Latin America Trade 2005 - Foreign Invest Up LA

By: | at 07:00 PM | Channel(s): International Trade  

Foreign investment up in Latin America, Caribbean, report saysUnited Nations says Brazil led region in foreign investment in 2004Foreign direct investment in Latin America and the Caribbean increased 44% in 2004, to reach $56.4 billion, the first year that foreign capital has risen in the region since 1999, the United Nations says in a new report.
The report, released March 15 by the UN Economic Commission for Latin America and the Caribbean (ECLAC), said foreign direct investment in South America alone rose 48% to $34.1 billion, while Mexico and the Caribbean Basin had a 43% gain in investments, to $22.3 billion. Foreign direct investment occurs when a company from one country invests some of its assets in a foreign country.
The increase in such investment in the Latin American region represents “welcome news,” said the ECLAC report, as it “may portend the beginning of a new and sustained investment boom.”
The report, entitled “Foreign Investment in Latin America and the Caribbean, 2004,” says the increase is a “very positive” trend, but warns that the challenge remains to capture foreign investment that provides greater benefits to the region. This means, the report said, that Latin American and Caribbean countries have not solved their economic problems with regard to the limited benefits they receive from the presence of transnational corporations within their borders.
Of all the countries in the region, Brazil received the most foreign direct investment in 2004, with investment flows increasing 80%, followed by Chile with a 73% increase.
The report said the increase for Brazil could be a “unique opportunity” for that country “to consolidate a new, higher-quality investment cycle.”
Brazil seems to have recovered its leading role as a receiver of foreign investment from transnational companies, a role that was lost after the wave of macroeconomic instability that the country experienced in 1999 and 2000, the report said. Brazil is one of the economies with the most transnational companies in the world—400 of the companies on the Fortune 500 list still have a presence in the country. The Fortune 500 list, compiled annually by Fortune magazine, is a list of the 500 largest companies in the United States.
Foreign investment in Argentina rose over the 2002 and 2003, but remains at its lowest level in that country in the past 15 years, the ECLAC report said. Trinidad and Tobago, El Salvador, and Colombia also saw foreign investment rise, while Panama and Venezuela experienced a downturn.
The United States remained the region’s largest foreign investor, with 32%of the capital.
(The Washington File is a product of the Bureau of International Information Programs, US Department of State. Web site: http://usinfo.state.gov)

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