Friday, May 04, 2012

FDI in Latin America

The Economic Commission for Latin America and the Caribbean just released its report on foreign direct investment in Latin America, which reached a record high of $153 billion in 2011. Given the growing conventional wisdom about the rise of China and the decline of the United States, I was curious to see if that was reflected in FDI. The answer: not exactly.

U.S. companies comprised 18% of FDI in 2011, down from 23% in the 2006-2010 period. But can you guess what country had the highest total in 2011? The Netherlands. The report notes the obvious point that these are companies based elsewhere. But where?

Meanwhile, China represents just 1% of FDI in the region. More important is Spain, which went from 9% to 14%, and Japan, from 3% to 8%.

So the U.S. has been playing a smaller relative role, but not because of China. Why don't we ever hear the media talk about Japan? And why don't we ever hear about strange goings-on in the Netherlands?


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