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WASHINGTON, D.C., Jan. 30 -- Private investment in developing countries sets new records in 1994 as the level of state-generated investment fell once again, the International Finance Corporation (IFC) reported. As recently as a decade ago, the private sector was the source of only about half of all fixed investment spending in developing countries. By 1994, however, the last year for which data are available, private sector investment had risen to more than three quarters of the total. These and other trends appear in the seventh annual edition of Trends in Private Investment in Developing Countries, a unique data source compiled by IFC's economics department. According to the report, the share of private investment in developing counties reached levels in 1994 that have not been achieved in decades, when it amounted to 18 percent of the combined GDP, fully two percentage points above the 1992 level (figures are weighted to reflect varying sizes of the economies). Strong increases are reported in Argentina, Brazil, Indonesia, and Turkey, as well as smaller economies such as Cote d'Ivoire, Egypt, El Salvador, Madagascar, Mali, Nepal, Peru, and Sri Lanka. Unweighted, the average ratio of private investment to GDP reached 13.2 percent overall, roughly the same as 1993. But in more than half the countries, mostly smaller ones in sub-Saharan Africa and Latin America, private investment remained stable or declined. Developing countries tend to be importers of international capital resources since their real investment needs are typically large and generally exceed their level of domestic savings. During the 1990s, external sources of long-term capital financed a rising portion of total private investment in developing countries. But by 1994, foreign capital flows still amounted only to about 10 percent of total private investment in these nations. (more) Press Release No. 96/74, page 2 of 2 In addition to presenting the latest statistics, the report charts international financing flows, and expands and updates analysis of the determinants of private investment. IFC is a member of the World Bank Group created in 1956 to encourage the growth of a healthy private sector in developing nations. It does so by financing business in partnership with private investors, and by fostering conditions that stimulate investment such as domestic financial institutions and capital markets.
Copies of the report may be obtained from the World Bank Bookstore (tel. (202) 473-2941). Press copies can be obtained by calling Roderick Garnett at tel. (202) 473-3397.
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