1. 1 FDI Confidence Index ® 2003 FDI Confidence Index ® The Global Business Policy Council Press Slides September 2003

2. 2 FDI Confidence Index ® The Global Business Policy Council Global FDI Flows (US$ billions) Source: UNCTAD $1.4 trillion $824 billion $651 billion 21% 41% Global FDI flows have fallen below 1998 levels

3. 3 FDI Confidence Index ® The Global Business Policy Council 2001-2002 Industrialized countries -22% Emerging/Transitioning markets -19% Global FDI Flows (US$ billions) Source: UNCTAD Advanced countries have experienced the sharpest drop in FDI inflows

4. 4 FDI Confidence Index ® The Global Business Policy Council Share of Global FDI to Emerging/Transitioning Markets Share of Global FDI to Developed Countries % of Global FDI Flows Source: UNCTAD Industrialized vs. developing markets

5. 5 China United States Mexico Poland Germany India United Kingdom Russia Brazil Spain France Italy Czech Republic Canada Japan Thailand Hungary South Korea Australia Taiwan Vietnam Hong Kong Malaysia Turkey Indonesia 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (1) (2) (9) (11) (4) (15) (3) (17) (13) (7) (5) (6) (14) (8) (12) (20) (16) (21) (10) (24) (33) (18) (42) (29) (31) Low Confidence High Confidence ( )= 2002 Values Calculated on a 0 to 3 Scale FDI Confidence Index ® The Global Business Policy Council Source: A.T. Kearney FDI Confidence Index 2003, top 25 Most attractive FDI destinations 2003

6. 6 June 1999 January 2000 February 2001 October 2001* September 2003 *Post-September 11 FDI Flash Survey Percentage change in outlook compared to a year ago Source: A.T. Kearney Positive change in outlook Negative change in outlook September 2002 FDI Confidence Index ® The Global Business Policy Council Investor outlook on the global economy

7. 7 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Global developments most likely to influence FDI decisions

8. 8 Percentage Growth Percentage of investors who prefer M&A Source: A.T. Kearney, KPMG, UNCTAD FDI Confidence Index ® The Global Business Policy Council Investor Preference for M&A as FDI mode of entry

9. 9 Percentage of global investors with Planned Investment Increases/Decreases Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Planned Investment Increases/Decreases

10. 10 Source: A.T. Kearney More attractive * Less attractive Maintained ranking * More/less attractive based on moving up/down in the Index FDI Confidence Index ® The Global Business Policy Council Global investors are more attracted to selected emerging markets

11. 11 North America Africa, Near and Middle East EuropeAsia Pacific Latin America Regional share of total planned first-time investments Source: A.T. Kearney Russia Turkey Brazil Poland China Mexico Rest of Eastern Europe Rest of Asia- Pacific Rest of region Vietnam Western Europe India FDI Confidence Index ® The Global Business Policy Council Emerging markets will likely gain a greater share of first-time investments

12. 12 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Allocation of selected offshore activities Services will likely dominate corporate off-shoring activities over the next three years

13. 13 Percentage difference in FDI Index score between the U.S. and China Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council U.S. vs. China investment attractiveness

14. 14 Source: A.T. Kearney (Percentage of total respondents) FDI Confidence Index ® The Global Business Policy Council Factors most likely to impact the attractiveness of the U.S. market over the next one to three years

15. 15 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Rest of Eastern Europe Poland Russia Slovenia, Romania, the Baltic States, Croatia, and Serbia Global allocation of first-time investments 10% 9% 5% 8% The Eastern European “little tigers” are expected to gain significant first-time investments

16. 16 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council China United States Mexico Brazil Germany India Poland Russia Thailand Japan 1 2 3 4 5 6 7 8 9 10 Top 10 most attractive investment destinations for Heavy Manufacturing sector, 2003 Least Attractive Highly Attractive FDI Index Score June 1999 Jan 2000 Feb 2001 Sept 2002 Sept 2003 Heavy Manufacturing sector (1) (2) (5) (7) (3) (8) (11) (16) (17) (13) () = 2002 China’s lead notwithstanding, Mexico and Brazil score well with heavy manufacturing investors

17. 17 Least Attractive Global Investors Highly Attractive Jan 2000 Feb 2001 Sept 2002 Dec 1998 June 1999 FDI Index Score FDI Confidence Index ® The Global Business Policy Council Source: A.T. Kearney Sept 2003 Latin America falls behind Asia Asia surpasses Europe Asia has overtaken both Latin America and Europe as a regional FDI destination

18. 18 Percentage likelihood of investing in China over these other markets (percentage difference in FDI Index scores) Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council China’s lead over most emerging market destinations has strengthened

19. 19 FDI Confidence Index ® The Global Business Policy Council Source: A.T. Kearney Jan 2000 Feb 2001 Sept 2002 Dec 1998 June 1999 Sept 2003 China less attractive China more attractive China’s relative attractiveness against developed countries (difference in FDI Index scores) China has also made advances against major developed countries

20. 20 FDI Confidence Index ® The Global Business Policy Council Source: A.T. Kearney, WTO World Trade Report 2003 FDI Confidence Index 2003, Asian Investors 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 (1) (2) (4) (14) (3) (15) (32) (5) (8) (6) (13) (11) (16) (9) (7) (10) (18) ( )= 2002 Low confidence High confidence Intra-developing Asia’s share of global trade (ex-Japan) Percentage share of global trade 19902001 Asian investors are most optimistic on the global economy Regional economic dynamism fuels Asian investor bullishness

21. 21 Source: A.T. Kearney The Emerging Giants receive a large share of FDI flowing to the developing world 2002 Market Size Market Growth/Potential Production/Labor Costs Access to Export Markets Competitor Presence Availability of M&A Targets Financial/Economic Stability Political/Social Stability Tax Regime Infrastructure Transparency Highly Educated Workforce Quality of Life Thirteen attributes influencing FDI decisions were benchmarked across these markets FDI Confidence Index ® The Global Business Policy Council The Emerging Giants – China, Brazil, Mexico, India, and Poland

22. 22 Source: A.T. Kearney Relative attractiveness of various markets for selected attributes (weighted score of country rankings) FDI Confidence Index ® The Global Business Policy Council China displays a comparative advantage across most FDI attractiveness attributes

23. 23 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Relative attractiveness of various markets for selected attributes (weighted score of country rankings) Poland takes second position behind China

24. 24 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Relative attractiveness of various markets for selected attributes (weighted score of country rankings) India’s comparative advantage lies in market growth, costs, and education

25. 25 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Relative attractiveness of various markets for selected attributes (weighted score of country rankings) Yet, India displays weakness in several key categories

26. 26 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Relative attractiveness of various markets for selected attributes (weighted score of country rankings) Mexico and Brazil are less competitive in terms of education and production/labor costs as FDI destinations

27. 27 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Relative attractiveness of various markets for selected attributes (weighted score of country rankings) Mexico and Brazil are recognized for attractive infrastructures, transparency, and access to export markets

28. 28 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Relative attractiveness of various markets for selected attributes (weighted score of country rankings) Relative stability among big emerging markets

29. 29 Source: A.T. Kearney Percentage of global investors that ranked countries for High, Medium, and Low Risk China Brazil India MexicoPoland FDI Confidence Index ® The Global Business Policy Council Relative risk profiles among big emerging markets

30. 30 Source: A.T. Kearney If invested, are profitability targets met? FDI Confidence Index ® The Global Business Policy Council Meeting profitability targets?

31. 31 Source: A.T. Kearney (Percentage among top five) FDI Confidence Index ® The Global Business Policy Council The most critical risks to firm operations

32. 32 Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council Risk management actions

33. 33 Profile of FDI Confidence Index participants 22% 50% 25% 3% 29% 71% 9% 16% 11% Geographical Distribution Respondent Titles 5% Sectoral Distribution 5% 4% 20% 30% North America Europe Asia Other Financial and Non- financial Services Wholesale and Retail Telecom and Utilities Light Manufacturing Heavy Manufacturing Primary CEOs, CFOs and Board Members Senior Strategy and Development Executives Int’l Operations Executives Other Source: A.T. Kearney FDI Confidence Index ® The Global Business Policy Council