Foreign Direct Investment in Latin America and the Caribbean 2017
This publication sets out and analyses the main foreign direct investment (FDI) trends in the countries of Latin America and the Caribbean. The 2017 edition shows that the region is at a difficult juncture. FDI inflows declined by 7.9% in 2016, to US$ 167.043 billion, representing a cumulative fall of 17.0% since the peak in 2011. The fall in commodity prices continues to affect investments in natural resources, sluggish economic growth in several countries has slowed the flow of market-seeking capital, and the global backdrop of technological sophistication and expansion of the digital economy has concentrated transnational investments in developed economies.
This publication sets out and analyses the main foreign direct investment (FDI) trends in the countries of Latin America and the Caribbean. The 2017 edition shows that the region is at a difficult juncture. FDI inflows declined by 7.9% in 2016, to US$ 167.043 billion, representing a cumulative fall of 17.0% since the peak in 2011. The fall in commodity prices continues to affect investments in natural resources, sluggish economic growth in several countries has slowed the flow of market-seeking capital, and the global backdrop of technological sophistication and expansion of the digital economy has concentrated transnational investments in developed economies.
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34 Chapter I Economic Commission for Lat<strong>in</strong> <strong>America</strong> <strong>and</strong> <strong>the</strong> <strong>Caribbean</strong> (ECLAC)<br />
Figure I.8<br />
Lat<strong>in</strong> <strong>America</strong> <strong>and</strong> <strong>the</strong> <strong>Caribbean</strong>: FDI <strong>in</strong>flows, 1990-2016<br />
(Billions of dollars <strong>and</strong> percentages of GDP)<br />
<strong>Investment</strong> falls <strong>in</strong> natural-resource-related sectors<br />
Economic growth falters<br />
250<br />
10<br />
200<br />
150<br />
1999<br />
4.7%<br />
2011<br />
206 935<br />
2010<br />
168 421<br />
2015<br />
183 144<br />
167 180<br />
-7.8%<br />
9<br />
8<br />
7<br />
6<br />
5<br />
100<br />
3.6%<br />
4<br />
3<br />
50<br />
2009<br />
2.5%<br />
2<br />
1<br />
0<br />
0<br />
1990 1994 1998 2002 2006 2010 2014 2018<br />
FDI <strong>in</strong>flows as a percentage of GDP (right scale)<br />
FDI <strong>in</strong>flows<br />
Source: Economic Commission for Lat<strong>in</strong> <strong>America</strong> <strong>and</strong> <strong>the</strong> <strong>Caribbean</strong> (ECLAC), on <strong>the</strong> basis of official figures <strong>and</strong> estimates as of 15 June <strong>2017</strong>.<br />
Note: FDI figures do not <strong>in</strong>clude flows to <strong>the</strong> ma<strong>in</strong> f<strong>in</strong>ancial centres of <strong>the</strong> <strong>Caribbean</strong>. FDI figures <strong>in</strong>dicate FDI <strong>in</strong>flows, m<strong>in</strong>us dis<strong>in</strong>vestments (repatriation of capital) by<br />
foreign <strong>in</strong>vestors. These figures differ from those used <strong>in</strong> <strong>the</strong> <strong>2017</strong> editions of <strong>the</strong> Economic Survey of Lat<strong>in</strong> <strong>America</strong> <strong>and</strong> <strong>the</strong> <strong>Caribbean</strong> <strong>and</strong> <strong>the</strong> Prelim<strong>in</strong>ary Overview<br />
of <strong>the</strong> Economies of Lat<strong>in</strong> <strong>America</strong> <strong>and</strong> <strong>the</strong> <strong>Caribbean</strong>, because <strong>the</strong>y show <strong>the</strong> net balance of foreign <strong>in</strong>vestment, that is, direct <strong>in</strong>vestment <strong>in</strong> <strong>the</strong> report<strong>in</strong>g economy<br />
(FDI) m<strong>in</strong>us outward FDI. The figure for 2016 does not <strong>in</strong>clude <strong>the</strong> Bolivarian Republic of Venezuela or Tr<strong>in</strong>idad <strong>and</strong> Tobago as no <strong>in</strong>formation was available for those<br />
countries, which were <strong>the</strong>refore excluded from <strong>the</strong> calculation of <strong>the</strong> variations. S<strong>in</strong>ce 2010, figures for Brazil <strong>in</strong>clude re<strong>in</strong>vested earn<strong>in</strong>gs from FDI; as a result,<br />
<strong>the</strong>se figures are not directly comparable with those from before 2010. This is represented by <strong>the</strong> break <strong>in</strong> <strong>the</strong> l<strong>in</strong>es.<br />
At <strong>the</strong> subregional level, FDI <strong>in</strong> South <strong>America</strong> fell by 9.3%, while flows <strong>in</strong>to Central<br />
<strong>America</strong> <strong>and</strong> <strong>the</strong> <strong>Caribbean</strong> rose by 4.9% <strong>and</strong> 3.3%, respectively. With<strong>in</strong> South <strong>America</strong>,<br />
Colombia posted <strong>the</strong> biggest <strong>in</strong>crease <strong>in</strong> <strong>in</strong>flows (15.9%) <strong>and</strong> <strong>in</strong>vestment <strong>in</strong> Brazil climbed<br />
5.7%. The largest decl<strong>in</strong>es <strong>in</strong> FDI were seen <strong>in</strong> Argent<strong>in</strong>a (64.0%), Ecuador (43.7%)<br />
<strong>and</strong> Chile (40.3%). <strong>Investment</strong> <strong>in</strong> Mexico dropped by 7.9%, although it rema<strong>in</strong>ed high<br />
compared with <strong>the</strong> levels seen <strong>in</strong> <strong>the</strong> past decade. Central <strong>America</strong> received a larger<br />
share of FDI, jump<strong>in</strong>g from 3.7% of <strong>the</strong> total <strong>in</strong> 2010 to 7.2% <strong>in</strong> 2016. In this subregion,<br />
<strong>in</strong>vestment <strong>in</strong> Panama was at an all-time high, up 15.9% to US$ 5.209 billion. In <strong>the</strong><br />
<strong>Caribbean</strong>, <strong>in</strong>flows to <strong>the</strong> Dom<strong>in</strong>ican Republic grew by 9.2%, totall<strong>in</strong>g US$ 2.407 billion.
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