News Americas, NEW YORK, NY, – Foreign direct investment in Latin American and the Caribbean could grow by as much as 25 percent this year.
That’s the word from the United Nation’s Economic Commission for Latin America and the Caribbean, (ECLAC).
“We think foreign direct investment can hit an historic record if it reaches 25 percent,” ECLAC Executive Secretary Alicia Barcena said.
One of the key challenges for the region, however, is capital flow controls, the report said.
Mario Cimoli, ECLAC director of the Production and Business Develop-ment Division, said, “For us it’s a worry because productive structures in countries like Brazil have to be complexly productive, diversified.”
Last year, the region’s FDI inflows were 40 percent higher than in 2009, representing 112.634 billion dollars, while outgoing FDI almost quadrupled in the same period to reach a historic high of 43.108 billion dollars, which highlights the buoyancy of transnational Latin American and Caribbean enterprises, known as trans-Latins.
According to the report Foreign Direct Investment in Latin America and the Caribbean 2010, the region’s main recipient was Brazil, where FDI inflows posted a record surge of 87 percent, going from 25.949 billion dollars in 2009 to 48.462 billion dollars in 2010.
The second main recipient was Mexico (17.726 billion dollars), followed by Chile (15.095 billion dollars), Peru (7.328 billion dollars), Colombia (6.760 billion dollars) and Argentina (6.193 billion dollars). In Central America, foreign investment flows to all countries grew, except in the case of El Salvador (-79 percent). In the Caribbean, inflows fell 18 percent.
Mexico was the country that invested the most abroad in 2010 (12.694 billion dollars). This was followed by Brazil (11.5 billion dollars), Chile (8.744 billion dollars) and Colombia (6.504 billion dollars).
The factors that resulted in the increased FDI receipts in 2010 include the improved performance of developed economies and the buoyancy of certain emerging economies that boosted some sectors thanks to increased demand.
