CANBERRA: Australia has dropped to tenth position in an annual survey ranking countries as potential targets for direct foreign investment.
The AT Kearney FDI Confidence Index showed the US and China maintained the top two positions in 2015, while Australia fell from eighth last year and a ranking of sixth in 2013. In the past few years the country has been overtaken by France, Japan and Mexico.
The index, based on surveyed senior executives globally, found that 66 per cent of companies plan to return to their pre-financial crisis levels of foreign direct investment by 2016, with Asian investors showing the strongest commitment.
AT Kearney Australia partner Nigel Andrade said the nation attracted about $50 billion in inflows in 2014 and the outlook for the coming year was assisted by recently completed negotiations for bilateral trade deals with China, South Korea and Japan.
But the consulting firm warned Australia needed to take positive steps to lift its engagement with Asia, including overcoming internal biases and reframing a resource-centric view of opportunities in the region.
“Asia is now becoming the largest exporter of capital, and developed markets are the largest importers,” Mr Andrade said.
“Given Australia’s proximity to Asia and status as a leading developed market in the region, this should herald growth, but the downward trend in rankings may indicate otherwise.”
