MercoPress, en Español

Montevideo, September 26th 2023 - 01:29 UTC



FDI in several Latam countries during 2011 marked a historic record

Thursday, May 3rd 2012 - 23:23 UTC
Full article 6 comments
ECLAC Executive Secretary Alicia Bárcena: watch out for the growing repatriation of profits by trans-national corporations ECLAC Executive Secretary Alicia Bárcena: watch out for the growing repatriation of profits by trans-national corporations

Foreign Direct Investment, FDI, in Latin America and the Caribbean during 2011 reached 153.448 billion dollars, which represents 10% of the global total flows according to a report presented on Thursday by the Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile.

This is about the largest amount of FDI received by the region so far, as stated in the report entitled Foreign Direct Investment in Latin America and the Caribbean 2011. In 2010, the region received 120.880 billion dollars, whereas in 2009, due to global recession, inflows decreased to 81.589 billion. Until then, the highest record had been registered in 2008, when investments amounted to 137.001 billion.

In 2011, the main FDI recipients were Brazil (66.660 billion, representing 43.8% of total inflow to the region); Mexico (19.4 billion); Chile (17.3bn); Colombia (13.24bn); Peru (7.66bn); Argentina (7.24bn); Venezuela (5.3bn) and Uruguay (2.53bn). For Brazil, Chile, Colombia, Peru and Uruguay it was a historic record.

In Central America FDI increased by 36% compared to 2010, where the amounts received by Panama (2.8bn), Costa Rica (2.1bn) and Honduras (1.01bn) stand out. In the Caribbean, inflows soared by 20% compared to the previous year, with the Dominican Republic at the head with 2.371 billion.

“In spite of the prevailing uncertainty in global financial markets, Latin American and Caribbean economies attracted significant FDI in 2011. These volumes should remain high in 2012,” said ECLAC Executive Secretary Alicia Bárcena.

In 2011, 46% of net income from FDI was due to profit re-investments, whilst the remaining percentage was due to capital contributions and loans among companies. ECLAC points out this underlines trans-national corporations confidence in the region and business opportunities.

According to the report the good performance which took off in 2012 is the result of increased assets accumulated by trans-national corporations in the region and a surge in profits because of the good economic prospects of the region and high international prices for raw materials.

However Eclac points out to a current phenomenon that is increasingly relevant since 2004: the growing repatriation of profits by trans-national corporations investing in the region, a fact that reminds that FDI is not a one way flow. “FDI revenue transferred back to the countries of origin has increased from 20 billion dollars per year between 1998 and 2003 to 84 billion from 2008 to 2010 annually” said Bárcena.

The document underlines that FDI strengthens the production basis of Latin America and the Caribbean. In 2011, 57% of FDI in South America (except Brazil) was directed to the natural resources sector, 36% to services and 7% to manufacturing.

At the other end, 7.8% of FDI received by Mexico, Central America and the Caribbean were oriented to natural resources, 39.7% to manufacturing and 52.5% to services. Meanwhile, 46.4% of FDI in Brazil was for manufacturing, 44.3% services and 9.2% to natural resources.

Investments made by Latin American and Caribbean trans-national corporations -also known as trans-Latins- decreased to 22.6bn in 2011, having reached 44.924bn in 2010. In spite of the decrease, ECLAC underlined that these corporations are still in an expansion phase.

According to ECLAC the downsizing can be mainly explained by Brazil where net borrowings granted by subsidiaries abroad to parent companies increased, whereas capital contributions were cut down, a fact that suggests that Brazilian companies are investing more in their own country.

Chile was the country that invested the most abroad in 2011 (11.82bn), followed by Mexico (9.6bn) and Colombia (8.23bn).

The report also shows that the European Union, as a bloc, is the largest investor in the region. In the last decade, the EU invested an average of 30 billion dollars per year in the region, representing 40% of the total received. EU investments concentrated in South America, are very diverse but strongly relevant to strategic sectors such as electricity and banking.

The 2011 investments’ ranking has the United States leading with 18%; Spain 14%; the Latam and Caribbean region 9% and Japan 8%, among others.

Finally ECLAC estimates that in 2012, FDI flows to Latin America and the Caribbean will maintain high levels. But it warns that if the Euro zone crisis worsens, the flow of investments, especially from Europe- could be reversed.

Top Comments

Disclaimer & comment rules
  • DanyBerger

    Where is FI on this chart?

    Having the best stable economy in the world, the higher income among developed countries, the strongest currency in the west, etc, etc, etc.


    May 04th, 2012 - 05:14 am 0
  • Max

    But there have not same liquidities at [Mexico & Central America ] and [ South America ] ECLAC should has more comprehensive outlooks.

    May 04th, 2012 - 10:09 am 0
  • Chicureo


    Animals being 'hauled on board trawlers after becoming trapped in nets in Falklands Islands waters' -Wildlife experts believe fisherman are slicing fillets before throwing bodies back into the sea
    By: AFP
    PUBLISHED: 4 May 2012 |

    Callous Argentine fishermen are eating steaks carved from dolphins which have been illegally caught in the South Atlantic Channel, conservationists claim.
    Experts believe the animals are being hauled on board trawlers after becoming trapped in nets off the Falklands Islands waters.
    Fillets of flesh are then sliced off to be eaten before the bodies of the highly intelligent mammals are callously tossed back into the water.

    Threat: Common dolphins seen off the Falklands coats. Wildlife experts have accused Argentine fisherman of eating the animals
    Since the beginning of January, Falklands Wildlife Trust's Marine Strandings Network has examined and recorded 50 dead dolphins and porpoises. Just under half, 23, showed distinct signs of having died in fishing gear.

    A common dolphin, examined on the beach at in early April, one of five discovered in the same week, showed scars typical of a large trawler net from which it presumably tried to escape. A spokesman for South Atlantic Wildlife Trust said: 'A large fillet of flesh had been removed from the back - presumably for eating. 'This is a known practice on Argentine boats and Argentine pair trawlers were working close to the Islands waters at the time. 'The dolphin's tail had been cut off in the course of cutting the animal free from a winch strop which was used to lift it over the side of the boat

    May 04th, 2012 - 02:57 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!