Revoltion

1.0 Introduction.

This paper in its capacity will compare the current foreign direct investment (FDI) responses and trends after recession with FDI responses to past years before economic recession hits. We have analyzed and found that although developed country inflows have taken a big hit but in major developed countries inflows seem to be bouncing back surely but though slowly. By contrast with the overall decline in recent years, inflows to emerging markets often remained stable during the past economic crises. Both patterns indicate that the global scale of the current crisis has led to a greater FDI response than after individual country crises in the past. Compared with global economic downturns since the 1970s, the current FDI recession has also been greater in magnitude. The exception is the FDI plunge in the early 2000s, despite the much smaller economic crisis at the time. We have concluded by recommending that policymakers not just further liberalize FDI regimes—as they find was the typical pattern during earlier crises—but rather use the downturn to rethink their FDI policies with an enhanced focus on “sustainable FDI” promotion. Before we start analyzing the facts, let us understand some basic facts about FDI .In technical terms a business transaction or transactions which lead to acquiring of 10 percent or more of equivalent of voter stock in an enterprise operating in an economy other than that of the investor country of operations can be said be an example of international factor movement and is commonly termed as Foreign Direct investment or FDI. It can be defined as sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative) and "stock of foreign direct investment", which is the cumulative number for a given period....