FDI in Latin America and the Caribbean: Trends and Strategies
Latin America and the Caribbean experience a decline in foreign direct investment
In 2023, Latin America and the Caribbean recorded a second consecutive year of decline in foreign direct investment (FDI) flow, receiving US$184.304 billion last year, according to a new report by the Economic Commissioner for Latin America and the Caribbean (ECLAC).
Mixed trends in FDI
The report highlights mixed trends in FDI, with Central America and the Caribbean experiencing an increase in investments, while Latin America and South America recorded a decline.
Sector-wise analysis
FDI inflows in services, manufacturing, and natural resources grew in 2023, with services receiving the majority of investments (46%).
Country-wise analysis
In Central America, Costa Rica and Honduras recorded significant growth in FDI, while in the Caribbean, Guyana and the Dominican Republic saw increased inflows.
Impact of FDI on economies
ECLAC emphasizes the positive impact of FDI on regional economies and proposes guidelines for formulating and strengthening policies to attract investment and build territorial strategies integrated into productive development policies.
Guidelines for attracting FDI
The report provides 17 guidelines for attracting FDI, including the need to strengthen technical, operational, political, and prospective capabilities in the area of investment promotion, as well as the importance of involving actors from the public and private sectors, academia, and civil society in constructing and implementing FDI strategies.
Driving sectors for sustainability
ECLAC has identified at least 14 driving sectors in industry, services, and areas related to the Big Push for Sustainability, including the pharmaceutical and life-sciences industry, the medical devices industry, the exportation of ICT-enabled modern services, the care society, e-government, and sustainable water management.
Conclusion
In conclusion, FDI in Latin America and the Caribbean continues to be a significant contributor to the region’s economies, despite decline in recent years. ECLAC’s guidelines for attracting FDI aim to promote sustainable and inclusive growth, and the region’s participation in global FDI flows remains a critical factor in its development.
Frequently Asked Questions
Q: What was the flow of FDI in Latin America and the Caribbean in 2023?
A: Latin America and the Caribbean received US$184.304 billion in FDI in 2023.
Q: How does FDI impact regional economies?
A: ECLAC emphasizes the positive impact of FDI on regional economies and proposes guidelines for formulating and strengthening policies to attract investment and build territorial strategies integrated into productive development policies.
Q: What sectors saw an increase in FDI in 2023?
A: Services, manufacturing, and natural resources saw an increase in FDI in 2023, with services receiving the majority of investments.