Kazakhstan was the leader among global landlocked developing countries (LLDCs) for foreign direct investment (FDI) last year, attracting a total of $6.1bn, according to the World Investment Report 2023 released by UNCTAD on July 5. 

The majority of investment flows remained concentrated in a small number of the 32 economies, with the top five LLDC recipients accounting for 83% of the total FDI received by the group, UNCTAD said. The leading countries in terms of FDI were Kazakhstan, Ethiopia, Uzbekistan, Mongolia and Uganda. 

LLDCs in Africa, Asia and Europe observed an increase in investment inflows, while those in Latin America and the Caribbean experienced a decline.

Among the LLDCs in developing Asia, Kazakhstan experienced an 83% surge in FDI to $6.1bn. Although equity flows decreased, reinvested earnings reached an all-time high of $10bn, bolstered by substantial profits in extractive industries.

Uzbekistan recorded a record high of $2.5bn in FDI, largely attributed to a doubling of reinvested earnings to $1.2bn. On the other hand, FDI flows to Azerbaijan turned negative, falling to -$4.5bn, due to dividend payments in the extractive industries.

Elsewhere in the world, Ethiopia maintained its position as the second-largest recipient among LLDCs, despite a decrease in inflows. FDI in Uganda saw a significant rise of 39%, totalling $1.5bn, mainly attributed to major projects in extractive industries.

In Latin America flows to Bolivia turned negative once again, falling to -$26mn, primarily due to exceptional dividend payments in the hydrocarbon sector. Conversely, Paraguay witnessed more than a twofold increase in flows to $474mn, driven by investment growth in various economic sectors.

FDI to LLDCs primarily originated from a few key investor countries. China emerged as the largest investor, contributing a significant $20bn in 2021, including $7.5bn in Kazakhstan alone. Thailand, Canada and the Netherlands followed as the next biggest investors in LLDCs.

The report also indicated a significant increase in the number of greenfield project announcements by LLDCs as a group, which reached $31bn. This growth was particularly noticeable in the extractive industries sector.

In contrast, the number of international project finance deals declined by 19% compared to 2021, and the value plummeted by 72% to $19bn. While the majority of projects focused on renewables, there were also announcements in the power, mining and industrial real estate sectors.