The IMF’s Balance of Payments Manual, fifth edition (BPM5) defines FDI as a category of international investment that reflects the objective of a resident in one economy (the direct investor) obtaining a lasting interest in an enterprise resident in another economy (the direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the direct investment enterprise, and a significant degree of influence by the investor on the management of the enterprise. A direct investment relationship is established when the direct investor has acquired 10 percent or more of the ordinary shares or voting power of an enterprise abroad.
In this paper, inflows mean net inward FDI transactions, i.e., inward investments less disinvestments (FDI in the reporting economy); outflows mean net outward FDI transactions, i.e., outward investments less disinvestments (FDI abroad).
During 1998-2001, portfolio investment inflows averaged US$72 billion a year, while other investment inflows averaged a negative US$50 billion a year, representing an excess of disinvestments over investments.
The global stock of FDI assets and liabilities should, in principle, be the same.
Other regional organizations, including ASEAN and ECLAC, also disseminate FDI statistics relating to their members and conduct various work activities such as workshops and training in support of the development and harmonization of FDI statistics in the regions.
The number of countries reporting inward data on equity capital also increased significantly from 92 in 1994 to 123 in 2001 and from 55 to 66 for the outward data. The increases for the data on other capital were from 76 to 91 for the inward data and from 31 to 54 for the outward data.
Many countries reported additional component detail on FDI positions in recent years, About three times more countries reported data on other capital in 2001 than in 1994 (increases from 16 to 54 for the inward data and from 16 to 46 for the outward data). There were similarly significant increases in the numbers that reported data on equity capital and reinvested earnings (from 24 to 66 for the inward data and from 23 to 60 for the outward data).
The 2001 SIMSDI update covered the 30 OECD countries and 31 other IMF member countries that responded to the 1997 survey. All of the subscribers to the IMF’s Special Data Dissemination Standard (SDDS) at that time were covered.
Like other components of the balance of payments, the discrepancies do not provide a complete indication of the underlying data problems, as there are offsetting errors, e.g., when both parties to a transaction fail to report.
International Investment Position—A Guide to Data Sources (2002). Also available on the IMF website. See http://www.imf.org/external/np/sta/iip/guide/index.htm
STA conducted 32 technical assistance missions and 13 training courses and seminars in external sector statistics in 2002.