Latin America: Brazil and Mexico lead the fall in foreign investment
Foreign investment in Latin America has seen a significant drop, with Brazil and Mexico the most affected economies
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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