MercoPress. South Atlantic News Agency

Record foreign direct investment for Latinamerica in 2007

Foreign direct investment in Latinamerica reached 106 billion US dollars in 2007, overtaking the record 89 billion of 1999, according to the latest release from the United Nations Latin American Commission, CEPAL.

While in the nineties investment was triggered by a wave of privatizations this time the boom in the region seems sounder and has been fueled by strong domestic markets and a spiraling international demand for the region's natural resources. "The increase has been pushed mainly by the determination of international corporations to take advantage of the demand growth in domestic markets both for goods and services, and by corporations looking to ensure a supply of natural resources in the framework of very favorable and dynamic global conditions", indicates the report. The countries which were more investment active during 2007 in Latinamerica were United States, Holland and Spain. Leading recipients in the region began with Brazil, 34.58 billion US dollars; Mexico, 23.2 billion; Chile, 14.46 billion and Colombia, 9 billion US dollars. However the report also indicates that the performance of foreign investment in 2007 was not significantly affected by the slowdown of the US economy, since this only became evident in the last quarter of 2007. Nevertheless "its effects could be relevant for investment in the region during 2008", warns Cepal. The 2007 record follows an impressive 46% hike between 2006 and 2007. Countries which experienced investment loss in the region during 2007 include Dominican Republic, Uruguay, Ecuador and Bolivia. Uruguay's drop (520 million US dollars) is attributed to the end of civil work engineering for the 1.2 billion Botnia pulp mill. Most of the investment took place in 2006. The CEPAL report also shows that the services sector attracted most of the direct investment to the region, particularly in Brazil while for Chile, Colombia and Ecuador most of foreign investment was in natural resources, and in manufacturing for Mexico. Contrary to 2006, investment leaving Latin America and the Caribbean for other regions in 2007 dropped to 20.6 billion US dollars after having reached 42 billion US dollars in 2006.