Argentina and Venezuela last year saw their foreign direct investment (FDI) flows plummet, reports UNCTAD, in its latest online investment profiles on five Latin American countries. The largest drop was in Argentina, where flows fell 64%, from $2.2 billion in 2001 to $0.8 billion in 2002. Inflows into Venezuela shrunk by 60%, to $1.3 billion. UNCTAD cites political and financial instability as a major driving factor behind the downturn.
Costa Rica´s inflows, by contrast, soared by 46% to a record $0.6 billion, bucking the region´s generally declining foreign investment last year. Inflows to Chile were back to their 1993 levels ($1.6 billion), while Ecuador, which had enjoyed a sharp rise in flows over the past decade, peaking at $1.3 billion in 2001, reported a slight downturn in 2002. Intra-company loans are the major form of FDI in Ecuador and Venezuela; reinvested earnings prevail in Costa Rica and Chile.
Transnational corporations (TNCs) from the US continue to be the main source of FDI to these five countries, followed by Spain and Canada. In Costa Rica, the Netherlands came in a close second to the US, due to a single investment by Philips Electronics in 2002. Industry patterns of FDI also diverge, with export-oriented manufacturing FDI being the largest source of foreign direct investment in Costa Rica, while petroleum and oil refining predominate in Ecuador and Venezuela, and services in Argentina and Chile.
Some Latin American countries have become increasingly important outward investors, UNCTAD says: TNCs from Ecuador, for example, have begun establishing affiliates in such neighbouring countries as Colombia and the United States.
National investment profiles are being published online as they become available, based on each country´s reporting schedules. The profiles, which are part of UNCTAD´s World Investment Directory, provide quick electronic access to the latest statistics on FDI and the operations of TNCs. They include statistical definitions and sources, a listing of relevant national laws and regulations, information on bilateral and multilateral agreements and a bibliography.
