The latest Global Investment Trends Monitor (GITM) shows that over the past decade, FDI going into BRICS has more than tripled, totaling $263 billion in 2012. This figure represents 20 per cent of world FDI flows, and is a significant increase considering it was only 6 per cent in 2000.

Meanwhile, investment from BRICS into other countries has climbed from $7 billion in 2000 to $126 billion in 2012, rising from 1 per cent of world flows to 9 per cent, with China and Russia accounting for the majority of these investments.

In particular, the report highlights that foreign investment from BRICS into Africa represented 25 per cent of Africa’s inflows last year, with most funds going to the manufacturing and services sectors.

While labour costs in Africa may not differ significantly from those in the firms’ home economies, the duty-free, quota-free access of African countries and China’s zero-tariff measures for African least developed countries (LDCs) have generated manufacturing investment.

Brazil, for example, has expanded its business in the new African ethanol industry in countries like Angola, Ghana and Mozambique; China is one of the top investing countries in LDCs such as Sudan and Zambia; an Indian company recently acquired an African mobile phone network; and Russian banks are expanding to countries such as Côte d’Ivoire and Nigeria.

The report notes that this growing relationship between BRICS and Africa is likely to be reinforced in the future due to the rapid economic growth and industrial upgrading currently taking place in BRICS countries.

“The rise of FDI in manufacturing, which has positive consequences for job creation and industrial growth, is becoming an important facet of South–South economic cooperation,” it says.

However, the main share of BRICS’ outward investment is still in developed economies, with 34 per cent of their stocks going to the European Union. The report notes that these investments are in large part driven by ‘market-seeking motives’ as well as mergers and acquisitions across borders.

The report, produced by the UN Conference on Trade and Development (UNCTAD), was released ahead of the 5th BRICS Summit which starts tomorrow in Durban, South Africa, and whose theme is “BRICS and Africa: Partnership for development, integration, and industrialization.”

“Ironically, only in developed economies are youth unemployment rates expected to fall in the coming years, but this follows the largest increase in youth unemployment among all regions since the start of the crisis,” said Ekkehard Ernst, the lead author of the UN International Labour Organization (ILO)’s paper, entitled Global Employment Outlook: Bleak Labour Market Prospects for Youth.

The paper forecasts the youth unemployment rate in developed economies dropping gradually, from 17.5 per cent this year to 15.6 per cent in 2017 – far higher than the rate of 12.5 per cent registered in 2007, before the crisis struck.

Much of the projected decline in the jobless rate is not due to improvements in the labour market, but rather to large numbers of young people dropping out of the labour force altogether due to discouragement, ILO noted in a news release, adding that these discouraged youth are not counted among the unemployed.

According to ILO, young people are three times more likely to be unemployed than adults, and over 75 million youth worldwide are looking for work. The labour agency has previously warned of a “scarred” generation of young workers facing a dangerous mix of high unemployment, increased inactivity and precarious work in developed countries, as well as persistently high working poverty in the developing world.

The ILO paper notes that the global youth unemployment rate will reach 12.9 per cent by 2017 – up 0.2 percentage points from forecasts for 2012. Youth unemployment is projected to be highest in North Africa and the Middle East, with a 25 per cent rate forecast over the next years.

The labour agency notes that even in countries with early signs of a jobs recovery and where new vacancies are opening up, many unemployed youth still find it difficult to land a job. For example, a construction worker whose job was lost during the housing bust might not have the skills needed in sectors that are hiring.

“This leads to discouragement and rising NEET rates (“neither in employment, education or training”) among young people,” said Mr. Ernst, who also heads ILO’s Employment Trends Unit. “Schemes using employment guarantees and an emphasis on training could help get jobseekers off the street and into useful activities, providing a safeguard against further economic stress.”

According to the paper, such youth guarantees can come at very limited cost, less than half a per cent of gross domestic product among European countries.

“In times of constrained public finances, this may seem like a large additional burden, but it will be less than the additional costs that come from young unemployed people permanently losing touch with the labour market,” the paper states.

At its annual conference in June this year, ILO adopted a resolution calling for immediate, targeted and renewed action to tackle the youth employment crisis. The resolution provides a portfolio of tried and tested measures in five areas: macro-economic policies, employability, labour market policies, youth entrepreneurship and rights. It underscores the need for balance, coherence and complementarity across policy measures.