According to initial estimates by the United Nations Conference on Trade and Development (Unctad), global foreign direct investment (FDI) rose 25% in 1999, totalling USD 827 billion, as against 660 billion in 1998. These figures have been constantly on the rise for the past decade, the 1998 figure showing a 41% rise over the previous year (USD 468 billion in 1997). The increases are essentially due to international mergers and acquisitions, especially in the developing countries, explains Unctad. In terms of regions, the study presents the following details. a) Developing countries: FDI flows to these countries rose 15% in 1999 to USD 198 billion, after stagnating in 1998. In greater detail: i) Latin America: privatisations played an important role in 1999, attracting 32% more investment than in 1998, i.e. USD 97 billion. For the first time, the Latin Amerian and Caribbean countries surpassed the developing Asian countries as the leading destination in the developing world. Around USD 31 billion went to Brazil, the leading host country in the region for the third consecutive year, followed by Argentina, which showed significant increases in FDI flows in 1999. ii) Developing countries in Asia (including Western Asia). This region attracted USD 91 billion in FDI, of which 40 billion in China alone. The Republic of Korea posted a 55% increase to USD 8.5 billion, essentially through mergers and acquisitions. iii) Africa: this continent attracted USD 11 billion in investments last year. Morocco and South Africa had particularly large increases in FDI flows, an estimated USD 2 billion for Morocco and 1.3 billion for South Africa. b) Developed nations: According to initial estimates, FDI flows to these countries totalled USD 609 billion, which represents nearly three fourths of the world total. While the United States and the United Kingdom still lead the way, in 1999 the United Kingdom replaced the United States as the world's largest investor for the first since 1988, with the US ranking second. These two countries also represent, for each other, the principal home country as well as host country. Other developed countries showing high levels of FDI flows were France and Germany (both inflows and outflows), the Netherlands (inflows), Spain (outflows) and Sweden (inflows). The latter now ranks second worldwide among host countries. Total flows between the European Union and the United States rose considerably in 1999 after doubling in 1998. FDI inflows to the EU as a region were estimated at USD 269 billion, up 14% over the preceding year. Unctad also points out that Japan had almost a quintupling of FDI inflows, from USD 3 billion in 1998 to around 14 billion in 1999, essentially owing to mergers and acquisitions. Japanese investments abroad declined slightly, shrinking from USD 24 billion in 1998 to 23 billion in 1999. c) Eastern and Central European countries in transition: these countries attracted USD 20 billion in FDI in 1999, a releatively stable amount compared to 1998. Contact: Masataka Fujita, Division de l'investissement, de la technologie et du développement des entreprises, Cnuced. Tel: (41-22) 907 6217, fax: 907 01 94, e-mail: masataka.fujita@unctad.org.