GENEVA - Foreign investment in Central and Eastern Europe rose by 15 percent in 2002
to reach a record high even as world investment flows remained in the worst
slump for 30 years, the United Nations.
Foreign Direct Investment inflows last year into the region rose to a record
of $29 billion, the United Nations Conference on Trade and Development said
in its report on global investment released on Sept. 4.
The Secretary General of the UN organization, Rubens Ricupero, also gave a
rosy outlook for the region, which stands to gain from next year's eastwards
expansion of the European Union. Ricupero said that he expected foreign
investment to rise both this year and in 2004.
The report noted that global investment had fallen to a 30-year low point in
2001 and 2002. But it said that the Central and Eastern European region,
still coping with the economic legacy of decades of communist rule, could
see investment inflows reach close to $30 billion in 2004 as investors flock
to an increasingly stable area.
A further boost would come from expansion of the European Union, which
should benefit the countries in the region that are set to join the bloc in
2004.
Enlargement "is one of the most important policy developments affecting
foreign direct investment in Central and Eastern Europe for the immediate
future," the U.N. report said.
Investment growth has been especially steep in countries that have seen
strong waves of privatization, such as the Czech Republic, Slovakia and
Slovenia, where foreign investment all climbed sharply in 2002.
By contrast, the report found that investment in Poland fell and former
heavyweight Hungary has now slipped down to eighth place on the list of the
top recipients of foreign investment in the region.
Foreign investment inflows were down in 10 of the 19 countries in the
region.
Differences were also recorded on a sector level, with the auto industry
showing particularly strong growth, helped by investments from PSA Peugeot
Citroen in Slovakia, Renault in Russia and Audi and Suzuki in Hungary.
However the electronics industry is facing a crisis due to the global
overcapacity afflicting the sector worldwide and cut-price competition from
East Asia.
The Czech Republic, Hungary, Lithuania, Poland, Slovenia and Slovakia have
plans to join the European Union next year along with Malta and Cyprus.
Latvia and Estonia will decide on EU membership in referendums taking place
within the next two weeks.
