Latin America and the Caribbean received a record US$173.361 billion of foreign direct investment (FDI) (6.7 per cent more than in 2011), despite an external context characterised by shrinking FDI flows worldwide, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
The figures are attributable to the region’s steady economic growth, high prices for raw materials and the impressive returns on investments related to natural resource exploitation, according to the report Foreign Direct Investment in Latin America and the Caribbean 2012, which was launched at the commission’s headquarters in Santiago, Chile on Tuesday. Guyana earned some US$294 million – a 19 per cent increase from the previous year of US$247 million.
ECLAC predicts that this year’s FDI inflows to the region will range between a fall of three per cent and a rise of seven per cent. According to ECLAC Executive Secretary Alicia BÁrcena, “The foreign direct investment results attest to the good current performance of the Latin American economy. However, we see no clear signs of FDI making a relevant contribution to generating new sectors or creating activities with high technology content as changing the production structure as one of the main challenges facing the region.”
The report describes FDI as increasingly focused on the exploitation of natural resources, particularly in South America. Manufacturing represents a fairly low proportion of inward FDI (except in Brazil and Mexico). In addition, the profits of transnational enterprises operating in Latin America and the Caribbean (also known as FID income) grew fivefold in nine years, rising from US$20.425 billion in 2002 to US$113.067 billion in 2011.