Brazil and Mexico lead the recent decline in Foreign Direct Investment (FDI). The scenario poses challenges that target key sectors such as economic development and modernization of the region.

FDI is, definitely, crucial for the sustainable development of Latin America and the Caribbean. In addition, it contributes to the promotion of “technology transfer, infrastructure improvement and job creation, to ensure that the benefits are distributed fairly and contribute to progress and change in the region.”

Brazil and Mexico are positioned as the greatest powers in Latin America. “Their size, economy and political weight put them one step ahead.” Added to them are Argentina and Colombia, with high economic potential and diversity, respectively. Chile has made significant progress; Venezuela, despite the current political crisis, retains extensive oil reserves.

In this context, Brazil and Mexico stand out, due to their size and dynamism. Consequently, they directly feel the impact of the decline in foreign investment, which, as already seen, “in specific areas and sectors can exacerbate regional inequality, creating pockets of prosperity while other areas remain underdeveloped. This underlines the importance of a more equitable distribution of investment to encourage more uniform development.”

FDI is an undeniable engine of change and progress in Latin America and the Caribbean. If foreign companies are investing less money in the region, financing and job creation are reduced; the transfer of technology and knowledge, as well as the arrival of new technologies to developing economies, considered high risk.

The countries of Latin America and the Caribbean are faced with the challenge of re-boosting FDI, for which attractive policies that involve the private sector and civil society will be necessary, with the aim of generating “lasting benefits for local communities and contributing to build a more prosperous and sustainable future for all.”

M.Pino

Source: cointelegraph

(Reference image source: Unsplash+, in collaboration with Getty Images)

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In the period from January to November last year, Brazil experienced a 36% decrease in Foreign Direct Investment (FDI), reaching 52.716 million dollars, according to data from the Central Bank. Equity holdings fell by 22.8%, while lending operations between parent companies and subsidiaries plummeted by 85.6% compared to the same period in 2022.

Despite these figures, foreign direct investment in November showed a rebound of 2.6% compared to the same month of the previous year, reaching 7.78 billion dollars, according to the issuing body.

In the last 12 months to November 2023, FDI totalled $57.7 billion, representing 2.68% of Gross Domestic Product (GDP), down from 4.01% in the immediately preceding period.

The country ‘ s international reserves increased by $8.2 billion from October 2023 to $348.4 billion for that month.

Despite economic growth of 3% in 2023, according to financial market forecasts, a sharp slowdown is expected in 2024, with GDP expansion limited to 1.5%.

K. Tovar

Source: Bancaynegocios

(Reference image source: @MundoEConflicto, X)

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