The IMF called the amount of the fictitious investment in the world

МВФ назвал объем фиктивных инвестиций в мире

Fictitious investments account for nearly 40% of global foreign direct investment.

About $15 trillion of foreign direct investment (FDI) in the world are bogus. Their sum is comparable to the total annual GDP of China and Germany. This is stated in a joint study of the IMF and the University of Copenhagen.

Provided that illegitimate FDI represents nearly 40% of the total world volume of direct investment. This amount increased by 10% in less than a decade.

As noted in the study, a significant portion of the dummy FDI is concentrated in known tax havens: Luxembourg, the Netherlands (in these two countries, nearly half of the amount of bogus PPI), Hong Kong, the British virgin Islands, Bermuda, Cayman Islands, Switzerland, Ireland and Mauritius.

For the most part fictitious the concentration of FDI in these places due to deliberate political strategy, which is attracting an increasing amount of foreign investment, in particular, due to zero or very low rate of corporate tax, experts say.

As an example the authors give in Luxembourg, with a population of 600 thousand people. In this country per capita, according to statistics, account for 6.6 million dollars of direct foreign investment (in General, this is 4 trillion dollars a year). This is the same as has investment in the United States, and more than China.

Thus, the volume of such investments does not affect the level of welfare of the population.

As the researchers note, despite the fact that the main part of the dummy FDI is concentrated in a few countries, this phenomenon is typical for all economies. Many countries are investing in the company’s dummy abroad and receive from them a significant investment.

Recall from the beginning of 2019, the share of foreign investments in the state debt of Ukraine grew by 11 times. The national Bank said that this is due to the strengthening of the hryvnia.

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