The United Nations Conference on Trade and Development (UNCTAD) in June 2019 released the 2019 World Investment Report, which analyses global and regional foreign direct investment trends and prospects. It also documents national and international investment policy developments.

In its theme chapter, the 2019 Report provides the global landscape of special economic zones (SEZs) and offers a policy framework for addressing key emerging challenges.

The report highlights:

• Global foreign direct investment (FDI) flows slid by 13% in 2018, to US $1.3 trillion, the third consecutive annual decline. These contractions were largely precipitated by US multinational enterprises repatriating earnings from abroad, making use of tax reforms. Hardest hit were developed countries, where flows fell to the lowest level seen since 2004.
• Developing country flows managed to hold steady (rising by 2%), which helped push flows to the developing world to more than half (54%) of global flows, from 46% in 2017.
• In 2019, FDI is expected to recover by around 10%, but the level of flows remains below the average of the past ten years.
• New national investment policy measures show a more critical stands towards foreign investment, while international investment policymaking is in a dynamic phase.
• A new wave of industrial policies and increasing competition for international investment has sparked a boom in SEZs. Today there are 5,400 zones across 147 economies, up from 4,000 five years ago. More than 500 new SEZs are in the pipeline.

The report sets out a number of lessons learned on the design, operation, and governance of SEZs aimed at minimizing risks and maximizing the development impact of zones and preparing them for contributing positively to the environmental, social and governance (ESG) performance of countries’ industrial base, and adapt to the digital economy.

The full report can be downloaded in PDF format here.