Costa Rica, North Macedonia and the UAE were the world’s best foreign direct investment (FDI) performers relative to the size of their economies in 2022. 

In the eighth edition of fDi Intelligence’s Greenfield FDI Performance Index, Costa Rica retained its position as the country that attracts the most FDI relative to its gross domestic product (GDP), thus fortifying the attractiveness of its investment proposition in the wake of the Covid-19 pandemic and the war in Ukraine. North Macedonia and the UAE switched places from 2021, ranking second and third in 2022 respectively. 

Four other countries, Serbia, Lithuania, Malta and Singapore, retained their spots in the top 10. 

The top 10 features four countries, North Macedonia, Georgia, Armenia and Malta, with a 2022 (GDP) under $25bn, illustrating the growing ability of emerging economies to target and attract FDI projects and compete with larger economies. 

The UAE and Singapore remain the two major business hubs whose market share of FDI projects outweigh their GDP market share. 

Of the 95 countries recording more than 10 FDI projects in 2022 and hence being considered for the 2022 index, 76 have an index score greater than 1.0, indicating a larger share of investment projects relative to their share of GDP. The remaining 19 have a score below 1.0, indicating a smaller share of projects relative to GDP. 

For example, Costa Rica’s 2022 score stands at 12.7, which means that, given the size of its economy, it attracts 12.7 times more projects than the size of its GDP would suggest.  

Georgia recorded the highest rise in project numbers relative to its 2022 GDP, with the country quadrupling its number of projects from eight to 32, having seen its GDP increase from $19bn in 2021 to $25bn in 2022. The UAE saw the second highest rise in project numbers relative to GDP, with the country’s project total rising from 541 in 2021 to 1000 in 2022. 

Highest climbers 

This year Macau and Egypt recorded the joint highest rank change, climbing 29 places each to 52nd and 73rd position, respectively. In total, six countries climbed more than 20 places, with the Philippines rising 23 places, India 22, Georgia 20 and the Dominican Republic 20. African countries claimed nine places in the top 20 highest risers, with four of those in the top 10. Egypt doubled its index score from 0.96 in 2021 to 1.92 in 2022, meaning it doubled its project share relative to its GDP, with the renewables sector accounting for a sixth of its projects in 2022. 

Russia lies at the bottom of the index as the lowest-scoring country. Its inbound FDI has all but halted while it wages war in Ukraine, registering an index score of 0.04. China (0.1) ranks second to bottom in 2022, recording 125 fewer projects than in 2021. 

Asia-Pacific dominates the top 10 worst performers list with seven countries. The majority of these are the typically wealthier countries with high GDPs and a below market share of investment projects.

Regional overview

Emerging Europe

Emerging Europe saw North Macedonia retain its position as the top performer, with Serbia in second place and Lithuania in third after swapping places from 2021. Armenia with 6.9 rose the most places in Emerging Europe in this year’s index, by 12 places. 

The region recorded a slight decrease of 43 FDI projects from 2021; however, standout performer Serbia which saw its score rise by more than three points. All countries within Emerging Europe, besides Russia, recorded a score of above 1.0.

Africa

This year welcomes four new African entrants to the 2022 index, taking the total number of African countries that appear on the index to 13 (only countries with 10 or more FDI projects in the full year are considered). This represents the largest African representation we’ve had in the FDI Greenfield Index, a show of strength from the ever-growing continent. Of the 13 included, 10 witnessed an increase in score, of which Namibia (4.6), Kenya (3.3) and Senegal (2.9) recorded the largest. 

Asia-Pacific

Asia-Pacific experienced an increase in inbound project numbers of 871, of which India accounted for 549. Asia-Pacific accounted for 23 countries on the list, of which standout performers were two new entrants to the index Georgia (7.3) and Armenia (6.9). The new entrants knocked last year’s regional winner Singapore (4.9) into third place. 

Western Europe

This year’s index for Western Europe saw Portugal (6.2) rise from third to first place, with Malta (5.4) and Ireland (3.5) falling one place each. The region received more than 6100 projects in 2022, more than any other region and accounting for 35% of the projects counted for this index.

Middle East

The Middle East region’s index was dominated by the UAE (11.1), whose score rose by 2.9 points from 2021. The region welcomed two new entrants in Jordan (1.3) and Iraq (0.2). Bahrain (3.9), Oman (2.5), Israel (0.8) and Kuwait (0.4) saw their scores fall, with Bahrain falling from second to third place in the region. 

North America

Canada (1.0) outperformed the US (0.5) despite a slight decrease in its index score with both countries’ GDP market share outweighing their investment project market share. The US recorded a 23% increase in the number of projects recorded, reaching a high of 2080. 

Latin America

Costa Rica (12.7) topped the FDI index globally and in Latin America for a second year in a row, Colombia (2.5) ranked second and Uruguay (2.0) placed third. The Dominican Republic (1.5) has climbed in the rankings from 10th place in 2021 to fifth in 2022. 

This article first appeared in the June/July 2023 print edition of fDi Intelligence