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Meeting No: 2518 129 0706
Password: invest

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Abstract

Foreign direct investment (FDI) has long served as a critical source of external financing for emerging market and developing economies (EMDEs), enabling them to build infrastructure, reduce poverty, create jobs, and advance climate goals. Since the global financial crisis, however, FDI inflows have steadily retreated. The share of FDI in EMDE GDP has fallen from nearly 5 percent in 2008 to just about 2 percent in recent years, with four out of six regions registering significant declines. This erosion reflects both global and domestic headwinds: escalating geopolitical tensions, heightened policy uncertainty, the slowdown in new investment treaties, and increasingly restrictive regulatory frameworks. The implications are far-reaching, exacerbating infrastructure gaps, limiting opportunities for employment and growth, and constraining the ability of EMDEs to attract capital for the green transition. Yet the retreat of FDI is not inevitable. By strengthening institutions, maintaining macroeconomic stability, easing restrictions on trade and investment, and reviving global cooperation, EMDEs can once again harness FDI as a driver of sustainable development. The panelists will deliberate on these challenges, opportunities, and policy pathways for revitalizing FDI in the years ahead.

About the Speakers

M. Ayhan Kose

Ayhan Kose is the Deputy Chief Economist of the World Bank Group and Director of the Prospects Group. He is a member of the Chief Economist’s leadership team overseeing the Bank’s analytical work, and policy and operational advice. He also leads the Bank’s work on the global macroeconomic outlook, financial flows, and commodity markets. Under his management, the Prospects Group produces the Bank’s flagship reports Global Economic Prospects and Commodity Markets Outlook, in addition to other policy and analytical publications. Prior to joining the World Bank, he was Assistant to the Director of the Research Department and Deputy Chief of the Multilateral Surveillance Division in the International Monetary Fund (IMF). He served in a wide range of roles supporting IMF’s analytical, policy, and operational work. Mr. Kose is a Nonresident Senior Fellow at the Brookings Institution, a Dean’s Fellow at the University of Virginia’s Darden School of Business, a Research Fellow at the Center for Economic Policy Research (CEPR), and a Research Associate at the Center for Applied Macroeconomics (CAMA). He taught at the University of Chicago’s Booth School of Business, INSEAD, and Brandeis International Business School. He has a Ph.D. in economics from the Tippie College of Business at the University of Iowa and a B.S. in industrial engineering from Bilkent University.

Amat Adarov

Amat Adarov is a Senior Economist with the World Bank's Prospects Group. His research focuses on macroeconomics, international trade, and finance. He leads a research agenda on investments and contributes to the flagship Global Economic Prospects report. His recent journal publications include studies on integration, macro-financial stability, capital flows, and global value chains. Prior to joining the World Bank, he led a range of research projects in international economics at the Vienna Institute for International Economic Studies. His previous professional experience in the public sector focused on macroeconomic analysis and modelling, forecasting, and investment policies. He holds a Ph.D. in Economics from Sam M. Walton College of Business at the University of Arkansas.

Hayley Pallan

Hayley Pallan is an Economist with the World Bank's Prospects Group. She works on macroeconomic issues. Her current research includes work on foreign direct investment, sovereign debt, and labor markets. She received her PhD from the Graduate Institute of International and Development Studies in Geneva.