MercoPress. South Atlantic News Agency

Foreign investment in Chile contracted during 2005

Foreign investment in Chile declined drastically last year, amounting to half the 2004 level revealed officials from the Foreign Investment Committee in Santiago.

The contraction is attributed to a relative lack of big mergers as happened in 2004. Foreign investment in 2005 totaled 3.75 billion US dollars compared to nearly 7.15 billion in 2004, a 47.5% decline.

In 2004 foreign investors were behind some big deals in Chile including Spanish power company Endesa, which spent 2.15 billion to restructure its operations and Spain's Telefonica Moviles that acquired Telefonica Moviles de Chile for almost 1.37 billion.

"The main difference between 2004 and 2005 was that last year was marked more by productive investments than by merger and acquisition transactions" highlighted the Committee.

An estimated 51% of total foreign investment, 1.92 billion US dollars, went into productive investment projects, and the rest, approximately 1.83 billion, was classified as capital investment by the Chilean Central Bank.

The largest lumps of 2005 investment in 2005 went to mining, 42.9%; transport and communications 29.6%; services 17.1%; public utilities (electricity, gas and water) 5.1% and manufacturing 4.4%.

The largest sources of foreign investment in Chile in 2005 came from Australia, Mexico, Britain and Spain.