By: Staff Writer
June 21, 2022
The United Nations said Foreign Direct Investment (FDI) in the Latin American and Caribbean (LAC) rose by 56 percent to $134bn, showing signs that the region is moving away from the COVID-19 pandemic economic collapse.
The United Nations Conference on Trade and Development (UNCTAD) said in their latest World Investment Report that FDI in Latin America and the Caribbean rose by 56 percent to $134bn. The report added: “Most economies saw inflows rebound, with only a few experiencing further declines, caused by pandemic-induced economic crises. Total inflows remained about 15 per cent below the pre-pandemic level.”
We are still not back to 2019 levels, but this encouraging signs as we are headed in the right direction. The report also said: “Strong inflows in traditional target industries such as automotive manufacturing, financial and insurance services, and electricity provision, and pushed up by record high investments in information and communication services across the region.
Flows to Colombia grew by 26 percent to $9bn, led by inflows in the manufacturing sector and in transport, logistics and communication services, the report said.
The report also said that: “Inflows to the 10 Caribbean SIDS rose by 4 percent to $1.7bn, after dropping 27 percent in 2020. In the Bahamas, inflows decreased by 60 percent to $360m. However, there was a rise in announced greenfield projects and international project finance deals. CGrowth Capital (United States) sponsored the construction of a refinery in the Bahamas for $262m. Flows to Trinidad and Tobago turned positive (to $342 million from -$103 in 2020); Digicel (Jamaica) plans to invest $137 million in telecommunication.”
A greenfield project is one that lacks constraints imposed by prior work on the site. Typically, what a greenfield project entails is development on a completely vacant site. Architects start completely from scratch.
The report continued, “In the Caribbean, FDI increased by 39 percent to $3.8bn, mainly driven by growth in inflows to the Dominican Republic, to $3.1bn. Flows increased in mining, financial services and special economic zones.
“In Central America, FDI reached $42bn. Flows to Mexico, the second largest recipient in the subregion, increased by only 13 percent to $32bn, with new equity investments in the mining and extractive industries as well as in automotive.