour; unreliable power supplies; poor
zone design with inadequate facilities or maintenance; or overly cumbersome
administrative procedures.
• Active support to promote clusters and linkages is key to maximizing
development impact. Firms operating in zones have greater scope to
collaborate, pool resources and share facilities – more so in specialized
zones, but multi-activity zones can extract some of the benefits of co-
location. Pro-active identification of opportunities, matching efforts and
training programmes, with firms within and outside the zone, significantly
boosts the impact.
• A solid regulatory framework, strong institutions and good governance
are critical success factors. The legal infrastructure of SEZs should ensure
consistent, transparent and predictable implementation of SEZ policies. The
responsibilities of SEZ governing bodies should be clearly defined. Zones
benefit from having public and private sector representatives on their boards.
Looking ahead, SEZs face new challenges:

• The sustainable development agenda increasingly drives MNEs’ strategic
decisions and operations, which should be reflected in the value proposition
Key Messages xv
that SEZs market to investors. Modern SEZs can make a positive contribution
to the ESG performance of countries’ industrial bases. Controls, enforcement
and services (e.g. inspectors, health services, waste management and
renewable energy installations) can be provided more easily and cheaply in
the confined areas of SEZs.
SEZs are traditionally big employers of women, with about 60 per cent
female employees on average. Some modern zones are implementing
gender equality regulations, such as anti-discrimination rules, and support
SEZ Sustainable
services, such as child care and schooling facilities, setting new standards
for SDG performance. Development
Profit and Loss
• The new industrial revolution and the digital economy are changing
Statement
manufacturing industries – the main clients of SEZs. SEZs will need to adapt
their value propositions to include access to skilled resources, high levels of
data connectivity and relevant technology service providers. SEZs may also
have new opportunities to target digital firms.
• The current challenging global policy environment for trade and investment,
with rising protectionism, shifting trade preferences and a prevalence
of regional economic cooperation, is causing changes in patterns of
international production and GVCs. These changes can significantly
affect the competitiveness of SEZs, which function as central nodes in
GVCs. International cooperation on zone development is likely to become
increasingly important.
Finally, the 2030 Agenda to achieve the Sustainable Development Goals (SDGs)
provides an opportunity for the development of an entirely new type of SEZ:
the SDG model zone. Such zones would aim to attract investment in SDG-
relevant activities, adopt the highest levels of ESG standards and compliance,
and promote inclusive growth through linkages and spillovers.
The recommendations in this report aim to

provide guidance for policymakers in their efforts
to revitalize and upgrade existing zones, and to
build new ones that avoid the pitfalls of the past
and are prepared for the challenges ahead. The
key objective should be to make SEZs work for
New type of SEZ:
the SDGs: from privileged enclaves to sources SDG model zone
of widespread benefits.
xvi World Investment Report 2019 Special Economic Zones

OVERVIEW
Global trends and prospects
Global FDI fell for the third year in a row

Global foreign direct investment (FDI) flows continued their slide in 2018, falling
by 13 per cent to $1.3 trillion (figure 1). The decline – the third consecutive
year’s fall in FDI – was mainly due to large-scale repatriations of accumulated
foreign earnings by United States multinational enterprises (MNEs) in the first
two quarters of 2018, following tax reforms introduced in that country at the
end of 2017.
The tax-driven fall in the first half of 2018 (which ended 40 per cent lower
than the same period in 2017) was cushioned in the second half by increased
FDI inflows, global and by economic group, 2007–2018

Figure 1.
(Billions of dollars and per cent) 34
-28%
World total Developing economies

Developed economies Transition economies
2 500 54% 706
+2%
$1297 557
-27%
-13%
2 000
1 500
1 000
500
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: UNCTAD.
Overview 1
transaction activity. The value of cross-border merger and acquisitions (M&As)
rose by 18 per cent, fueled by United States MNEs using liquidity in foreign
affiliates that was no longer encumbered by tax liabilities.
FDI to developed countries dropped

to the lowest level in 15 years
FDI flows to developed economies reached their lowest point since 2004,
declining by 27 per cent. Inflows to Europe halved to less than $200 billion;
a few important host countries of United States MNEs registered negative
inflows. (The repatriation of funds by United States MNEs translated into
negative inflows in host countries.) FDI flows to Ireland and Switzerland fell
to -$66 billion and -$87 billion, respectively. FDI flows to the United Kingdom
also declined, by 36 per cent to $64 billion, as new equity investments halved.
FDI into the United States declined as well, by 9 per cent to $252 billion – the
average of the last 10 years. That decline was mainly due to a fall by one third
in cross-border M&A sales. Australia’s FDI inflows reached $60 billion – a
record level – as foreign affiliates reinvested a record $25 billion of their profits
in the country.
FDI flows to developing economies remained stable, rising by 2 per cent to
$706 billion. As a result of the increase and the anomalous fall in developed
countries, the share of developing economies in global FDI increased to 54 per
cent, a record. Their presence among the top 20 host economies remained
unchanged (figure 2). The United States remained the largest recipient of FDI,
followed by China, Hong Kong (China) and Singapore.
The large-scale repatriations of funds by United States MNEs translated into
negative FDI outflows, causing the United States to disappear from the list of
the top 20 outward-investing economies in 2018 (figure 3). Overall, outward
FDI from developed countries as a group fell by 40 per cent to $558 billion. As
a result, their share in global outward FDI dropped to 55 per cent – the lowest
ever recorded. Nevertheless, outward investment by European MNEs rose
11 per cent to $418 billion. France became the third largest investor home
country, with FDI outflows of more than $100 billion in 2018.
Outward investment by MNEs from developing economies declined by 10 per
cent to $417 billion. Outflows from developing Asia fell by 3 per cent to $401
billion; investment by Chinese MNEs declined for the second consecutive
year. Outflows from Latin America and the Caribbean contracted sharply.
2 World Investment Report 2019 Special Economic Zones

Figure 2. FDI inflows, top 20 host economies, 2017 and 2018
(Billions of dollars)
(x) = 2017 ranking
252
United States (1) 277
139
China (2) 134
116
Hong Kong, China (3) 111
78
Singapore (5) 76
70
Netherlands (7) 58
64
United Kingdom (4) 101
61
Brazil (6) 68
60
Australia (8) 42
44
Spain (17) 21
42
India (9) 40
40
Canada (15) 25
37
France (13) 30
32
Mexico (12) 32
26
Germany (11) 37
24
Italy (16) 22
22
Indonesia (18) 21
22
Israel (19) 18
16
Viet Nam (21) 14 Developed economies
14 2018 2017
Korea, Republic of (20) 18
13 Developing and transition economies
Russian Federation (14) 26 2018 2017
Source: UNCTAD.
Overview 3
Figure 3. FDI outflows, top 20 home economies, 2017 and 2018
(Billions of dollars)
(x) = 2017 ranking
143
Japan (2) 160
130
China (3) 158
102
France (9) 41
85
Hong Kong, China (6) 87
77
Germany (5) 92
59
Netherlands (14) 28
50
Canada (7) 80
50
United Kingdom (4) 118
39
Korea, Republic of (13) 34
37
Singapore (8) 44
36
Russian Federation (12) 34
32
Spain (10) 40
27
Switzerland (156) -35
21
Saudi Arabia (28) 7
21
Italy (15) 26
20
Sweden (17) 23
18
Taiwan Province of China (21) 12
18
Thailand (18) 17 Developed economies
15 2018 2017
United Arab Emirates (20) 14
13
Developing and transition economies
Ireland (157) -39 2018 2017
Source: UNCTAD.

Prospects: a rebound is likely, but the
underlying trend remains weak
In 2019, FDI is expected to see a rebound in developed economies as
the effect of the United States tax reform winds down. Greenfield project
announcements – indicating forward spending plans – also point at an
increase, as they were up 41 per cent in 2018 from their low 2017 levels.
Despite these positive indicators, projections for global FDI show only a
modest recovery of 10 per cent to about $1.5 trillion, below the average over
the past 10 years. Growth potential is limited because the underlying FDI
trend remains weak. Trade tensions also pose a downward risk for 2019 and
beyond.
The underlying FDI trend has shown anemic growth since 2008. Net of
fluctuations caused by one-off factors such as tax reforms, megadeals and
volatile financial flows, it has averaged only 1 per cent growth per year this
decade, compared with 8 per cent in 2000–2007, and more than 20 per cent
before 2000 (figure 4).
Key drivers for the long-term slowdown in FDI include declining rates of return
on FDI, increasingly asset-light forms of investment and a less favourable
investment policy climate.
Figure 4. FDI inflows and the underlying trend, 1990–2018

(Indexed, 2010 = 100)
FDI underlying trend,

average annual growth rate 1990s: 21% 2000–2007: 8% Post-crisis: 1%
150
FDI
100
FDI underlying trend

50
0
1990 2000 2008 2018
Source: UNCTAD.
Overview 5
Greenfield recovered, but unevenly
The value of announced greenfield investment projects recovered from its
slump in 2017, with a 41 per cent increase to $961 billion. The bulk of the
increase came from a doubling of announced projects in Asia.
The long-term slide of greenfield investment in manufacturing – critical for
industrial development in developing countries – halted in 2018. In developing
economies, the value of announced projects in manufacturing rose by 68 per
cent to $271 billion. Most of the increase took place in Asia, but announced
projects also increased markedly in Africa (up 60 per cent); they slumped in
Latin America and the Caribbean.
Much of the increase in manufacturing was due to large-scale projects, mostly
in natural resource-related processing industries. The number of projects in
developing countries rose by a more modest 12 per cent. The growth in the
number of projects in typical early-industrialization industries – the type often
attracted by SEZs – remained lacklustre.
State-owned MNEs have slowed their international expansion

The number of State-owned (SO) MNEs has stabilized. There are close to
1,500 SO-MNEs, similar to the number in 2017. European SO-MNEs account
for a little more than one third of all SO-MNEs, and another 45 per cent are
from developing Asian economies, including 18 per cent from China. The
presence of SO-MNEs in the top 100 global MNEs increased from 15 to 16.
The list includes five SO-MNEs from China and 11 from developed countries.
M&A activity by SO-MNEs has slowed down markedly. SO-MNEs accounted
for about 4 per cent of the value of global M&As in 2018, following a gradual
decline from more than 10 per cent on average in 2008–2013. The industries
most targeted by SO-MNEs are utilities, extractive industries and financial
services.
International expansion is asset-light

Much of the continued expansion of international production is driven
by intangibles and by non-equity modes of overseas operations, such as
licensing and contract manufacturing. The trend is visible in the divergence
of key international production indicators – on a scale from tangible to

intangible – with a substantially flat trend for FDI and trade in goods and
much faster growth for both trade in services and international payments for
intangibles (royalties and licensing fees).
The 2018 ranking of the top 100 MNEs confirms this picture. The growth of
foreign sales of the top 100 MNEs outpaces that of foreign assets and foreign
employees, suggesting that MNEs can reach overseas markets with a lighter
operational footprint. Also, the typically more asset-heavy industrial MNEs in
the top 100 are sliding down the ranking, with some dropping out.
MNEs are big R&D spenders

In 2018, MNEs in UNCTAD’s top 100 invested more than $350 billion in
R&D, representing over one third of all business-funded R&D. Technology,
pharmaceutical and automotive MNEs are the biggest spenders. The R&D
intensity (relative to sales) of the developing-country top 100 MNEs is
significantly lower.
International greenfield investment in R&D activities is sizeable and growing.
During the last five years, MNEs announced 5,300 R&D projects outside
their home markets, representing more than 6 per cent of all announced
greenfield investment projects, and up from 4,000 in the preceding five years.
Developing and transition economies capture 45 per cent of these projects.
The majority of R&D-related FDI projects is in relatively lower value added
design, development and testing activities, rather than basic research.
South–South FDI is smaller than it looks

WIR19 presents new, innovative data on the ultimate ownership of FDI and
on the global network of direct and indirect FDI relationships. The new data
reveal that a significant part of FDI between developing countries (South–
South FDI) is ultimately owned by developed-country MNEs. The share of
South–South investment in total investment to developing economies drops
from 47 per cent (when measured on the basis of standard FDI data) to
28 per cent when measured on the basis of ultimate ownership. Regional
investment hubs play an important role as conduits in indirect investment
flows, and they drive much of intraregional FDI and South–South FDI.
The new data also provide a different perspective on the coverage of IIAs. The
ultimate ownership view highlights the multilateralizing effect of indirect FDI.
Overview 7
For some treaties and economic groupings, such as the African Continental
Free Trade Area (AfCTA) and the Association of Southeast Asian Nations
(ASEAN), where regional hubs have a significant role, the share of direct
investment covered by the agreements is higher than the share of investment
by ultimate owner.

Regional trends
FDI in Africa on the rise

FDI flows to Africa defied the global downward trend in 2018. They rose to
$46 billion, an 11 per cent increase after successive declines in 2016 and
2017. Rising prices of and demand for some commodities led to sustained
resource-seeking investment. A few economies, such as Kenya, Morocco and
Tunisia, saw an encouraging increase in diversified investment. FDI in South
Africa made a significant recovery after several years of low-level inflows. In
contrast, investment in some of the other large recipients, including Nigeria,
Egypt and Ethiopia, declined in 2018.
FDI inflows to North Africa increased by 7 per cent to $14 billion. Egypt
remained the largest FDI recipient in Africa in 2018, although inflows
decreased by 8 per cent to $6.8 billion. Stable economic growth in Morocco
drew investment in several sectors, including automotive and finance; FDI to
the country increased to $3.6 billion. FDI to West Africa fell 15 per cent to $9.6
billion, the lowest level since 2006, owing to the substantial drop in Nigeria for
the second consecutive year. FDI flows to East Africa were largely unchanged
at $9 billion, despite Ethiopia recording an 18 per cent decline to $3.3 billion.
Inflows to Kenya increased by 27 per cent to $1.6 billion, including some
investments in sizeable infrastructure projects. Business facilitation measures
and investment-ready SEZs contributed to the trend. FDI flows to Central
Africa were stagnant at $8.8 billion. The Congo recorded inflows of $4.3,
mostly in oil exploration and production. Continued investment in minerals,
especially cobalt, underpinned flows to the Democratic Republic of Congo,
up 11 per cent to $1.5 billion. Inflows to Southern Africa turned around sharply
($-0.9 billion to $4.2 billion), mainly due to the recovery in South Africa, where
investment increased from $2 billion to $5.3 billion, including substantial
investments in automotive and renewable energy. Mozambique also received
higher inflows, with an 18 per cent increase pushing FDI to $2.7 billion.
However, this was largely due to intracompany transfers from companies
already established in the country, mainly for oil and gas exploration.
The expected acceleration of economic growth in Africa, progress towards
the implementation of the AfCFTA and the possibility of some large greenfield
investment projects announced in 2018 materializing could drive higher FDI
flows to the continent in 2019.
Overview 9
FDI flows to developing Asia increased marginally
FDI inflows to developing Asia rose by 4 per cent to $512 billion in 2018.
Growth occurred mainly in China, Hong Kong (China), Singapore, Indonesia
and other ASEAN countries, as well as in India and Turkey. Asia continued to
be the world’s largest FDI recipient region, absorbing 39 per cent of global
inflows in 2018, up from 33 per cent in 2017.
Flows to East Asia rose by 4 per cent to $280 billion in 2018 but remained
significantly below their 2015 peak of $318 billion. Inflows to China increased
by 4 per cent to an all-time high of $139 billion. Flows to South-East Asia
were up 3 per cent to a record level of $149 billion. Robust investment from
other Asian economies, including investment diversion and relocations of
manufacturing activity from China, supported FDI growth in the region. Strong
intra-ASEAN investments also contributed to the trend, although Singapore
played a significant role in this as a regional investment hub.
FDI inflows to South Asia increased by 4 per cent to $54 billion, with a 6
per cent rise in investment in India to $42 billion, driven by an increase in
M&As in services, including retail, e-commerce and telecommunication. West
Asia saw a 3 per cent rise in investment to $29 billion, halting an almost
continuous 10-year downward trend. The largest increases were recorded in
Turkey and Saudi Arabia.
Outflows from Asia declined by 3 per cent to $401 billion, representing 40
per cent of global outward FDI. This was mainly due to reduced investments
from China for the second consecutive year, caused by policies discouraging
capital outflows, as well as by increased screening of inward investments
in Europe and the United States. In contrast, outward investment from the
Republic of Korea, Saudi Arabia, the United Arab Emirates and Thailand
increased.
The prospects for FDI flows to the region are cautiously optimistic, due to a
favourable economic outlook and ongoing efforts to improve the investment
climate in several major economies. Announced greenfield investment projects
doubled in value in 2018 across Asia, suggesting continued growth potential
for FDI. Global trade tensions could negatively affect investor sentiment but
could also lead to further investment diversion.

FDI in Latin America and the Caribbean declined
FDI flows to Latin America and the Caribbean decreased by 6 per cent
in 2018 to $147 billion, as the recovery that started in 2017 stalled and
external factors weighed down growth prospects. Outward investment by
Latin American MNEs plunged in 2018 to a record low of $6.5 billion, due to
negative outflows from Brazil and lower investments from Chile.
In South America, FDI declined by an estimated 6 per cent due to lower
flows to Brazil and Colombia. In Brazil, flows fell by 9 per cent to $61 billion,
as a result of a challenging economic situation and a sharp decline in M&A
deals from record levels in 2017. In Colombia, FDI inflows fell by 20 per cent
to $11 billion. Flows to Argentina were resilient at $12 billion, buoyed by
flows into shale gas production. Flows into Chile rose marginally – by 4 per
cent to $7.2 billion – sustained by higher copper prices and record levels
of M&As in the mining, health services and electricity industries. In Peru,
flows decreased by 9 per cent to $6.2 billion, despite solid economic growth
and heavy investment in the mining industry. In Central America FDI inflows
were largely stable at $43 billion. In Mexico increasing reinvested earnings
by existing foreign affiliates led to unchanged inflows at $32 billion. Flows to
Panama were up 21 per cent to $5.5 billion, boosted by record M&A deals
and mining projects. In Costa Rica, a sudden pause in investment in tourism
was responsible for most of the decline in FDI inflows to $2.1 billion. In the
Caribbean, excluding offshore financial centres, flows declined by 32 per
cent. The contraction was due to lower FDI ($2.5 billion) in the Dominican
Republic, the largest recipient in the subregion, despite its strong economic
growth in 2018. Flows to Haiti and Jamaica also fell, to $105 million and $775
million, respectively.
Investment flows to and from the region could plateau as commodity prices
and economic conditions in major economies stabilize. Natural resources,
infrastructure and consumer goods (especially goods and services related
to information and communication technology) should continue to attract
foreign investors. Yet the region’s lower growth projections compared with
last year’s forecasts and its vulnerability to external factors, such as monetary
policy in the United States and trade tensions among key trading partners,
put a downward risk on prospective FDI inflows.
Overview 11
FDI flows to transition economies continue to slide
FDI flows to the transition economies of South-East Europe and the
Commonwealth of Independent States (CIS) declined in 2018 for the second
consecutive year. Investment to the region dropped by 28 per cent to $34
billion. The contraction was driven by the halving of flows to the Russian
Federation, by far the biggest economy and largest recipient in the group,
from $26 billion to $13 billion, in part due to international political factors and
domestic policies aimed at reducing investment round-tripping. Some of the
other larger recipients in the region – Azerbaijan, Kazakhstan and Ukraine
– also saw declining inflows. In contrast, flows were buoyant in South-East
Europe, especially in Serbia and North Macedonia. Serbia became the
second largest FDI recipient among transition economies as inflows grew by
44 per cent to $4.1 billion, driven by a surge in new equity capital.
Outflows from transition economies remained unchanged at $38 billion,
making the region a net FDI capital exporter in 2018. The Russian Federation
accounted for 95 per cent, with outflows of $36 billion – almost three times
more than inflows. The rise was driven mainly by reinvested earnings in and
loans to established affiliates. Equity investment in new greenfield ventures
and foreign acquisitions declined by almost half, reflecting caution about
overseas expansion.
FDI inflows in the transition economies are expected to stabilize in 2019.
Growth prospects for inflows into South-East Europe, where greenfield
project announcements doubled in 2018, are more positive.
FDI to developed economies falls sharply

FDI flows to developed economies fell by 27 per cent to $557 billion,
marking the third successive year of decline. Whereas the decline in 2017
was primarily due to subdued M&A activity, the main factor in 2018 was
the repatriation of accumulated earnings by United States MNEs following
tax reforms. Outflows from developed economies declined by 40 per cent
to $558 billion. Outflows from European economies increased, but outflows
from the United States fell to a net divestment of -$64 billion (representing a
decline of $364 billion from 2017).
Inflows to Europe halved to $172 billion, the lowest level since 1997. FDI
in important host economies for United States MNEs, such as Ireland and
Switzerland, was negative (with repatriations of funds to the United States

representing negative inflows for host countries). In the United Kingdom,
which also hosts a large number of United States MNEs, inflows contracted
by more than a third. However, announced greenfield investment projects
continued on an upward trend. The Netherlands became the largest recipient
of FDI in Europe, followed by the United Kingdom and Spain.
In the United States, inflows declined by 9 per cent to $252 billion, as a
result of negative intracompany loans. However, reflecting steady economic
growth, income on inward FDI increased to $200 billion, of which $119 billion
(up 28 per cent from 2017) was retained as reinvested earnings.
Outflows from European economies increased by 11 per cent to $418 billon.
Outward investment by French MNEs more than doubled to $102 billion,
making them the largest source of FDI flows from Europe.
In 2018, announced greenfield investment projects in developed economies
increased by 17 per cent, suggesting potential for a recovery of FDI. FDI
in developed economies, especially Europe, is likely to rebound from the
anomalously low levels in 2018.
FDI flows to the structurally weak economies remain fragile

FDI inflows to the 47 least developed countries (LDCs) as a group increased
by 15 per cent to $24 billion, representing 1.8 per cent of global FDI. Although
FDI in African LDCs recovered from a historical low in 2017 to $12 billion
(up 27 per cent) in 2018, it stayed more than 40 per cent below the annual
average of 2012–2016. In contrast, led by Bangladesh (up 68 per cent to
$3.6 billion), Asian and Oceanian LDCs recorded a new high in FDI flows (up
8 per cent to $12 billion).
Trends in announced greenfield FDI projects suggest that the more sizeable
investments will continue to target natural resources in Africa and power
generation projects in Asia. Many of the larger investment recipients in both
Africa and Asia expect FDI to pick up in the coming years with investments
in natural resources and SEZs. The high share in LDCs of investors from
developing economies compared with MNEs from developed economies is
likely to continue.
After a temporary recovery in 2017, FDI flows to the 32 landlocked developing
countries (LLDCs) declined again in 2018, by 2 per cent to $23 billion – or 1.7
per cent of global FDI inflows. In transition-economy and most Asian LLDCs,
Overview 13
the decline in FDI was modest, while Latin American LLDCs experienced a
more pronounced downturn. Flows to LLDCs remained concentrated in a
few economies, with the top five recipients (Kazakhstan, Ethiopia, Mongolia,
Turkmenistan and Azerbaijan) accounting for 56 per cent of total FDI to the
group. Chinese MNEs are increasingly active sources of investment and are
present in practically all LLDCs. Prospects for FDI vary according to LLDCs’
level of development and industrialization, with the fastest growth expected
in those with more potential for economic diversification.
FDI flows to the 28 small island developing States (SIDS) slipped for a second
year to $3.7 billion, with an 11 per cent contraction in the Caribbean SIDS.
FDI in Asian and Oceanian SIDS stagnated at $1 billion. FDI flows to African
SIDS fell by 22 per cent to $0.6 billion.
FDI flows into SIDS will remain fragile and dependent on few capital-intensive
projects. The trends in announced greenfield projects suggest further
concentration of FDI in a narrow range of industries in the services sector (e.g.
business activities, hotels and restaurants). Several SIDS in Africa and in the
Caribbean can expect sizeable investments in new tourism projects. In some
SIDS, ongoing SEZ development could create new investment opportunities.

Investment policy trends
Foreign investment restrictions and

regulations are on the rise
In 2018, some 55 countries and economies introduced at least 112 policy
measures affecting foreign investment. Two thirds of these measures sought
to liberalize, promote and facilitate new investment. Thirty-four percent
introduced new restrictions or regulations for FDI – the highest share since
2003 (figure 5).
Liberalization measures affected several industries, including agriculture,
media, mining, energy, retail trade, finance, logistics, transportation,
telecommunication and the internet business. Developing countries in Asia
accounted for approximately 60 percent of such measures. Some countries
advanced the privatization of state-owned companies. Furthermore, the
trend towards simplifying or streamlining administrative procedures for
foreign investors continued, for example through the abolition of approval
requirements or the establishment of online application portals. Also,
numerous countries provided new fiscal incentives for investment in specific
industries or regions.
Figure 5. Changes in national investment policies, 2003−2018 (Per cent)
Liberalization/promotion Restriction/regulation
100
75
66
50
34
25
0
2004 2006 2008 2010 2012 2014 2016 2018
Source: UNCTAD, Investment Policy Hub.
Overview 15
Among the new restrictions and regulations, developed countries adopted
a number of measures to address national security concerns. In developing
countries, measures included new foreign ownership ceilings in certain
industries or restrictions on the acquisition of residential property. New local
content requirements and obligations to employ local workers were also
introduced, including as part of public procurement rules.
Numerous cross-border M&A deals (exceeding $50 million) fell through in
2018 because of government interventions. At least 22 deals were blocked
or withdrawn for regulatory or political reasons – twice as many as in 2017.
Nine were halted for national security considerations, three were withdrawn
due to concerns from competition authorities and three more were aborted
for other regulatory reasons. Another seven deals were abandoned due to
approval delays from host-country authorities.
Countries are reinforcing regulatory frameworks

to screen foreign investment
FDI screening has become more prevalent over recent years. At least 24
countries – collectively accounting for 56 per cent of global FDI stock – have
a specific foreign investment screening mechanism in place. Tighter control
over foreign acquisitions due to security and public interest concerns is also
being addressed at regional levels.
The use of national security arguments in investment policy originated as
an instrument to control foreign participation in the defence industry. It has
since gradually broadened to protect other strategic industries and critical
infrastructure and is now also used to safeguard domestic core technologies
and know-how considered essential for national competitiveness in the era of
the new industrial revolution.
From 2011 to March 2019 at least 41 significant amendments were made to FDI
screening frameworks and at least 11 countries introduced new frameworks.
Most of the amendments expanded the scope of screening rules by adding
new sectors or activities, lowering triggering thresholds or broadening the
definition of foreign investment. Other new regulations broadened disclosure
obligations, extended the statutory timelines of screening procedures, or
introduced penalties for not respecting notification obligations (figure 6).

New restrictive FDI screening policies by category,
Figure 6.
2011–March 2019 (Per cent)
Others
Penalties 11
7
Screening
timeline 14 Screening
expansion 54 scope
extension
14
Disclosure
obligation
extension
Source: UNCTAD.
International investment policymaking

remains highly dynamic
In 2018, 40 new IIAs were signed. The new treaties included 30 bilateral
investment treaties (BITs) and 10 treaties with investment provisions (TIPs).
The country most active in concluding IIAs was Turkey with eight BITs,
followed by the United Arab Emirates with six BITs and Singapore with five
treaties (two BITs and three TIPs).
Some of the new treaties are megaregional, with novel features and involving
key investor countries. The new treaties brought the number of IIAs to 3,317
(2,932 BITs and 385 TIPs). By the end of the year, at least 2,658 IIAs were in
force (figure 7).
At the same time, the number of IIA terminations continued to rise. In 2018, at
least 24 terminations entered into effect (“effective terminations”), 20 of which
were unilateral and 4 of which were due to replacements (through the entry
into force of a newer treaty). This included 12 BITs terminated by Ecuador and
five by India. By the end of the year, the total number of effective terminations
reached 309 (61 per cent having occurred since 2010).
Many countries are developing new model treaties and guiding principles to
shape future treaty making. This will have a significant impact on the global
Overview 17
Figure 7. Number of IIAs signed, 1980−2018
Annual BITs TIPs

number of IIAs
250
Number of
IIAs in force
200
2658
150
100
50
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source: UNCTAD, IIA Navigator.
IIA regime. Many of these developments have benefited from UNCTAD’s work
on IIA-related technical assistance and capacity building.
The surge in ISDS cases continues

In 2018, investors initiated 71 publicly known ISDS cases pursuant to IIAs
(figure 8), nearly as many as in each of the previous three years. As of 1
January 2019, the total number of publicly known ISDS claims had reached
942. Almost all known ISDS cases have thus far been based on old-generation
investment treaties. To date, 117 countries have been respondents to one or
more ISDS claims. As some arbitrations can be kept confidential, the actual
number of disputes filed in 2018 and previous years is likely to be higher.
Over two thirds of the publicly available arbitral decisions rendered in 2018
were decided in favour of the investor, either on jurisdictional grounds or on
merits. By the end of the year, 602 ISDS proceedings had been concluded.

Figure 8. Trends in known treaty-based ISDS cases, 1987−2018
Annual
number of cases ICSID Non-ICSID
90
80
Cumulative number
of known ISDS cases
942
70
60
50
40
30
20
10
0
1987 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source: UNCTAD, ISDS Navigator.
Forward-looking IIA reform is well under way

All treaties concluded in 2018 contain several reforms that are in line with
UNCTAD’s Reform Package for the International Investment Regime. Twenty-
seven of the 29 IIAs concluded in 2018 for which texts are available contain
at least six reform features. Provisions that were considered innovative in pre-
2012 IIAs now appear regularly. Modern treaties often include a sustainable
development orientation, preservation of regulatory space, and improvements
to or omissions of investment dispute settlement. The most frequent area of
reform is the preservation of regulatory space. Some recent IIAs or treaty
models also contain explicit references to gender equality.
Investor–State arbitration is also a central focus of IIA reform. It continues
to be controversial, spurring debate in the investment and development
community and the public at large. About 75 per cent of IIAs concluded in
2018 contain at least one ISDS reform element, and many contain several.
Overview 19
Most of these reform elements are in line with the options identified by
UNCTAD in the Investment Policy Framework for Sustainable Development.
Five principal approaches emerge from IIAs signed in 2018 (used alone or
in combination): (I) no ISDS (four IIAs entirely omit ISDS), (ii) a standing ISDS
tribunal (one IIA), (iii) limited ISDS (19 IIAs), (iv) improved ISDS procedures (15
IIAs), and (v) an unreformed ISDS mechanism (six IIAs). Some of the reform
approaches have more far-reaching implications than others.
ISDS reform is being pursued across various regions and by countries at
different levels of development. In parallel, multilateral engagement on ISDS
reform is gaining prominence, involving a number of institutions such as
UNCITRAL and ICSID.
But comprehensive reform is only just beginning

IIA reform is progressing, but much remains to be done. UNCTAD’s policy tools
have spurred initial action to modernize old-generation treaties. Increasingly,
countries interpret, amend, replace or terminate outdated treaties. However,
the stock of old-generation treaties is 10 times larger than the number of
modern, reform-oriented treaties. The great majority of known ISDS cases
have thus far been based on old-generation treaties.
IIA reform actions are also creating new challenges. New treaties aim to
improve balance and flexibility, but they also make the IIA regime less
homogenous. Moreover, innovative clauses in new treaties have not yet
been tested in arbitral proceedings. Different approaches to ISDS reform,
ranging from traditional ad hoc tribunals to a standing court or to no ISDS,
add to broader systemic complexity. Moreover, reform efforts are occurring in
parallel and often in isolation.
Effectively harnessing international investment relations for the pursuit of
sustainable development requires holistic and synchronized reform through
an inclusive and transparent process. UNCTAD can play an important
facilitating role in this regard.

Financial markets increasingly integrate ESG factors
Capital markets play an important role in the global investment chain. Portfolio
investment is the third largest form of external finance for developing countries,
and capital market practices can shape the sustainable development
practices of MNEs engaged in FDI worldwide. Key actors influencing capital
markets include security market regulators, stock exchanges, issuers (listed
companies), asset owners and asset managers (investors). Stock exchanges
sit at the centre of this web of actors and the sustainability practices of stock
exchanges can be a useful benchmark to monitor trends in sustainable
finance.
Recent years have shown a sharp uptake in sustainability activities among the
world’s stock exchanges. This upward trend is expected to continue. Public
policies to promote sustainable development are being strengthened in a
number of jurisdictions. Also, the exchange industry and market regulators
increasingly recognize the important role that environmental, social and
governance (ESG) factors can play in promoting investment in sustainable
development and emerging markets.
As ESG inclusion transitions from a niche to a mainstream practice,
key challenges will need to be addressed, including fully integrating
sustainability throughout the investment chain, connecting upstream asset
managers to downstream investment projects and expanding ESG themed
financial products.
Overview 21
SEZs are spreading rapidly around the world

Special economic zones (SEZs) are widely used in most developing and many
developed economies. In these geographically delimited areas, governments
facilitate industrial activity through fiscal and regulatory incentives and
infrastructure support. There are some 5,400 zones across 147 economies
today, up from about 4,000 five years ago, and more than 500 new SEZs are
in the pipeline (figure 9). The SEZ boom is part of a new wave of industrial
policies and a response to increasing competition for internationally mobile
investment.
Most zones offer fiscal incentives, relief from customs duties and tariffs;
business-friendly regulations with respect to land access, permits and
licenses or employment rules; and administrative streamlining and facilitation.
Figure 9. Historical trend in SEZs (Numbers of countries and SEZs)

Number of economies with SEZs, selected years Number of SEZs
300 6 000
~5 400
250 5 000
4300
200 4 000
3500
150 3000 3 000

147
135
130
116
100 2 000
93
73
50 1 000
47 845
29 500
79 176
0 0
1975 1986 1995 1997 2002 2006 2008 2014 2018
Source: UNCTAD.

Infrastructure support is another important feature, especially in developing
countries where basic infrastructure for business outside these zones can
be poor.
Zone types vary following an SEZ development ladder

There are many types of SEZs. Basic free zones focused on facilitating trade
logistics are most common in developed countries. Developing economies
tend to employ integrated zones aimed at industrial development, which can
be multi-industry, specialized or focused on developing innovation capabilities.
The degree and type of specialization is closely linked to countries’ level of
industrialization, following an SEZ development ladder (table 1).
Many new types of SEZs and innovative zone development programmes are
emerging. Some focus on new industries, such as high-tech, financial services,
or tourism – moving beyond the trade- and labour-intensive manufacturing
activities of traditional SEZs. Others focus on environmental performance,
science commercialization, regional development or urban regeneration.
Despite the emergence of new forms of zones linked to natural resources,
aimed at domestic markets or intended as incubators for start-ups and
small and medium-sized enterprises, most SEZs remain essentially a part of
countries’ competitive investment promotion package, together with other
forms of incentives.
International cooperation on SEZ development is increasing

Zones developed with a foreign partner are increasingly common. Despite the
attention that government-to-government partnership zones have attracted,
the majority are built with international private zone-development firms,
without formal agreements with a foreign government.
Nevertheless, formal international cooperation on zone development is
a growing phenomenon. A mixture of development assistance, economic
cooperation and strategic considerations is driving the development of
partnership zones with the support of investor home countries. Major
donor countries and multilateral development institutions have included the
development of SEZs in their development cooperation programmes.
Advantages for developing countries constructing SEZs with a foreign
partner include sharing development costs, tapping into the expertise and
Overview 23
Table 1. The SEZ development ladder
Zone policy objectives Prevalent zone types
High-income • Provide an efficient platform for • Logistics hubs free zones only (not
economies complex cross-border supply chains industrial free zones)
• Focus on avoiding distortions • Innovation and new industrial
in the economy revolution objectives pursued
through science parks without
separate regulatory framework,
or though incentives not linked
to zones
Upper-middle- • Support transition to services economy • Technology-based zones (e.g.

income • Attract new high-tech industries R&D, high-tech, biotech)
economies • Focus on upgrading • Specialized zones aimed at high
innovation capabilities value added industries or value
chain segments
• Services zones (e.g. financial
services)
Middle-income • Support industrial upgrading • Specialized zones focused on GVC-

economies • Promote GVC integration and upgrading intense industries (e.g. automotive,
• Focus on technology electronics)
dissemination and spillovers • Services zones (e.g. business
process outsourcing, call centres)
Low-income • Stimulate industrial development • Multi-activity zones

economies and diversification • Resource-based zones aimed at
• Offset weaknesses in investment climate attracting processing industries
• Implement or pilot business
reforms in a limited area
• Concentrate investment in
infrastructure in a limited area
• Focus on direct employment
and export benefits
Source: UNCTAD.
experience of partner countries and foreign zone developers, and gaining

preferential access to an established investor network.
Regional integration initiatives have also promoted the establishment of SEZs
along regional economic corridors. Regional development zones and cross-
border zones spanning two or three countries are becoming a feature of
regional economic cooperation.

SEZs can make important contributions
to growth and development
SEZs can help attract investment, create jobs and boost exports – both
directly and indirectly, where they succeed in building linkages with the broader
economy. Zones can also support global value chain (GVC) participation,
industrial upgrading and diversification.
Zones are a key investment promotion tool. The advantages of clustering
and co-location economies are an important attraction for investors. In many
countries, the incentives, infrastructure support and business facilitation in
SEZs are meant to compensate for weaknesses in the investment climate.
However, zones are neither a precondition nor a guarantee for above-average
performance on FDI attraction. Only about half of investment promotion
agencies worldwide believe the zones in their country have given a significant
boost to FDI attraction.
In many countries, zone programmes account for a major share of exports,
particularly manufactured exports. SEZs have been a key component of
export diversification efforts in developing countries, and they have been
instrumental in improving countries’ participation in GVCs. Trade costs such
as tariffs, border taxes and fees, accumulate when intermediate goods are
imported, processed and then re-exported in complex GVCs. By lowering
such transaction costs, SEZs have become major hubs in GVCs.
Zones are often an effective tool for job creation, particularly for women.
The impact of SEZ jobs in countries with high rates of unemployment and
underemployment is significant. Especially in the poorest countries, SEZs can
be an important avenue to formal employment.
However, none of the potential economic contributions of SEZs are automatic.
The performance of many zones remains below expectations. Where they
lift economic growth, the stimulus tends to be temporary: after the build-up
period, most zones grow at the same rate as the national economy. And too
many zones operate as enclaves with limited impact beyond their confines.
In addition, it is important to consider the social and environmental impacts
of SEZs. Zone labour standards, in particular, have often raised concerns in
the past. This is changing in modern zones. ESG practices are improving;
more than half of the SEZs polled in an UNCTAD survey have policies
on environmental standards and regulations, and some have adopted
international environmental standards.
Overview 25
To date, few countries systematically assess the performance and
impact of SEZs, and even fewer have instated mechanisms to deal
with underperformance. Doing so is critical, because the turnaround of
unsuccessful SEZs requires timely diagnosis, especially when there has
been a significant level of public investment in zone development. UNCTAD’s
SEZ Sustainable Development Profit and Loss Statement (P&L) can guide
policymakers in the design of a comprehensive monitoring and evaluation
system (table 2).
Lessons learned for modern zone development

Strategic design of the SEZ policy framework and development programme
is crucial. The types of zones and their specialization should build on existing
competitive advantages and capabilities. Some less developed countries
have sought to attract high-tech investors into SEZs to leapfrog into higher
value added activities and accelerate economic growth. Yet high-tech zones
in environments that lack key locational advantages for such activities –
including sufficiently skilled resources, research institutions and the amenities
to attract specialized foreign personnel – may not be viable. Zone development
plans should be long-term and guided by the SEZ development ladder.
Zone development programmes should take a frugal approach. The SEZ
Sustainable Development P&L emphasizes the need for financial and fiscal
sustainability of zones, as their broader economic growth impact can be
uncertain and take time to materialize.
Few countries conduct comprehensive assessments of zone benefits
against costs, including initial investment expenditures and operating
costs. Zones have the potential to provide development benefits beyond
direct economic and financial gains, supporting economic transformation
objectives, technology and skills development, and policy experimentation
opportunities. These development benefits can justify public investment in
zones. However, the financial and fiscal viability of zones is important for long-
term sustainability. High upfront costs due to overspecification, subsidies for
zone occupants and transfers to zone regimes of already-operating firms
pose the greatest risks to fiscal viability. Outsourcing zone development to
the private sector can substantially reduce the capital cost for governments,
as well as some of the risks involved.
The success of individual SEZs depends on getting the basics right. Most
failures can be traced back to problems such as poor site locations that

Table 2. SEZ sustainable development “profit and loss statement”
Cost-benefit areas Key elements
• Attraction of FDI
• Job creation
Direct economic contributions
• Export growth
• Foreign exchange earnings
+
• Supplier linkages beyond the zones
Indirect economic contributions
• Indirect and induced job creation
=
Combined economic impact • Additional GDP growth
+/-
• Investment expenditures
• Operating costs
Net cost of/revenue from zones
• Foregone revenues and subsidies
• Income from zones
=
• Payback time of zone investment
Fiscal/financial viability of zones
• Fiscal burden
+
• Technology dissemination
• Skills and know-how transfers
Dynamic economic contributions
• Industrial diversification and upgrading
• Enhanced regional economic cooperation
+/-
• Labour conditions
Social and environmental • Environmental impact
impacts and externalities • Appropriation or misuse of land
• Illicit flows
+/-
• Pilot function of zones
Policy learning and
• Catalyst function for reforms
broader reform impact
• Reduced motivation to reform
=
Overall sustainable • Evolution of the role of zones in the economy
development impact • Long-term zone transformations
Source: UNCTAD.
Overview 27
require heavy capital expenditures or that are far away from infrastructure
hubs or cities with sufficient pools of labour; unreliable power supplies; poor
zone design with inadequate facilities or maintenance; or overly cumbersome
procedures. The facilitation of administrative procedures for businesses and
investors in the zone through regulatory streamlining and one-stop shops or
single windows is a must.
Active support to promote clusters and linkages is key to maximizing
development impact. Firms operating in zones can benefit from network
effects and economies of scale. Zone specialization helps to promote
clustering. Firms operating in the same or adjacent industries have greater
scope to collaborate, pool resources and share facilities than firms operating
in unrelated industries. Nevertheless, even multi-activity zones can extract
some of the benefits of co-location. Firms in different industries can share
common services in the zone. Pro-active identification of opportunities,
matching efforts and training programmes, with firms within and outside the
zone, significantly boosts zones’ impact.
A solid regulatory framework, strong institutions and good governance
are critical success factors. The legal infrastructure of SEZs should ensure
consistent, transparent and predictable implementation of SEZ policies.
The responsibilities of SEZ governing bodies should be clearly defined. The
autonomy of the governing body, particularly in the context of an increasing
number of private zones, is important to minimize conflicts of interest.
The choice between public, private or public-private partnership zone
development models depends on the country-specific policy and legislative
context and on the types of SEZ that governments aim to develop. Private
sector zone development offers advantages, including a better understanding
of appropriate levels of investment and facilities best suited to the zone and
access to an established network of investors (tenants) in the zone.
Modern SEZs face a triple challenge

Where policymakers need to turn around struggling SEZs or to adjust zone
programmes that fail to deliver on objectives, they need options for reorienting
their strategic approach, reforming zone regulations and repackaging zone
benefits. That need may become increasingly acute with the evolution of three
key challenges: the sustainable development imperative, the new industrial
revolution and the digital economy, and changing patterns of international
production and GVCs.

The sustainable development agenda increasingly drives MNEs’ strategic
decisions and operations, which should be reflected in the value proposition
that SEZs market to investors. Laxer social and environmental rules or controls
are not a long-term viable competitive advantage to attract investment in
zones. SEZs marketing their environmental performance (ecozones) are
already emerging, and the enforcement and active promotion of high ESG
standards will increasingly become a feature of SEZs.
Modern SEZs can make a positive contribution to the ESG performance
of countries’ industrial bases. Controls, enforcement and services (e.g.
inspectors, health services, waste management and renewable energy
installations) can be provided more easily and cheaply in the confined areas
of SEZs. Fiscal incentives conditional not only on employment, investment or
export performance, but also on a range of social and environmental indicators
have the potential to become a key tool driving SEZs’ ESG performance and
sustainable development impact.
In line with the SDGs, that impact should include gender equality. SEZs
are traditionally big employers of women, with about 60 per cent female
employees on average. Some modern zones are implementing gender
equality regulations, such as anti-discrimination rules, and support services,
such as childcare and schooling facilities, setting new standards for SDG
performance.
The new industrial revolution and the digital economy are changing
manufacturing industries – the main clients of SEZs. The declining
importance of labour costs as a locational determinant for investment will
have fundamental implications for SEZs. SEZ development programmes
will need to adapt their value propositions to include access to skilled
resources, high levels of data connectivity and relevant technology service
providers, potentially through partnerships with platform providers. Digital
service provision by SEZ operators, e.g. through online single windows for
administrative procedures, becomes an increasingly important signal to
potential investors. At the strategic level, SEZs may have new opportunities
to target digital firms and orient their strategic strengths in logistics facilitation
towards the distribution activities in digital value chains. SEZs could also
act as incubators and promote clustering and linkages with digital start-ups
within and outside their confines.
Changes in patterns of international production and GVCs are a feature of
the current challenging global policy environment for trade and investment,
Overview 29
with rising protectionism, shifting trade preferences and a prevalence of
regional economic cooperation. These changes can significantly affect
the competitiveness of SEZs, which function as central nodes in GVCs.
International cooperation on zone development is likely to become increasingly
important. The trend towards more regional rather than multilateral economic
cooperation is likely to give further impetus to the development of regional
and cross-border zones.
The future: SDG model zones

The sustainable development imperative is arguably the most urgent challenge
facing policymakers, zone programme developers and zone managers today.
The 2030 Agenda for Sustainable Development provides an opportunity for
the development of an entirely new type of SEZ: the SDG model zone. Such
zones would aim to attract investment in SDG-relevant activities, adopt the
highest levels of ESG standards and compliance, and promote inclusive
growth through linkages and spillovers.
SDG model zones could act as catalysts to transform the “race to the bottom”
for the attraction of investment (through lower taxes, fewer rules and lower
standards) into a race to the top – making sustainable development impact
a locational advantage.
This process of modernizing zones and building SDG Model Zones can
benefit from a global exchange of experience and good practices. Also, with
more and more zones being developed through international partnerships, a
global platform that brings together financing partners, SEZ developers, host
countries, investment promotion agencies and outward investment promotion
agencies, as well as impact investors, can accelerate the transition towards
sustainable development-oriented zones. UNCTAD can play a leading role in
establishing such a platform in connection with its World Investment Forum,
and in supporting partnerships through its policy advice, technical assistance
and training programmes. The key objective should be to make SEZs work
for the SDGs: from privileged enclaves to sources of widespread benefits.

WORLD INVESTMENT REPORT
PAST ISSUES
WIR 2018: Investment and New Industrial Policies

WIR 2017: Investment and the Digital Economy
WIR 2016: Investor Nationality: Policy Challenges
WIR 2015: Reforming International Investment Governance
WIR 2014: Investing in the SDGs: An Action Plan
WIR 2013: Global Value Chains: Investment and Trade for Development
WIR 2012: Towards a New Generation of Investment Policies
WIR 2011: Non-Equity Modes of International Production and Development
WIR 2010: Investing in a Low-carbon Economy
WIR 2009: Transnational Corporations, Agricultural Production and Development
WIR 2008: Transnational Corporations and the Infrastructure Challenge
WIR 2007: Transnational Corporations, Extractive Industries and Development
WIR 2006: F
DI from Developing and Transition Economies: Implications for Development
WIR 2005: Transnational Corporations and the Internationalization of R&D
WIR 2004: The Shift Towards Services
WIR 2003: FDI Policies for Development: National and International Perspectives
WIR 2002: Transnational Corporations and Export Competitiveness
WIR 2001: Promoting Linkages
WIR 2000: Cross-border Mergers and Acquisitions and Development
WIR 1999: Foreign Direct Investment and the Challenge of Development
WIR 1998: Trends and Determinants
WIR 1997: Transnational Corporations, Market Structure and Competition Policy
WIR 1996: Investment, Trade and International Policy Arrangements
WIR 1995: Transnational Corporations and Competitiveness
WIR 1994: Transnational Corporations, Employment and the Workplace
WIR 1993: Transnational Corporations and Integrated International Production
WIR 1992: Transnational Corporations as Engines of Growth
WIR 1991: The Triad in Foreign Direct Investment
Overview 31
SELECTED UNCTAD PROGRAMMES
ON INVESTMENT AND ENTERPRISE
World Investment Report Investment Trends and Policies Monitors

worldinvestmentreport.org unctad.org/diae
World Investment Forum International Investment Agreements

worldinvestmentforum.unctad.org unctad.org/iia
UNCTAD Investment Policy Framework Investment Policy Reviews

for Sustainable Development unctad.org/ipr
investmentpolicyhub.unctad.org/ipfsd
ISAR Corporate Transparency Accounting
UNCTAD Entrepreneurship Policy Framework unctad.org/isar
unctad.org/en/PublicationsLibrary/diaeed2012d1_en.pdf
Transnational Corporations Journal
Sustainable Stock Exchanges Initiative unctad.org/tnc
sseinitiative.org
Business Facilitation
businessfacilitation.org
Business Schools for Impact

business-schools-for-impact.org
Investment Policy Hub

investmentpolicyhub.unctad.org
FDI Statistics
unctad.org/fdistatistics worldinvestmentreport.org
HOW TO OBTAIN THE PUBLICATIONS
The sales publications may be purchased For further information on the work on
from distributors of United Nations foreign direct investment and multinational
publications throughout the world. They enterprises, please address inquiries to:
may also be obtained by contacting:
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Customer Service Trade and Development
c/o National Book Network Palais des Nations, Room E-10052
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email: unpublications@nbnbooks.com Fax: +41 22 917 0498
unctad.org/diae
unp.un.org

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U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T

KEY MESSAGES AND

This work is available through open access, by complying with the

Photocopies and reproductions of excerpts are allowed with proper credits.

This publication has been edited externally.

United Nations publication issued by the United Nations Conference on Trade

ii World Investment Report 2019 Special Economic Zones

Inclusive sustainable development depends on a global policy

Among the most important instruments for attracting investment are

The market for internationally mobile investment in industrial capacity is thus

In countries with an SEZ portfolio or with ambitious SEZ development

iv World Investment Report 2019 Special Economic Zones

But even more important is that, today, sustainable development – as embodied

Comments and contributions were provided by Stephania Bonilla, Joseph

Statistical assistance was provided by Bradley Boicourt, Mohamed Chiraz Baly,

vi World Investment Report 2019 Special Economic Zones

Also acknowledged are comments received from other UNCTAD divisions as

Numerous officials of central banks, national government agencies, international

GLOBAL TRENDS AND PROSPECTS. . . . . . . . . . . . . . . . . . . . 1

INVESTMENT POLICY TRENDS . . . . . . . . . . . . . . . . . . . . . . . 15

SPECIAL ECONOMIC ZONES. . . . . . . . . . . . . . . . . . . . . . . . . 22

viii World Investment Report 2019 Special Economic Zones

FDI flows to economies in transition continued their downward trend in 2018,

The tax-driven fall in FDI was cushioned by increased transaction

The long-term slide of greenfield investment in

Top 100 MNEs

1/3 R&D worldwide

similar to 2017. Their presence in the top 100 of business-funded

Much of the continued expansion of international production is driven by

34for more than

A significant part of investment between developing countries (South–South

INVESTMENT POLICY DEVELOPMENTS + 40

2018, some 55 economies introduced at least 112

1/3 R&D worldwide

Nevertheless, attracting investment remains a priority. The majority of new

International investment policymaking is in a dynamic phase, with far-reaching

implications. In 2018, countries signed 40 international investment agreements

2 658 they brought at least 71 new investor–State dispute

xii World Investment Report 2019 Special Economic Zones

Sustainable capital market trends 2 658

Special economic zones (SEZs) are widely used in most

SEZs come in many types. Basic free zones focused on

SEZs can make important contributions to growth and development. They

Only a few countries regularly assess the performance

SDG model zone

Looking ahead, SEZs face new challenges:

The recommendations in this report aim to

xvi World Investment Report 2019 Special Economic Zones

Global trends and prospects

Global FDI fell for the third year in a row

FDI inflows, global and by economic group, 2007–2018

World total Developing economies

FDI to developed countries dropped

2 World Investment Report 2019 Special Economic Zones

(x) = 2017 ranking

(x) = 2017 ranking

4 World Investment Report 2019 Special Economic Zones

Figure 4. FDI inflows and the underlying trend, 1990–2018

FDI underlying trend,