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The Investment Map Is Being Redrawn

  • Writer: Aişe Gül Akkoyun
    Aişe Gül Akkoyun
  • Nov 7, 2025
  • 3 min read

Updated: Aug 5

What UNCTAD's 2025 numbers say about where global capital is actually going.



Background

UNCTAD's World Investment Report 2025, released in June 2025, recorded a second consecutive year of decline in global foreign direct investment. The headline figure — a fall of roughly 11 percent net of the distortion caused by volatile financial-conduit flows through a handful of European economies — sits behind a much more uneven regional picture than the aggregate number suggests.

A very unequal decline

Developed economies as a group saw FDI drop by 22 percent, with Europe absorbing the brunt of that fall at a 58 percent plunge. North America moved in the opposite direction, posting a 23 percent increase led by the United States. Among developing economies, Asia held its position as the largest recipient region despite a modest 3 percent dip, while Southeast Asia specifically rose 10 percent to reach $225 billion, its second-highest level on record. Africa's headline 75 percent increase turns out to be driven overwhelmingly by a single large project in Egypt; strip that out and the regional rise is a more modest but still real 12 percent, which UNCTAD attributes partly to investment facilitation and regulatory reform underway across the continent.

Where the money is actually going

The sectoral split is at least as informative as the regional one. Investment in SDG-relevant sectors — renewable energy, water, and sanitation — fell by between 25 and 33 percent, a contraction that sits uncomfortably alongside the parallel narrative, discussed elsewhere in this archive, of a growing wave of energy-transition arbitration claims. Digital-sector investment moved the other way, with project values roughly doubling and becoming, on UNCTAD's account, the primary engine of whatever FDI growth exists globally.

Why this matters for dispute data, not just policy

For anyone building datasets on investment disputes, aggregate FDI trends are a useful denominator. A rise in energy-transition or critical-minerals arbitration claims, set against a backdrop of falling SDG-sector investment, reads differently than the same rise would against a backdrop of rising investment in the same sectors: it suggests disputes are growing even as new capital commitments shrink, which is consistent with a maturing, more contested stock of existing projects rather than a straightforward boom.

Regionally, the divergence between Europe's steep decline and North America's rise is also a variable worth tracking against dispute filings by respondent region over the same period — particularly given the wave of European treaty withdrawals (Italy since 2016, and more recently a coordinated EU exit from the Energy Charter Treaty) discussed elsewhere in this archive.

What would be worth measuring

  • Whether the fall in SDG-sector FDI correlates, with a lag, with a rise in disputes over stalled or cancelled renewable and infrastructure projects

  • Whether declining European FDI is itself partly a consequence of treaty-withdrawal-driven uncertainty, or a cause of the political appetite for withdrawal

  • Whether the near-doubling of digital-sector investment produces a comparable rise in Law & Technology-adjacent disputes over the following several years

  • Whether Africa's ex-Egypt 12 percent rise is broad-based or concentrated in a small number of jurisdictions with active investment-facilitation reforms

The open question

Aggregate FDI figures are frequently used to argue, in one direction or the other, that the investment treaty system is either working or failing. The 2025 numbers do not really support either simple story. They show capital reallocating sharply by sector and region rather than uniformly retreating — which means the more useful research question is not whether global investment is rising or falling, but which specific combinations of sector and geography are absorbing the decline, and whether those are the same combinations generating the dispute caseload.


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