1. Uzbekistan: the jewel in the crown
Uzbekistan located in Central Asia has been a model country when it comes to attracting FDI in the past 6 years when it stopped being a Soviet state.
The incoming President at the death of long-time autocrat in 2016 set about opening up the country to the West, liberalising the economy and becoming a free market.
GDP was 5.5% in 2022 and 5.7% in the first quarter of 2023. Uzbekistan has less oil than its neighbours but is rich in cotton wheat, agriculture products, textiles and its young population is naturally proficient in technology.
Uzbekistan has low sovereign debt and has just signed several new treaties with key trading partners to encourage trade. Its goal is to attract £120 bn FDI in the next five years. The current President has pledged to increase the private sectors share of GPD to 80% by 2030.
Its top source of FDI is France followed by UAE, Germany, and Russia. Most investments come in the form of public-private partnerships.
2. Developing Countries Trading Scheme
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The UK has implemented a new post-Brexit Developing Countries Trading Scheme (DCTS) which allows goods from 65 developing countries to enter the UK on reduced tariffs & red tape.
Over half the countries are in Africa and the new scheme is said to reduce £770 million per year in UK business costs by cutting tariffs on £9 billion of imports.
More information is available here.
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3. AI FDI trends
In 2022 there were 369 AI FDI projects globally. This has increased to 660 projects in 2022, an increase of 44%.
NVIDIA the US chipmaker has just announced that it will build a data centre in Israel to produce Spectrum-X, a new networking platform that improves the performance of AI clouds. Currently the biggest blocker to AI is the speed at which information moves around the data centre – Spectrum-X aims to fix this problem. NVIDIA has also built a new supercomputer in the data centre. Called Israel-1, it has cost hundreds of millions of dollars in development over the past 18 months. With a performance of 8 exaflops it will be ‘one of the world’s fastest high-performance systems.’ NVIDIA has also announced that it will likely invest in Europe to become a ‘truly global company.’
Globally, Dubai was the top city recipient for AI FDI with the top country spot going to India.
4. Nigeria: all change
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Nigeria is Africa’s largest economy with FDI accounting for around 20% of GDP in 2021. However, FDI has plateaued since 2021.
The Nigeria-Morocco gas pipeline will run through 11 West African countries and bolster gas trade with Europe. The 5,600km pipeline project is worth $25 bn and has been under negotiation since 2016.
A a history of civil unrest and geopolitical instability has caused some anxiety for investors.
However, Nigeria has a new Government with the election of Bola Tinibu who scrapped the petrol subsidy that cost Nigeria $9.7 bn in 2022 as soon as he took office. Tinubu has announced the economy and insecurity are top of his agenda.
5. Bank of Ireland workspace
Ardfern via Wikimedia Commons
The Bank of Ireland has reopened a shared working space for visiting international businesses above its Dublin branch.
The Bank of Ireland FDI team has assisted 600 companies establish roots in Ireland over the past ten years by providing banking solutions.
The shared working space underwent refurbishment during the pandemic.
6. Philippines EU status
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The Philippines Minister for Trade has been doing a roadshow through Europe advocating for a free trade agreement by 2028. Negotiations on the current trade deal commenced in 2015.
Philippines’ status will soon change as it becomes a developed country. This means it stops being a developing one with access to various schemes and preferential treatments.
Internal EU politics is delaying the extension of the current deal with Philippines beyond 2023 when it expires. The Generalised Scheme of Preference (GSP+) grants preferential schemes to some countries but is being internally debated amongst EU politicians as to whether it should be linked to immigration. If the GSP+ is not resolved, the Philippines will face a cliff edge on the current deal.
In addition, the Philippines may soon be classified as an upper middle class country by the World Bank, causing tariffs to snap back in place, as it would no longer qualify for GSP+ after 3 years which would be 2028.
7. UK FDI job creation
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The Department for Business and Trade has reported that 80,000 new jobs will be created across the UK from 1,600 new FDI projects.
76 projects in the automotive sector in 2022/2023 created 3,807 new jobs. 103 projects in Yorkshire and the Humber will apparently create 7,378 new jobs. 137 new projects in the North West will create 5,820 new jobs. Read the DBT inward investment results here.
8. Germany FDI
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A report by The German Economic Institute has reported a record breaking gap in inbound FDI compared to outbound. Economists say causes are high energy prices, lack of skilled workers, taxes and bureaucracy.
Last year, Germany experienced a €125 billion FDI deficit, or 13.5x less in than out.
US chipmaker Intel bucked the trend last year announcing a new semiconductor fabrication plant, for which the German Government subsidised €10 million or a third, indicating a current trend of using taxpayer money to fund inward investments. The project will be the largest FDI project in Germany’s history.
9. West Midlands second only to London
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The West Midlands has reported the highest regional growth rate in the UK for 2022/23.
181 FDI projects were reported which represents 10% of all the UK’s FDI projects, second only to London.
Reportedly 8,252 jobs were created as a result of the projects. The Midlands’ Business and Tourist Programme is said to be a catalyst for the growth. India is the top investor. The scheme led trade and investment missions to India; Australia, Malaysia and Singapore and the US.
Birmingham, Wolverhampton and Coventry and Warwickshire all secured top three places in FDI Intelligence’s European Cities and Regions of the Future 2023 report.
10. Utah trade mission favours Cambridge
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A recent trade mission from Utah that visited the UK and France favoured Cambridgeshire above all other regions and places. The mission wanted to find out how Cambridge had become a globally recognised centre of innovation.
The event at Cambridge featured local speakers on the local economy and what made it unique, how innovation is commercialised, AI, the investing and financial landscape, and how talent is attracted and developed.
Utah is the fastest growing life sciences region in the US. STEM produces $19 billion for Utah which is 15% of its economy.
Featured image Sultonbek Ikromov via Unsplash
