1.1 Growing international linkages through foreign direct investment (FDI) are an important feature of financial globalization and raise important challenges for policymakers and statisticians in industrial and developing countries alike. With the integration of international capital markets, world FDI flows grew strongly in the 1990s at rates well above those of global economic growth or trade. This has placed the activities of direct investors and direct investment enterprises under increasing scrutiny and presented new challenges for statistical recording, balance of payments projections, economic surveillance, and vulnerability analysis. This report surveys the recent state of FDI statistics at the international and national levels.
1.2 The IMF and other international and regional organizations are working with countries to improve FDI statistics by developing methodologies and providing compilation guidance (including information on country practices), and through technical assistance, training courses, and workshops.
1.3 Countries are compiling and disseminating more data on FDI transactions and stocks and increasingly are adopting the recommendations of international statistical manuals. However, despite these improvements, and reflecting the complexities of compiling these data, there remain important deficiencies in the coverage and comparability of data in both industrial and developing countries. One symptom of these deficiencies is the sizable discrepancies seen in global aggregations of FDI outflows and inflows published by the IMF.1
1.4 This report provides an overview of (i) the available statistics on FDI (covering recent trends and data availability); (ii) the concepts and definitions set out in international statistical manuals—namely, the fifth edition of the IMF’s Balance of Payments Manual (BPM5; IMF, 1993) and the third edition of the OECD’s Benchmark Definition of Foreign Direct Investment (Benchmark Definition; OECD, 1996); and (iii) country practices in implementing these guidelines. The report is structured as follows. Chapter 2 defines direct investment. Chapter 3 reviews recent trends in the global data on FDI, while Chapter 4 describes the main sources of statistics on direct investment and discusses some of the statistical discrepancies in the published data on FDI. Chapter 5 reviews in greater detail the key concepts and definitions set out in the international statistical manuals for the recording of FDI, while Chapter 6 presents some of the findings from a recent joint IMF-OECD survey on methodological practices regarding the measurement of FDI in 61 countries and how these practices compare with the international recommendations for FDI statistics. The report concludes that an internationally coordinated survey may be required to strengthen FDI statistics across countries.
At the global level, outflows of FDI capital from investing countries should equal the inflows recorded by the recipients of this capital.