Foreign Direct Investment in Latin America and the Caribbean

Due to the global crisis, in 2009 FDI flows to the region shrunk by 42% with regard to the historical record of in 2008. This decrease is explained by a combination of factors: a fall in world production, prevailing uncertainty and the deceleration of growth in several countries of the region, which discouraged FDI in search of local markets. In addition, falling commodity prices in late 2008 warded off investment in the exploitation of these resources, while the recession in North America restrained investment in export platforms. The report notes that most announced FDI in manufacturing continues concentrated in low and medium to low technology intensive activities, while FDI in high to tech sectors and research and development projects is still scarce. This reveals that two decades after FDI flows were liberalized, the region still has difficulties attracting high to technology investment and participating in high value-added links in global production chains. The report suggests policies for productive development.