Losing the Foreign Investment Race
Inflows of foreign direct investment in Latin America remain below their peak 10 years ago, and the region's share of global FDI has fallen by half. Reversing this trend requires not only the right legal and regulatory framework, but also effective FDI promotion efforts, which have so far been almost entirely neglected.
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Latin America is in serious trouble when it comes to foreign direct investment (FDI). True, inward FDI reached about $70 billion in 2006, but this is below the 1998-1999 peak, and a large share came from Latin American firms investing in neighboring countries, whereas inflows from Europe and the United States have fallen. Many companies are withdrawing from the region, and large investments from China, particularly in Brazil, though promised, have failed to materialize.