U.N.: Investments surge in industrialised nations

Investment overseas by the world's business giants surged 39 percent to a record $640 billion last year and will probably set another high this year, according to a United Nations report released on Tuesday.

Investment overseas by the world’s business giants surged 39 percent to a record $640 billion last year and will probably set another high this year, according to a United Nations report released on Tuesday.

Overall, global investment flows “will exceed easily $700 billion” and could top $800 billion in 1999, said the U.N. Conference on Trade and Development.

“Basically, what took place last year was an enormous rise in foreign direct investment between the United States, Europe and Japan,” Rubens Ricupero, secretary-general of UNCTAD, said of the agency’s 541-page World Investment Report.

Those money transfers by the U.S., the European Union and Japan accounted for 90 percent of all foreign investment, according to the report.

Investments going abroad from Switzerland increased by $700 million to total $17.4 billion. However, investments flowing into Switzerland dropped by $1.2 billion in 1998 to $3.7 billion.

The world’s top-100 companies account for about 15 percent of all foreign investment. Switzerland’s biggest multinational company, the food giant Nestlé, holds ninth place on that list, employing 220,000 abroad.

Swiss-based engineering giant ABB and pharmaceuticals concern Roche are in 14th and 20th position respectively on the top-100 list.

Much of the new investment took the form of ever-larger mergers and acquisitions across the North Atlantic.

According to a new poll, most Swiss see the growing trend of mergers and economic globalisation as an irreversible fact.

The poll, which was commissioned by Switzerland’s Credit Suisse banking group, says that 55 percent of those questioned believe that most mergers are decided in order to boost short-term stock market profits.

Switzerland will only be able to survive in the global economy if there is continuous investment in education as well as science and research, the poll says.

It warns politicians that they may be overwhelmed by the dynamics of a global economy unless they take action and implement swift reforms.

One course of action would be to improve relations between cantons to make economic, political and social cooperation more efficient.

From staff and wire reports.