-- Study Highlights Foreign Direct Investment
in Emerging Markets --
WASHINGTON, D.C., June 8, 1998 ---The International Finance Corporation
today released the Arabic-language edition of "Foreign Direct Investment."
The study reviews the interaction between policy frameworks and the volume
and performance of foreign direct investment (FDI). This is the fifth
volume of IFC’s "Lessons of Experience" series of studies which
draw on IFC’s experience as an investor and policy advisor in emerging
The IFC study finds that FDI flows are not easy to attract; nor do all
foreign investments lead to profitable enterprises. It also says
that a sound policy framework -- one that holds few restrictions on foreign
ownership, a liberal trade and payments regime, open access to land and
labor, low and uniform taxes, limited public sector involvement in the
economy, and minimum red tape -- is key to capturing foreign investor interest
and to successful investments. The study concludes that with sound
policies even those countries considered risky by investors can attract
In 1996, Morocco, Tunisia, and Egypt attracted most of the FDI flows to
the Middle East and North Africa region. However, the study notes
that FDI in the region remains low at six percent of the total flows to
developing countries, which amounted to US$706.3 billion in 1996.
Publication of this study in Arabic is intended to better inform the Arabic-speaking
business community and build greater awareness of IFC’s products and services.
The study was written by Dale Weigel of the Foreign Investment Advisory
Service (FIAS) and Neil Gregory and Dileep Wagle of IFC’s Corporate Planning
Department. Previous studies in the series include papers on IFC’s
experience with privatization, leasing, investment funds, and financing
Established in 1989, FIAS is a joint service of IFC and the World Bank,
which advises developing countries on policies to promote FD. IFC,
part of the World Bank Group, fosters growth in the developing world and
in emerging economies by financing private sector investments, mobilizing
capital in the international financial markets, and providing technical
assistance and advice to governments and businesses.