Friday, July 06, 2018

Foreign Direct Investment in Latin America

The Economic Commission for Latin America and the Caribbean just released a report on FDI in Latin America, which has fallen for the third straight year. Some quick thoughts:

1. Same old story. It dropped because global prices for commodities dropped. And this is why Chile's decrease was so sharp ($12.3 billion to $6.4 billion).

2. European countries account for 65% of investment in renewable energy. The U.S. has no excuses for not being higher in such a key industry.

3. Data isn't even collected for Venezuela anymore.

4. Central America and the Caribbean did not drop. That highlights a problem the United States has as well. At the macro level, you can see good signs. But the investment and growth is not translating into higher wages and more secure jobs.

5. China appears here and there (especially in Ecuador) but it is not a major player in FDI at this point. The field is dominated by the U.S. and Europe.


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