September 19, 2021

Sagebrush Rider

Complete News World

Foreign investment in Latin America goes back 10 years

Amid the severe health, economic and social crisis caused by the Govit-19 epidemic, Latin America received only about $ 105,480 million in foreign direct investment (FDI), the lowest level since 2010.

By 2020, the region had less than $ 56 billion in FDI, shrinking by 34.7 percent compared to 2019, a negative 10-year record, 51 percent lower than the negative historical highs reached in 2012 by the Economic Commission for Latin America and the Caribbean (ECLAC).

Since the second half of 2010, investment credits have stagnated, weakening companies’ interest in establishing new capabilities or expanding their presence in the region.

The truth is that Latin America needs a greater contribution of foreign capital, which will allow it to move towards a sustainable recovery and foreign investment could play a positive role in this challenge, hitting the regional economies hard after a year, with GDP falling to an estimated 6.8 percent.

But it seems difficult to create foreign direct investment as a factor in the transition to recovery in an area with severe health crises in recent years, severe impacts on services and a stagnant or declining manufacturing industry. Latin America and the Caribbean in 2021.

The worst investments, for example, were in natural resources with a contraction of 47.9 percent compared to 2019, followed by a 37.8 percent decline and finally the service sector with an 11 percent decline.

Interesting fact is that during this period, the United States increased its direct investment from 27 to 37 percent, while Europe fell from 51 percent to 38 percent. Companies

By countries, foreign direct investment was the most favorable in 2020, with the Bahamas, Barbados, Ecuador, Paraguay and Mexico, the second largest recipient in the region after Brazil, falling by 35.4 percent.

See also  Who are they and how do they execute Haqqani?

In another line, the ECLAC text, in economic relations with China, should develop policies to ensure investment from the contributing Asian company: building productivity in host countries, building links with local suppliers, creating employment and promoting sustainable growth.

Similarly, ECLAC considers investment strategies in the digital sector to have three dimensions: connected, digital and digital economies.

Although FDI can contribute to digital transformation in Latin America, digitalization will deepen existing gaps and create greater exclusion and distribution inequality if the structural characteristics of economies are not taken into account.

For ECLAC, improving regional sustainability should go to eight strategic areas, the transition to renewable energy; Sustainable electricity in cities; Inclusive digital revolution; Healthcare manufacturing industry; Bioeconomics; Care and circular economies; As well as regular tourism.