Too much foreign investment too fast

Amy Scott May 30, 2006
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Too much foreign investment too fast

Amy Scott May 30, 2006
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TEXT OF STORY

SCOTT JAGOW: Last couple weeks we’ve been telling you how investors have been yanking money out of emerging markets like Russia and Brazil. One of the main reasons is that they’ve put so much money in. Maybe too much too fast. A World Bank report out today says last year developing countries were swamped with a record $491billion in investment. Marketplace’s Amy Scott has more.

AMY SCOTT: Robust economic growth, higher commodity prices and relatively low interest rates boosted investment in emerging markets, the report says. The World Bank’s Monsoor Dailami says a little housekeeping also paid off.

MONSOOR DAILAMI: Developing countries have taken major steps in improving their domestic policy environment, and international investors obviously have responded.

And not just investors from wealthy nations.

DAILAMI: Developing countries themselves are becoming an important source of financing to other developing countries. And this is quite a new trend.

But overall, the bulk of investment went to just a handful of countries, like China, Mexico and Russia. The report says more impoverished countries still have little or no access to private foreign investment.

In New York, I’m Amy Scott for Marketplace.

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