News Column

Foreign Investment in Latin America Reached Record High in 2012

May 15, 2013
Foreign Investment

Annual foreign direct investment in Latin America grew by 6.7 percent to total $173 billion in 2012, a record high, the UN's Economic Commission for Latin America and the Caribbean (ECLAC).

Brazil attracted $65 billion to consolidate its position as the favourite destination for foreign capital in the region. Chile attracted $30 billion and $16 billion went to Colombia.

Mexico, which is highly dependent on the United States, got just $12.6 billion, 35 percent less than it got in 2011. Peru and Argentina were also at that level.

"It was a record year even though the world is slowing down," said ECLAC's Executive Secretary Alicia Barcena.

The historic influx of foreign direct investment - at a time when this indicator has fallen globally by 13 per cent - rested largely on the increase in capitalizations of Latin American companies.

Barcena noted that investment continues to focus on commodities, and she said that 55 per cent of the yields of that investment are sent back to their countries of origin.

"We have to evaluate how we can increase reinvestment," she said.

The yields of foreign direct investment in Latin America grew from $20 billion in 2002 to $113 billion in 2011, ECLAC said, and according to Barcena they are expected to remain high in the coming years.

Foreign direct investment in Latin America, which has trebled since 2009, amounted to 3 percent of the region's GDP, although it topped 6 percent in countries like Chile, Panama and Peru.

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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