The World Investment Report 2013, produced by the Geneva-based UN Conference on Trade and Development (UNCTAD), adds that the majority of ‘greenfield’ investment in the least developed countries (LDCs) – new investment or expansion of existing investment in recipient nations, as opposed to investment through mergers and acquisitions – originated in other developing economies, led by India.

Subtitled Global Value Chains: Investment and Trade for Development, the report notes that growth was led by strong gains in Cambodia (where inflows were up 73 per cent), the Democratic Republic of the Congo (96 per cent), Liberia (167 per cent), Mauritania (105 per cent), Mozambique (96 per cent), and Uganda (93 per cent).

However, 20 LDCs reported declines in FDI, the report states, adding that the trend was particularly pronounced in Angola, Burundi, Mali, and the Solomon Islands.

Secretary-General Ban Ki-moon commended the report, calling it a “source of reflection and inspiration” for meeting today’s development challenges.

“The 2013 World Investment Report comes at an important moment. The international community is making a final push to achieve the Millennium Development Goals by the target date of 2015,” he said, referring to the anti-poverty targets known as the MDGs.

“At the same time, the United Nations is working to forge a vision for the post-2015 development agenda. Credible and objective information on foreign direct investment (FDI) can contribute to success in these twin endeavours.”

Global FDI, Ban noted, declined in 2012, mainly due to continued macroeconomic fragility and policy uncertainty for investors, and it is forecast to rise only moderately over the next two years.

“Yet as this report reveals, the global picture masks a number of major dynamic developments,” he said. “In 2012 – for the first time ever – developing economies absorbed more FDI than developed countries, with four developing economies ranked among the five largest recipients in the world.

“Developing countries also generated almost one third of global FDI outflows, continuing an upward trend that looks set to continue.”

The report notes that while the estimated value of announced greenfield investment projects in LDCs declined, developing economies – with 59 per cent of the value of greenfield projects – were the largest such investors in LDCs in 2012.

In terms of share of greenfield projects in LDCs in 2012, companies from India were responsible for 20 per cent of total value, according to the report. In addition to their scale, India’s investments in LDCs have been diversified geographically and sectorally, it adds.

Among the destinations of large-scale projects, in 2012 Mozambique was the largest recipient of Indian greenfield investment (45 per cent), followed by Bangladesh (37 per cent) and Madagascar (8 per cent).

In Africa, greenfield investments from India were targeted at the east and south of the continent. These projects were not limited to large-scale investments in extractive and heavy industries, but also extended to smaller ones in pharmaceuticals and health care.

In Asia, while Bangladesh was the only LDC where Indian greenfield investment was announced during 2012, Indian projects were spread over various industries, including automotives, information technology, pharmaceuticals, textiles, and tyres, the report says.

The East Jerusalem economy constituted 15 per cent of the Palestinian economy prior to the signing of the 1993 Oslo Accords, but has shrunk to an estimated 7 per cent in recent years, according to the report.

While the GDP of East Jerusalem (around US$600 million in 2010) has increased, albeit marginally, since 2001, its relative size has fallen because growth in East Jerusalem has lagged behind that of the remaining Occupied Palestinian Territory (OPT).

It has been estimated that the Israeli separation barrier has imposed over $1 billion in direct losses to the economy of East Jerusalem since its construction began in 2003, the report says. Its adverse impact in terms of lost trade and employment opportunities endures, and is estimated at around $200 million per year, according to the study.

UNCTAD economists note that Jerusalem – of significance to people and faiths from around the world – has been gradually detached from the Palestinian economy, despite its historic role as the Palestinian people’s commercial, cultural and spiritual centre.

The economy of East Jerusalem is not only constrained by Israeli impediments affecting the OPT generally. Many of the obstacles to the city’s development are specific to the status of East Jerusalem as an occupied territory subsequently unilaterally annexed to Israel, the report says.

UNCTAD notes that Palestinian poverty in Jerusalem has risen steadily over the last decade, as the city’s isolation from its Palestinian hinterland has continued to increase since the second intifada and the construction of the Israeli separation barrier. In the space of one year alone, the poverty rate of Palestinian households rose from 68 per cent (in 2009) to 77 per cent (in 2010). By comparison, only 25 per cent of Israeli households in (both East and West) Jerusalem were classified as poor in 2010. The available data indicate that 82 per cent of Palestinian children in East Jerusalem were living in poverty in 2010, compared to 45 per cent of Israeli children living in Jerusalem.

UNCTAD contends that the economy of East Jerusalem is integrated neither into the Palestinian economy nor into the Israeli economy. East Jerusalem’s economy is structurally dependent on the West Bank to sustain production, trade and employment, and at the same time is forcibly dependent on the Israeli market, to whose regulations it must conform, and which serves as a source of employment and trade and as the principal channel for tourism to the city.

“These paradoxical relations have served to effectively leave the East Jerusalem economy to fend for itself in a developmental limbo, severed from Palestinian Authority jurisdiction and subordinated to the Jewish population imperatives and settlement strategies of Israeli municipal and State authorities,” UNCTAD asserts.

UNCTAD slammed Israel for not doing enough to meet its obligations as an occupying power, urging the country to act “with vigour to improve economic conditions in east Jerusalem and the well-being of Palestinian residents.”

It also called for an end to “settlement activities and the occupation of east Jerusalem in line with United Nations resolutions.”

Israel captured the Arab eastern part of Jerusalem during the 1967 Six-Day War and later annexed it in a move that has never been recognised by the international community.

Produced by the UN Conference on Trade and Development (UNCTAD), the Trade and Development Report 2012 says that recent experience, especially in Latin America and other developing countries, suggests that progressive taxation and rising public spending can strongly contribute to the process of inclusive growth.

The report adds that this approach would reduce income inequality while also providing the prospect of expanding demand that is needed for firms to increase investment.In several countries, the richest one per cent of the population now accounts for 10 to 20 per cent of national wealth.

Trends over the last 30 years show income inequality increasing both within countries and between them, UNCTAD says in a news release. The share of wages in total income has fallen in most developed and in many developing countries, including by five percentage points or more in Australia, the United Kingdom and the United States, and by 10 percentage points or more in France, Germany and Ireland.

In several countries, the richest one per cent of the population now accounts for 10 to 20 per cent of national wealth. The report notes, however, that governments can use fiscal and labour market policies to reduce income inequality.

“This goal is worthwhile not only for reasons of fairness and social welfare, but because it would improve economic performance,” says UNCTAD.

More even income distribution also pays off over the long term, it contends, because high inequality deprives many people of access to education and credit, and prevents the expansion of domestic markets. Over years and decades, that amounts to an enormous waste of a country’s economic potential.

“Thus, a better income distribution pattern would help stimulate and sustain economic growth in the short run and would provide stronger incentives for investment, innovation and job creation in the long run,” says the report.

In its review of trends in the global economy, the report warns that growth is slowing in all regions of the world, which it says are “hamstrung in part by austerity measures that are hampering demand in the major developed-country markets, thus cutting the export prospects of developing countries.”

Global growth fell from 4.1 per cent in 2010 to 2.7 per cent in 2011, according to the report, with a further decline expected by UNCTAD – to below 2.5 per cent – in 2012.

The session, known as UNCTAD XIII, is the first ministerial conference on trade and development since the fallout from the 2007-2008 global economic crisis. The sessions are held every four years, and the theme of this year’s session is ‘Development-centred globalization: Towards inclusive and sustainable growth and development.’

According to the report, mounting financial speculation in commodities and the increasing diversion of agricultural land to biofuel crops has changed the forces underpinning commodity prices, pushing them through a sustained period of increase.

What should be a benefit for poor nations, especially the globe’s 48 least developed countries – whose economies often depend heavily on commodity exports – is on balance a negative development because many of these countries are net importers of oil and staple foods.

Since the food crisis of 2008, prices for basic nourishment have been both volatile and high, the report notes – and poor families are acutely vulnerable, as they typically spend 50 per cent or more of their incomes on food.

The report’s recommendations include that steps be taken to invest in national and regional food reserves to help food-insecure countries; the recent shift to ‘finance-driven globalization,’ as it applies to commodities, should be reconsidered; fiscal and taxation policies should be adjusted so that they help developing countries reap stable, long-term economic benefits from commodities exports; and measures should be taken nationally and internationally to improve the situations of small farmers and other small commodity producers in poor countries.

UNCTAD XIII was officially opened over the weekend. Addressing the opening ceremony on Saturday, the Deputy Secretary-General, Rose Asha-Migiro, said it was appropriate that the conference was taking place in the Arab world, “where rapid political transformations are creating new job opportunities for development.”

“The recent unrest in the Arab world has shown that a lack of economic opportunity and political voice, particularly among youth, is not sustainable,” she said. “Indeed, growing awareness of social injustice and inequality has also led to protests in several advanced countries.”

The Deputy Secretary-General noted that UNCTAD XIII provided an opportunity to address five principal challenges: identifying measures needed to restore growth in the global economy; examining the causes of the crisis, especially those of a systemic nature, and identify measures to prevent its recurrence; identifying trade and developments policies that support efforts to mitigate climate change; making globalization more inclusive; and, lastly, unlocking the full potential of international business.

“UNCTAD’s universal membership, combined with its broad mandate covering trade, finance, investment, technology and sustainable development, make UNCTAD XIII a timely forum to chart the way forward,” Ms. Migiro said. “A failure at this juncture could lead to a loss of trust, and undermine the legitimacy of globalization and its development promise.  Much is at stake.”

Addressing UNCTAD XIII on Sunday, the President of the General Assembly, Nassir Abdulaziz Al-Nasser, said UNCTAD had, throughout its existence, closely reflected the concerns of the majority of the Assembly’s membership in the area of development – with that majority of nations also representing the vast majority of the world’s population, and with most of those hailing from developing countries.

“I am here today to reaffirm and renew our shared commitment to the special role that UNCTAD has played – and must continue to play – in giving voice and support to the most urgent needs of the developing nations,” the Assembly President said. “The interests of the most developed countries are also addressed when we recall the importance of South-South and triangular cooperation in the area of development.”

“Do not be misled by the pep talks and some of the short-term viewpoints that we’re seeing recovery here and there – we are not out of the woods, we are far and away not out of the woods yet. Some of the recoveries are fragile, only in some parts of the world are we seeing some real recovery,” the Secretary-General of the UN Conference on Trade and Development (UNCTAD), Supachai Panitchpakdi, said at a joint news conference in Doha.

The 13th session, known as UNCTAD XIII is taking place in Doha from 21 to 26 April, is the first such conference since the fallout from the 2007-2008 global economic crisis. The sessions are held every four years, and the theme of this year’s session is ‘Development-centred globalization: Towards inclusive and sustainable growth and development.’ Panitchpakdi said the global trading system’s gains over the last decade had been lost in the recent crisis, and, in what amounted to an increasingly multipolar world, the meeting would provide a crucial platform for Member States to share experiences and lessons learned – and, hopefully, concrete recommendations based on their experiences would emerge.

Speaking at the same news conference, the President of the General Assembly, Nassir Abdulaziz Al-Nasser, said the Assembly remains concerned about the current global economic situation. “I am here in Doha to participate in this high-level UNCTAD Conference because I wish to give this event all the attention and support it deserves,” Mr. Al-Nasser said. “It is also in the interest of developed countries to support UNCTAD since the benefits would be shared between developed and developing nations based on what we call in the UN, South-South and Triangular Cooperation for development.”

Established in 1964, UNCTAD promotes the development-friendly integration of developing countries into the world economy, and seeks to help shape current policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.

It has long maintained that the current global economic and financial system has allowed a lop-sided system to flourish, with some participants reaping the benefits while global income inequality and financial imbalances have also accumulated.