October 05, 2007	Friday	Ramazan 22, 1428

GENEVA, Oct 4: Multinational companies believe their foreign investment will continue to grow over the next three years despite fears about financial instability, according to a UN survey released on Thursday.

About two-thirds of the 192 trans-national corporations covered by the UN Conference on Trade and Development (Unctad) survey said they planned to increase their foreign direct investment (FDI) each year from 2007 to 2009.

About one-fifth to a quarter said they saw no change in their investment flows over the coming years.

The largest proportion -- 87 per cent -- rated financial instability as an important or very important threat to foreign investment flows, alongside wars and political instability, the survey found.

Concerns about possible changes in investment rules (85 per cent) or a global economic downturn (77 per cent) came lower down the scale.

The survey was carried out in March to June, before financial markets were rocked by two months of turmoil linked to the failing US sub-prime home loan market.

UNCTAD said easy access to sizeable or growing local or regional markets were the main drivers for investment choices.

Among regions, South and South East Asia was expected to remain the most popular investment choice for multinationals, ahead of the United States and the European Union, according to the survey.

However, a breakdown by country revealed a more complex picture, with China (52 per cent) and India (41 per cent) leading the fray, followed by the United States (35 per cent), Russia (21 per cent) and Brazil (13 per cent).

“What is interesting is the position of newcomers, like Vietnam in sixth or Poland in the top ten -- this seems to be a new trend in terms of preferred locations,” Unctad economist Jean-Francois Outreville told journalists.—AFP