By: Staff Writer
July 26, 2024
The United Nations Conference on Trade and Development (UNCTAD) World Investment Report, 2024 said foreign direct investment (FDI) in Latin America and the Caribbean (LAC) was stable at $193 billion in 2023.
The report, released earlier in July, also said that FDI “accelerated,” for Guyana out of the Caribbean and Central American countries. “In Central America, Mexico accounted for the bulk of foreign investment, with stable FDI inflows. In the Caribbean, the Dominican Republic continued its growth trend, with inflows rising 7 per cent year on year. M&A sales, which typically account for only a small share of FDI in Latin America and the Caribbean, declined by $4 billion in 2023, to $11 billion,” it said.
Also, the number of projects that had to start from scratch, or “greenfield projects,” declined by 19 percent from 2022 to 2023.
Over the past five years, FDI has expanded across the region’s main economic groupings, with flows to the Caribbean Community (CARICOM) tripling compared to 2018.
In 2022, the CARICOM region recorded USD 1,768,365 in foreign direct investment, while in 2023 the total was USD 1,813,150.
Globally, the LAC attracted 19 megaprojects valued at more than $1 billion each in 2023, with 17 undertaken by investors outside the region. This helped bolster the rise in Caribbean FDI in 2023.
The report also said: “The LAC is the only region where the value of outstanding social, sustainability and sustainability linked bonds is higher than that of green bonds; they account for more than 90 per cent of total cumulative issuance, according to the Climate Bonds Initiative. Despite social bond issuance there being on a par with that in Europe and in Asia, the region could be missing out on considerable financing opportunities in the green bond segment, especially in sectors such as energy, transport and industry.”
The report added: “FDI flows to developing countries fell by 7 per cent to $867 billion, mainly due to an 8 per cent decrease in developing Asia. Flows fell by 3 per cent in Africa and by 1 per cent in Latin America and the Caribbean. The number of international project finance deals fell by a quarter. Greenfield project announcements in developing countries increased by more than 1,000, but these projects were highly concentrated; South-East Asia accounted for almost half, West Asia for a quarter and Africa registered a small increase, while Latin America and the Caribbean attracted fewer projects.