MercoPress. South Atlantic News Agency

Foreign investment drops

Foreign investment in Chile during 2002 dropped 33% compared to 2001, from 5,622 billion US dollars to 3,768 billion, according to the country's Foreign Investments Committee vicepresident, Karen Poniachik.

However Ms. Poniachik pointed out that this was a tendency that affected most of the world with the exception of China.

"Global economic uncertainty and lower corporate profit expectations plummeted fusion and acquisition operations together with a considerable reduction in multinational expansion programs", indicated Ms. Poniachik.

Data indicates that 58,2% of all foreign investment in Chile during 2002 went to the mining industry, followed by public utilities (gas, water, electricity) 14,7% and transport and communications 10,1%. As to the countries of origin, 45% of investment funds came from the United Kingdom; 16% from USA; 14,6% Canada and 7,3% Spain.

"Chile is undergoing the same tendency that began in the industrialized countries towards the end of 2001, when foreign investment dropped 60%. However in these countries this is interpreted as a "corrective situation", since it will enable a sustainable, realistic expansion following the 1999-2000 record of global capital movement", indicated Ms. Poniachik.

In Latinamerica the scenario has been particularly negative given the huge losses of some foreign companies in certain countries, but according to Ms. Poniachik, Chile continues as an attractive and reliable partner, "and more and more multinationals are looking into consolidating in Chile as their operational headquarters for the rest of the continent".

Besides, towards the end of 2002 foreign investment in Chile began to vigorously recover with the acquisition of the mining company La Disputada by Anglo-American in 1,13 billion US dollars; Canadians invested 267 million US dollars also in mining and Anglia Waters 189 million US dollars in public utilities.