By admin 
In early 2026, Foreign Direct Investment (FDI) in developing countries is marked by a “Great Concentration.” According to UNCTAD’s January 2026 report, global FDI rose by 14% in 2025, but this growth was heavily skewed toward developed economies. In contrast, developing nations saw a 2% decline in total inflows (to roughly $877 billion).
The 2026 landscape is defined by investors moving away from “low-cost labor” toward “capital-intensive technology” and “geopolitical safety.”
1. The Regional Divide (2025–2026)
| Region | FDI Trend | Primary Driver |
| Southeast Asia | Resilient (+10%) | The “China Plus One” strategy; Vietnam, Malaysia, and Indonesia are top hubs for semiconductor and EV supply chains. |
| Africa | Surging (+75% in some zones) | Driven by mega-infrastructure projects like Egypt’s Ras El-Hekma and green energy investments in Eastern and Southern Africa. |
| Latin America | Declining (-12%) | Despite growth in Brazil and Mexico’s greenfield projects, overall flows are struggling with commodity price volatility. |
| Least Developed (LDCs) | Stagnant/Declining | 75% of LDCs saw declining flows in 2025 due to risk perception and high debt-servicing costs. |
2. Key 2026 FDI “Hotspots”
Investors in 2026 are targeting specific sectors that offer resilience against trade wars and climate change:
- Data Centers & AI Infrastructure: This is the breakout sector of 2026. Data centers accounted for over 20% of global greenfield projects in 2025. Emerging markets like Brazil, India, Thailand, and Malaysia have become major recipients as firms seek “data sovereignty” and localized AI processing.
- Critical Minerals: There is a “gold rush” for lithium, cobalt, and rare earths. Countries that move beyond extraction to downstream processing (like Indonesia with its nickel refineries) are capturing much higher-value FDI.
- Green Hydrogen & Renewables: While international infrastructure deals fell 10% recently, renewable energy FDI in Africa and Central Asia (Uzbekistan/Kazakhstan) remains a high-growth area, driven by the EU’s need for clean energy imports.
3. Structural Shifts: The “Risk-Adjusted” Era
By February 2026, the logic of FDI has fundamentally changed:
- From Efficiency to Security: Proximity to markets and political stability are now more important than low labor costs. “Friend-shoring” is the dominant strategy for 2026.
- The “Pollution Haven” Pushback: Developing nations are increasingly rejecting “dirty” FDI. New 2026 policies in countries like Vietnam and India prioritize “Technological Leapfrogging,” where they skip polluting industrial phases to adopt advanced, clean tech immediately.
- Domestic Displacement: In many developing regions, domestic investors are filling the gaps left by international project finance, particularly in renewable energy and local infrastructure.
4. 2026 FDI Outlook by Country
| Country | 2026 Forecast (USD) | Strategic Role |
| Vietnam | ~$26.7 Billion | The global alternative for electronics manufacturing. |
| Brazil | ~$21.0 Billion | Leader in Latin American digital infrastructure and data centers. |
| India | ~$4.5 Trillion (GDP Scale) | Third-largest global recipient of greenfield projects. |
| Egypt | Record Highs | The gateway for renewable energy and urban development in the MENA region. |
2026 Peer Insight: We are seeing the “Death of the Generalist Investor.” In 2026, capital is no longer just “flowing to emerging markets”; it is flowing to very specific policy-aligned clusters. If a country doesn’t have a clear “AI Strategy” or “Green Energy Roadmap,” it is being left out of the 2026 investment cycle.