Further evidence of the devastating socio economic impact which Covid-19 has had on Latin America and the Caribbean has been uncovered in research done by the Economic Commission for Latin America and the Caribbean (ECLAC).
The research points to the region’s foreign direct investments having shrunk by just over a third last year compared with investment levels in 2019, a circumstance that is being blamed on investors largely avoiding the region on account of the uncertainties arising out of the Covid-19 pandemic.
Foreign Direct Investment (FDI) investments to the region last year reportedly reached US$105.48 billion, 34.7 percent less than in 2019, ECLAC said. The 2021 Foreign Direct Investment in Latin America and the Caribbean Report said that these figures represent the lowest for the region since 2010.
The LAC region has been experiencing lower flows of FDI since 2013, which has spotlighted the relationship between FDI flows and commodity price cycles, mainly in South America, according to the report. It said that last year FDI increased in five of the region’s countries, namely the Bahamas, Barbados, Ecuador, Paraguay, and Mexico.
Investments in the natural resources and manufacturing sectors declined the most in 2020. ECLAC said that while the region experienced a rebound in FDI projects between September 2020 and February 2021, announcements about new projects declined up to May 2021, making it difficult to keep projections that FDI inflows into the region could increase by more than five percent.
