IRM Directory of Statistics of International Investment and Production

The foreign investment policies of Belgium have been dominated by the need for a smaller economic power to adjust to membership of the European Economic Community and by the desire for substantial growth in the industrial sector with special emphasis on regional development in the Walloon south. In the 1960s, foreign investment expanded rapidly particularly in the Flemish north. This is partly a reflection of the accessibility of Belgium to other EEC countries and of the generous tax concessions introduced in the Economic Expansion Acts of 1959 and 1970 designed primarily to promote growth. The stock of inward direct investment in Belgium has been estimated at US $ 9.6 billion dollars in 1978 which is approximately twice as high as the stock of Belgian outward direct investment. As a proportion of gross fixed capital formation, the flow of direct investment varied between 5 and 8.5% from 1967 onwards. An estimated 38% of employment in Belgian manufacturing was in foreign-owned firms in 1978 compared with 18% in 1968.

The 1981 biennial survey of the National Bank of Austria on foreign direct investment covered 1,754 Austrian companies with foreign participation and a nominal capital of at least A Sch 1 million. This coverage represents an estimated 80–90% of total foreign direct investment in Austria. 36% of these Austrian companies with foreign participation were responsible for 1,814 establishments engaged in manufacturing activities employing a total of 160,000 workers. 64% of these Austrian companies with foreign participation were responsible for 3,594 establishments engaged in non-manufacturing activities employing a total of 87,000 workers. The National Bank of Austria measures the degree of foreign penetration according to the share of employment accounted for by foreign affiliates. In 1981, the overall figure was 12%, representing 26% in manufacturing and 6% elsewhere. Public joint-stock (AG) and private limited (GmbH) companies comprised 83% of the companies surveyed with partnerships of one kind or another accounting for the remainde. Foreign majority holdings represented 85% of the companies surveyed and accounted for 77% of the total employees of direct foreign investors surveyed, or 7% of the total working force in Austria.

Canada is better known as a host country to, rather than as a source of, foreign investment. Foreign direct investment accounted for more than 50% of long-term capital inflows between the mid-fifties and mid-seventies but has since assumed a significantly lower share, and stood at 44% of these inflows at the end of 1981. At the end of 1981, companies whose equity was controlled abroad accounted for 50% of the capital in Canadian manufacturing, 44% in petroleum and natural gas, 46% in other mining and smelting and 26% of all industries outside of agriculture and finance. The United States continues to account for by far the largest portion of foreign ownership in Canada with a share of just under 80%.

Until the mid 1970s, Australia was mainly a host country to foreign direct investment, but as Australian firms have evolved their own competitive advantages, particularly in natural resource sectors, outward investment has begun to grow. At the same time, partly as a result of recent government policy, there has been a gradual indigenisation (or naturalisation) of foreign sudsidiaries in Australia; since 1983, domestic equity participation has been actively encouraged. In 1976, a Foreign Investment Review Board (FIRB) was set up, the task of which is to evaluate and monitor major inward investment proposals. In 1983, about one quarter of inward investment was directed to the primary sector, most of this being in mining. Services, notably distribution, finance and banking accounted for two fifths. Most direct investment originates from the USA, the UK and Japan, but inflows from the USA have been falling during the 1980s, while those from Japan and the UK have been rising. During the 1980s, the UK has been the leading source of portfolio investment, followed by Japan and the USA. In 1983, Australian companies owned direct investment assets abroad worth A S 3.4 billion, the leading recipient countries being the USA, New Zealand, Papua New Guinea and the ASEAN countries.

The inflow of foreign direct investment to Botswana has fluctuated annually since the mid 1970s; reinvested earnings have been negative throughout this period, as indicated by Table A3.

There are no regular published data or estimates of foreign direct investment in Bangladesh. Existing US investment consists of three pharmaceutical factories, a sewing machine factory, a plastic pipe plant, a commercial bank, a life insurance company, and storage and processing facilities for edible oil. There is also investment in office and transport equipment of about 10 American service sector firms. Investment from the UK exceeds that from other countries with Dutch investment roughly equal to American, and Japanese and Korean following closely. There is also some inward investment from Thailand, India and Singapore.

Fiji is a modern host country for foreign direct investment, with effectively no outward investment. The penetration by foreign companies has slightly declined in recent years due to a slow down of new foreign investment and a trend of ‘buy-outs’ by European nationals. The main foreign investor is Australia, with New Zealand, the UK, the USA and Japan also being of importance. Nearly 70% of all inward investment is in the tertiary sector but there are also substantial foreign interests in fishing, mining and forestry. There is some anxiety about dependence on Australia, and a wish not to become as reliant on foreign owned firms as Canada, but generally foreign investment has been well received and considered beneficial. Joint ventures between foreign and local investors are encouraged; only in the sugar industry is no foreign participation allowed.

Although there appears to be no official policy towards inward direct investment, Argentina’s foreign investment laws are very liberal. However, despite this attraction, recent economic and political uncertainties have resulted in a significant decline in new inflows of foreign capital. Reinvested earnings retain an important role in foreign investment in Argentina.

There is little information about the investment position of Saudi Arabia; official foreign investment statistics are unavailable. The flows of inward investment to Saudi Arabia fluctuated widely until 1981; since then there has been a sustained and substantial inflow of new investment.